Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, November 20, 1993 TAG: 9311200217
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: By DAVID M. POOLE and KAREN BARNES STAFF WRITERS
DATELINE: BEDFORD LENGTH: Long
There is no evidence, however, that Wells misappropriated public funds.
Wells predicted that a special prosecutor assigned to investigate the payroll bank account would clear him of any wrongdoing.
"I welcome the appointment of outside counsel and I will cooperate with his investigation to the fullest extent," Wells said in a written statement.
Wells, the county's top lawman since 1974, refused to answer questions during a brief news conference with his attorney, John Alford, in the Bedford County General District Courtroom.
The sheriff appeared somber, standing with his arms crossed in front of his chest, as Alford gave reporters copies of Wells' bank statements and canceled checks dating back three years.
Wells had refused to release the records until a Lynchburg judge on Wednesday ordered him to comply with a Virginia Freedom of Information Act inquiry by the Roanoke Times & World-News.
In his written statement, Wells said accountants who have examined his department's finances never questioned the bank account that combined public and personal funds.
In fact, Wells said, he set up the bank account in the early 1970s on the advice of the late Harry Scott, who worked for the state auditor of public accounts.
"Harry Scott further told me to process the office payroll through this account, and I was told that when the payroll cleared the account, the remaining funds were mine," Wells said in his statement.
"Harry Scott also approved deposit of my personal funds in this account."
Walter Kucharski, the current auditor of public accounts, said he had no knowledge of any advice Scott may have given Wells.
"Anything's possible, but I can't believe he told him he could write his personal checks out of there," Kucharski said.
A law prohibiting the mixing of public and personal funds in the same account has been on the books since the 1950s. Violation of the law is a misdemeanor.
The law is necessary, Kucharski said, to allow a clear accounting of public money.
Wells freely mixed public and personal funds in the account, according to records released Friday.
Each month, the sheriff deposited a check from Bedford County in amounts that ranged from $130,000 to $183,000 and wrote payroll checks to his employees - who numbered as many as 82. Wells also deposited his own payroll check into the account and paid household bills from it.
The sheriff wrote checks on the account to tithe at his church, pay credit card bills and join various clubs, including the Blue Ridge Chitterling Club of Virginia. In February, Wells also wrote a $1,500 check to Bedford County Commonwealth's Attorney Jim Updike's short-lived campaign for state attorney general.
Copies of several personal checks - $1,169 worth in 1990-91 alone - were missing from records released Friday.
The account had a balance of $30,000 on June 30, 1993.
There is no way to tell from records released Friday how much of the money belongs to Wells and how much was interest that should be returned to Bedford County.
The task will be made more difficult by the fact that the account has earned interest since 1982, Kucharski said.
All interest earned from payroll deposits must be returned to Bedford County, Kucharski said.
Wells, citing an estimate from Bedford Federal Savings Bank, put that amount at $5,626 over 11 years.
An analysis by a certified public accountant hired by the Roanoke Times & World-News suggests that estimate is low.
The "Super Now" account has earned $5,668 since July 1990. The amount of interest earned during the previous seven years was not available.
County funds accounted for the bulk of the interest earned. For example, the account earned interest on an average daily balance of $30,000 in July 1990. Wells' personal balance during that period was less than $5,000, records show.
Wells took several steps to maximize interest earned by the account, such as waiting two weeks to send his employees' monthly contribution of more than $15,000 to the Virginia State Retirement System.
Wells denied earning interest on public money.
He said there were many times during his 19-year tenure, particularly in the early years, when he advanced his own money to pay his department's expenses.
Any interest he might have earned from public money has been more than offset by interest he lost by advancing his personal money to the county, he said.
"On one occasion, I even advanced a citizen, on behalf of the county, funds for unrecovered property, and to this date, I have never been reimbursed," Well said.
Wells stopped writing personal checks on the account in April, shortly after the General Assembly enacted a law limiting the type of bank accounts that sheriffs control.
The law was passed in response to revelations that Bristol Sheriff Marshall Honaker embezzled an estimated $745,000 paid to his department to house inmates from other localities. Honaker killed himself after the scheme came to light in January 1992.
Wells is one of only two sheriffs in Virginia who handle their own payrolls. An audit report released last week recommended that the Sheriff's Department should come under the county's centralized payroll system beginning Jan. 1.
In response to the audit, the Bedford County Board of Supervisors asked for an investigation into the sheriff's account.
Circuit Judge William Sweeney appointed Rockbridge County Commonwealth's Attorney Eric Sisler as special prosecutor. Updike, the Bedford prosecutor, removed himself from the investigation because of his close ties to Wells.
Updike also handles his own payroll, a practice that the county's auditor also has recommended should end.
Wells - who has avoided the press for two weeks and went to court to fight efforts by the newspaper to gain access to his bank records - said he never intended to withhold information from the public.
The sheriff said he only wanted to make sure that he did not release any confidential payroll information to the media.
Wells said his handling of his department's finances would be vindicated by the special prosecutor's investigation.
"Not even my most vocal critics have even suggested that money is missing from this checking account," he said.
"At worst, the criticism is that there is more money in the account than is supposed to be there. I cannot but wonder how many public officials and governmental agencies in today's economic environment are subject to this same criticism."
by CNB