Lucas County Treasurer Ray Kest must repay nearly $17,000 of taxpayers' money he spent for expenses related to his doctoral studies at Cleveland State University, according to an Ohio auditor's report scheduled to be released today.
The audit found that Mr. Kest's expenditures from the "Delinquent Tax and Assessment Collection Fund" in his office were "unallowable" under state law.
Meanwhile, Mark Mulligan, the Ottawa County prosecutor who was appointed as a special prosecutor to investigate allegations of improper spending by Mr. Kest, said yesterday that requiring Mr. Kest to leave office "will be on the table" in addition to repaying the money as part of any deal that may be offered in connection with his criminal investigation.
Mr. Kest is not seeking re-election on the Nov. 2 ballot, but his term does not end until September.
Mr. Mulligan said he has been waiting for the release of the state auditor's report before moving ahead with his year-long investigation.
He said the auditor's findings mirror the findings of an investigation that was conducted for him by the Ohio Bureau of Criminal Identification and Investigation.
"I'm now in a position to move the matter toward a conclusion of the issue," Mr. Mulligan said. "That would be reaching a conclusion that I consider to be just with Kest and his legal counsel and, if that is not possible, I'm presenting the matter to a grand jury."
According to state law, a county's delinquent tax fund "shall be used solely in connection with the collection of delinquent real property, personal property, and manufactured mobile home taxes and assessments."
The audit found that Mr. Kest used $16,886.71 in public dollars from the fund to pay for his PhD studies in economic development at Cleveland State.
The audit, conducted for the state auditor by Ernst & Young, found that Mr. Kest made the following unallowable payments from the fund in 2002 and 2003:
Sheldon Wittenberg, Mr. Kest's attorney, said he would not comment on the auditor's findings until he sees the report.
The Blade began an investigation into Mr. Kest's expenses after the treasurer was arrested for drunken driving Aug. 17, 2003, by the Ohio Highway Patrol while driving his county-owned car on I-475 in Springfield Township. Mr. Kest's county car was taken away by the commissioners, and he later pleaded guilty on Feb. 9 to a reduced charge of reckless operation of motor vehicle.
The newspaper's investigation determined that Mr. Kest had billed taxpayers more than $14,000 for tuition, books, and overnight hotel stays in Cleveland connected with his classes there and his work as a part-time instructor at Cleveland State.
His hotel expenditures were reported as reimbursements for "economic development meetings."
Mr. Kest has repeatedly defended his expenditures by saying the knowledge he gained from his economic development course work might help lower delinquent taxes in the county. He cited a report that he wrote for his classes about the proposed new sports arena as one example of how taxpayers have benefited from his continuing education.
Earlier this month, Mr. Kest made similar comments in radio advertisements - public relations messages normally undertaken by a candidate for office.
After The Blade reports last year, Mr. Kest put $14,683 in Mr. Wittenberg's escrow account to cover the expenditures if they were determined by audit to be unallowable. However, that figure didn't account for the finding by the auditor's office that Mr. Kest's mileage expenditures also must be reimbursed.
When announcing the money had been escrowed last year, Mr. Wittenberg released a statement that said: "Mr. Kest will abide by any decision made by the special prosecutor, Mark Mulligan, or the state auditor's office regarding the expenditure or repayment of these funds."
Yesterday, Jennifer Detwiler, a spokesman for the state auditor's office, said Mr. Kest won't be able to appeal the finding for recovery.
She said the auditor's office tried to contact him before the release of the audit to see if he had additional information that should be considered but couldn't reach him.
Ms. Detwiler said it's now up to Lucas County to collect the money from Mr. Kest. If the county can't collect it, the Ohio attorney general's office would take action to seek the money.
Mr. Mulligan said he'll seek restitution for Lucas County as part of his duties as a special prosecutor.
He was appointed by Lucas County Common Pleas Judge Charles Wittenberg because Lucas County Prosecutor Julia Bates legally represents Mr. Kest and other county officials by state law.
Mr. Kest has argued previously that he shouldn't be singled out for his use of the delinquent tax fund because Mrs. Bates has used it to pay for a county vehicle lease.
The state audit of Lucas County's books makes no finding of recovery against the prosecutor, but says "some of the expenses by the County Treasurer and County Prosecutor may not be defined as meeting the purpose of the [delinquent tax] fund such as tuition, professional dues, certain textbooks, and vehicle lease payments."
Mrs. Bates said that despite the fact she is entitled to a county car for work purposes, she has not driven a county vehicle for more than one year.
The car she formerly used is now used by an investigator in her office and is no longer paid for from the delinquent tax fund.
Professional legal education for lawyers in her office's delinquent tax and foreclosure unit have been paid for from the fund, which Mrs. Bates said is appropriate.
Contact Dale Emch at: firstname.lastname@example.org or 419-724-6061.