LCUB Audit, Ugly
JANUARY 1, 2003, THROUGH JUNE 30, 2005

For months, rumors have been flying about state auditors digging around at LCUB. Speculation has run the gamut as to what they might be looking for. Well the jig is up and it's pretty ugly. The comptroller's office released the findings of their investigation Monday.  Click Here For Full Audit. (PDF) According to the comptroller office, the investigation was prompted at the request of the district attorney general's office after having received specific allegations and concerns. Much of the investigation involved the merger of Dixie Lee Utilities and LCUB. Many irregularities were found. There is also discussion about the role former State Representative, Doug Gunnels, played in facilitating the merger and profiting afterwards. There were other findings of wrong doing aside from the merger. The audit reports that copies of the findings have also been sent to the Governor Phil Bredesen, the State Attorney General, the District Attorney General, certain state legislators, and various other interested parties. Charges include:

 Indirect conflict of interest
 Advisory committee members not appointed by city council; no approval of compensation
 Ineligible advisory committee member
 Cash payments in lieu of insurance not allowed
 Dubious municipal benefit from 40-year personal service contracts
 Unauthorized payroll payment
 Unauthorized payment from retirement account
 Contractor not licensed as required by state law
 Inadequate written cutoff policy
 Fringe benefit not properly reported for some employees
 Violation of retirement rules

According to sources, now district attorney and former state representative, Russell Johnson, who succeeded Gunnells, says that statute of limitations on "official misconduct" is only two years and because the events occurred in 2000, it is unlikely that any charges will be brought. if a special prosecutor is appointed, Johnson will recuse himself from the investigation because of his close friendship with Gunnels.

Somebody did wrong and should be held accountable. Restitution of all illegal payouts should be made. Further investigations and potential charges are possible.

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