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March 7, 2007

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Did DA abuse finances?


‘Secret’ bank accounts funded ‘off-books’ staff, bonuses and entertainment
A two-month in-vestigation by The Jackson Herald into the Piedmont Judicial Circuit District Attorney’s office has uncovered some questionable financial transactions approved by District Attorney Tim Madison.

Among the key findings of the investigation:

• Madison paid thousands of dollars in DA staff salaries, financial supplements and large bonuses to staff members out of a bank account funded by victims’ assistance fees attached to court fines. The wage payments bypassed the Jackson County payroll system and were done despite an auditor’s warning in 2002 for the practice to stop.

• The DA’s office funded two river rafting trips and an excursion to the Georgia Aquarium for staff; a trip to the International Storytelling Center in Tennessee for Madison and his wife; a trip to San Diego for Madison and his wife; and hundreds of dollars in meals during 2006 from two other bank accounts funded with money generated by property seized in Jackson and Banks drug busts.

• Jackson County financial officials said they were not aware of the DA’s bank accounts. None of the accounts were audited.

• The victims’ assistance account was not an official government bank account. It was set up in Madison’s personal name and that of one of his long-time staffers.

• Madison’s wife, Linn Jones, drew pay from two counties in 2006. She was paid over $43,000 by Jackson County as a full-time 40-hour per week employee and an additional $12,000 by Banks County for reportedly working 20 hours a week in that county at $13 per hour. Together, the two salaries totaled over $55,000 last year, making her one of the highest paid non-lawyers in the DA’s office. Jones has worked in the Jackson County DA’s office for the past two years.

• All three bank accounts were closed on Jan. 10, 2007, just days after this newspaper’s investigation began. Some $36,000 was turned over to the Jackson County finance department out of the victims’ assistance account on that date. At the start of 2005, the account had a balance of over $100,000.

• Some of the funds from the bank accounts appear to have been used to pay expenses and wages for staffers in the Barrow County DA’s office despite the fact that the money came from Jackson County courts.

• According to state law, the grand jury is supposed to “inspect and examine” the DA’s office at least every three years. A check of Jackson County Grand Jury minutes reveals no such examination of the Jackson County DA’s office during the past five years.

The newspaper investigation began after a Herald reporter received a tip in December containing specific allegations about the district attorney’s financial dealings. The allegations came at a time when questions were being raised about some bank accounts in the Jefferson Police Department amid a GBI investigation into that agency.
Subsequent open records requests made by this newspaper to the district attorney’s office and county government, along with discussions with a number of officials, uncovered the three “secret” bank account transactions.

In a written response to questions about the bank accounts, chief assistant district attorney Allison Mauldin wrote this week that Jackson County finance director John Hulsey knew about the victims’ services account and that 1099 forms were issued to employees who received payment from the account.
“We were not informed by the county that it was to be done any differently,” stated the written response.
But both Hulsey and the paper records say otherwise.
In 2002, Jackson County auditors discovered, by accident, that the DA’s office had been paying a salary supplement to an employee in 2001 from victims’ services funds and had not been reporting that on the employee’s W-2 form or withholding taxes.
Jackson County auditors subsequently issued two audit “findings” regarding the DA’s victims’ assistance funds:
First, auditors said the salary supplement violated both state and federal law and recommended that all DA salaries go through the county’s payroll system.
Second, the auditor recommended that all victims’ assistance funds be turned over to the county finance department for proper tracking.
Madison agreed in 2002 with the findings and said he would change his system.
“I will contact (county finance director) John Hulsey and arrange for the D.A. victim assistance account to be set up and managed through John,” Madison said in a handwritten note to Jackson County auditors in June 2002.
Madison did subsequently give county finance officials $5,500 he had received from the Jackson County Clerk of Courts during 2001. But he did not turn over the funds he received, and continued to receive, from municipal courts in the county. He kept those funds in an account he had set up at Community Bank & Trust. The account was established in his personal name and that of a long-time employee, Diane Hale. Both Madison and Hale signed the checks that were drawn from the account.
Hulsey said this week that he was unaware of the secret DA bank accounts and that they had not been subject to county audits.
“I want to reassure the public that all funds passed through the Jackson County Board of Commissioners are subject to an annual audit,” he said. “The district attorney’s office is an independent state office separate from the BOC. Since this matter is subject to public inquiry, I have no further comment at this time.”
At about the same time Madison set up this account, local city law enforcement agencies began aggressive road patrols. Several city courts boomed with fine income and the DA’s office began getting five percent of the fines tagged for “victims’ assistance.”
The DA’s office got the fine surcharge from Jefferson, Arcade, Commerce, Pendergrass and Maysville city courts. From 2001-2006, over $140,000 from these municipal courts flowed into the DA’s bank account. In 2003 alone, $71,100 went into the account from the surcharge.
As the money flowed in, the DA’s office began paying some staff members directly from the account without putting those staffers on the county payroll. At least one employee was given pay supplements from the account.
In addition, several other key staff members who are not directly involved in victim services, including assistant district attorneys, were paid bonuses from the account. One large bonus was for $7,000 paid to assistant district attorney Nick Primm in June 2005.
In response to questions about the bonuses, the DA’s office said they were given because county budgets “do not allow for overtime compensation. This money was used for employees who put in a significant amount of overtime working on crimes against persons cases. It averaged about $4 per hour.”
The account was closed on Jan. 10, 2007 “to turn over the management of victims’ assistance expenses to the county,” said the DA’s office. Several people received prepayments when the account was closed.
In addition to the victims’ assistance account, the district attorney’s office also received 10 percent of the funds from confiscated property involved in drug busts by local law enforcement agencies.
When property was seized and sold, the DA’s office would receive checks from the law enforcement agency for 10 percent of the proceeds. Those funds were then put into an account at Wachovia Bank in a standard government interest bearing account. The name on the account was “Jackson County funds from Jackson and Banks Counties were then put into separate accounts at Wachovia Bank. (Barrow County funds were located in a People’s Bank account in Winder, but that account showed few transactions in 2006.)
During 2006, these forfeiture funds from Jackson and Banks Counties were used for a variety of purposes, many related to the entertainment and travel of DA staffers.
Madison said some of the events paid for by the funds were “team building staff development programs.” He said the purpose of the programs was to “alleviate employee burnout, encourage teamwork, communication and cooperation (and) prevent employees turnover.”
Madison said that his staff “performs under a heavy workload” and that his assistant district attorneys work 500-600 hours per year “above their salaried compensation.”
In 2006, two team-building river rafting trips were paid for with forfeiture account funds, one to the Ocoee River in Tennessee in August for 16 staff members that cost around $1,093, including some meals; and one to the Chattooga River in South Carolina for 15 staffers in September that cost around $1,029.
The forfeiture funds also paid for 38 DA office staffers to visit the Georgia Aquarium in November at a cost of $1,113.
Money from the accounts also went for meals, with Outback Steakhouse in Commerce being a popular location. Madison said his office has “provided restaurant meal vouchers to attempt to reimburse these employees for out-of-pocket meals during these overage meals.”
It is not clear in the bank statements which staff members paid for food out of the two Wachovia accounts.
The forfeiture funds also paid $480 for registration for the annual International Storytelling Festival in Jonesborough, Tenn., which was held in October. Madison and his wife, Linn Jones, attended the event “to improve trial techniques through the use of story telling and for use in the domestic violence program given to fourth-graders each year,” said the DA’s office about the event. “Tim Madison does circuit-wide training for all the assistant district attorneys and investigators.”
Money from the two forfeiture accounts also purchased airfare tickets for $249 each and paid for hotel and a rental car in San Diego, Calif. in August 2006. Madison and his wife attended a national conference in early August in San Diego. The California trip cost around $3,000, including $521 paid from the Jackson County forfeiture account for a rental car after the conference had ended.
A part of the forfeiture funds, $6,400, was put with money from Barrow and Banks counties to purchase a new 2007 Crown Victoria on Dec. 21, 2006. The car is a “pool” car currently driven by assistant district attorney Brad Smith who works in Barrow County, but also reportedly tries cases in Jackson County.
Also on Dec. 21, 2006, $637 was spent at Best Buy in Athens. That night, the DA’s office had a $200 tab at Outback Restaurant in Commerce. The next night, a $111 meal was had at Outback in Commerce, paid for out of the Banks County forfeiture funds.
Both Wachovia accounts were closed on Jan. 10, 2007, along with the CB&T account.

The DA’s office said this week Madison’s wife, Linn Jones, was paid by both Jackson and Banks Counties in 2006 because she worked 20 hours per week in Banks County to start a pre-trial diversion program, in addition to working her full-time Jackson County position as Victim Assistance Director and training coordinator. Two other staff members took over the Banks County program in December, the statement said.

The statement from the DA’s office also said that Jackson County Grand Juries had been told about its responsibility of examining the DA’s office every three years.
“Each grand jury is informed of their responsibilities under O.C.G.A. Sec. 15-12-71 to inspect and examine the offices of the District Attorney,” said the statement.
Why Jackson County grand juries have not done that over the last five years is unclear.

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