The following letter was submitted to the Harrison County Board of Supervisors, Sept. 7, 2004, by Biloxi resident Royce Hignight regarding the Harrison County Development Commission. GCN provides this letter for reader's information.
Hignight is among public and private citizens that have been campaigning for reforms in the county's leading economic development agency. For more information see GCN's Slippery Business Archive. GCN has provided blue hyperlinks to the appropriate information where available. - Ed.
TO: Harrison County Board of Supervisors (BOS) and
All Municipal Office Holders in Harrison County;
FROM: Royce Hignight
DATE: September 7, 2004
SUBJECT: Harrison County Development Commission (HCDC) Audit
The following items are attached for the information of each recipient:
1. Gulf Coast News Article which reflects that an Attorney General’s Opinion, dated August 23, 2004, indicated that the BOS has the authority to have Compliance and Performance Audits done of HCDC;
2. A Times-Picayune news article dated 8/8/04, by Stewart Yerton, titled, “As recruiter, Olivier did not spare expenses-Lobster in Cancun part of the job, he says;”
3. Video of the July 12, 2004 meeting between the BOS and HCDC staffers, Commissioners, and their attorney;
4. Cover pages of the Alexander Van Loon Sloan Levens Favre (AVL) audit report dated 5/13/04. (Attached only for BOS).
5. A Times-Picayune news article, dated 8/11/04, by James Gill, titled, “State buys salesman’s line.”
As a result of numerous questions raised concerning the activities of HCDC, the BOS has sought to exercise some oversight of the HCDC as authorized and mandated by state statute, but the BOS has met with persistent resistance from HCDC even though the HCDC is a creation of the Harrison County Board of Supervisors, and, in fact, is a subordinate county agency. Section 59-9-7, Mississippi Code of 1972, as amended, under which the development commission was set up, states: “Any county in the State of Mississippi bordering on the Mississippi Sound…where the board of supervisors of such county shall find and determine that public necessity and convenience requires the same, as evidenced by a resolution adopted and entered on the official minutes of such board, shall have a port authority to be known… as the development commission of such county.”
As part of the BOS’s oversight obligation of HCDC and after meeting with resistance from HCDC, the BOS asked for and received an Official Attorney General’s Opinion stating the BOS has the legal authority to have Compliance and Performance Audits done as described in item number one. The compliance audit is to determine if HCDC was following rules, regulations, and the law in spending public resources. The performance audit is to determine what was achieved as a result of the expenditures, i.e. were jobs created and how many?
Items two and three above, alone, clearly reveal that HCDC is an organization that severely needs oversight and reform. Item two reveals extravagant wining, dining, and world travel at Harrison County taxpayers’ expense. I have reviewed some of the credit card receipts of such activities that HCDC turned over to Henry “Tut” Kinney, a Pass Christian resident, after being ordered to do so, by a Court, under the Mississippi Open Records Act.
These receipts reflect numerous and regular charges at high dollar restaurants, locally, and all over the country and the world for the former Executive Director, staff, one or more Commissioners, public officials, local business people, and others. These are meals that the average taxpayer only occasionally or even rarely ever has. Other expenses included golfing, movies, bars, cleanup of cars, etc. I do not believe any other government agency would permit or even consider such extravagant expenditures, including Harrison County. After reading item number two and reviewing these receipts, it appears that HCDC has been a big cookie jar, a cookie jar in which the taxpayers put the cookies.
Item number 4 is the cover pages for the last audit done of HCDC. This audit is a financial audit, not a compliance audit. It had some compliance tests, which amounts to a random sampling of some items. The cover pages state, “we performed tests of its compliance with certain provisions of law, regulations, contracts and grants…However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.”
In response to the State Auditors press releases August 13, 2004, in regard to the HCDC investigation, I made the following requests under the Mississippi Open Records Act to Phil Bryant, State Auditor:
"In the August 13, 2004, of the Sun Herald, Mick Bullock, a spokesman for your agency said, regarding the Harrison County Development Commission (HCDC) investigation that had been ongoing for 18 months, “Everything was looked at.” He further added, “the probe involved a range of issues, including travel.”
Please provide me with the following:
1. A list of everything looked at as referred to above by Mr. Bullock.
2. Identify each one of the issues as referred to above in the, “range of issues,” statement referred to by Mr. Bullock.
3. Provide a copy of any and all reports that would show travel and time spent on the above by your investigators, auditors, or any other personnel.
4. Identify what was looked at in the way of travel and provide a copy of any travel regulations that allow such travel.
In the August 13, 2004, issue of the Sun Herald, you (Bryant)are quoted as saying, “We really don’t believe there’s anything further at this point…We concluded our investigation…It’s time to move on.”
Since your office has obviously concluded your investigation of HCDC, I am requesting that you furnish me with a copy of your audit report, investigative report, findings, etc., covering all issues and everything your employees examined. This is in addition to the items requested in a previous letter with the same date."
The only item that Bryant could or would furnish that was responsive to the above request was item number three. Item number three reflected that three different “special agents,” had worked on the Michael J Olivier Harrison County Development Commission case, off and on, from 1/9/03 to 8/11/04. The report shows no auditors as having worked on the investigation.
Bryant furnished no Audit Report, which he is required to furnish by law, if he has it, because an audit is a public record. Bryant stated in his cover letter he had furnished all reports except for investigative reports, which he stated by law, he does not have to furnish. Neither did he furnish a list of everything and the range of issues that his spokesman claimed they looked at. The State Auditor’s words in effect, are misleading, in my opinion, and give HCDC a clean bill of health, at least in the press. However, the Auditor’s words appear to be just empty words with nothing to back them up.
Most of what Bryant furnished concerned the Olivier incentive pay investigation. In my opinion the State Department of Audit was dismally incompetent in this investigation and/or the results politically motivated. (See the Mississippi Open Wound article, authored by me in the archives of GCN for further explanation.)
No one should be under the misconception that because the former Executive Director and a couple of key staffers are leaving or already gone, that a miraculous change has taken place at HCDC. The vast majority of the Commissioners who concurred with, or let these questionable activities occur, almost without question, along with some of their attorneys, are still there.
For example, the enclosed item number five, a Times-Picayune opinion article by James Gill, ridicules the fact that Olivier, as Executive Director of HCDC, was allowed to accept pay from private businesses. Gill stated, “The most comical aspect of Olivier’s double-dipping deal is that it was declared legal by the Mississippi Ethics Commission. Whatever the secret of Mississippi’s recent success in attracting industry, it cannot have anything to do with a superior ethical code.”
When the double-dipping issue (consultant pay) that Gill mentioned above was brought to the attention of the HCDC Commissioners, they responded by giving their approval of the practice to Olivier and some staffers without any reporting requirements. This was in spite of the fact that every elected official, members of state commissions, such as the State Port Commission, and all heads of State Departments, including the head of the Mississippi Development Authority, are required by statute, to publicly report any outside income and who it is from in order to avoid even the appearance of a conflict of interest.
Mississippi is at the bottom of nearly every socio-economic measurement, and it is not a lack of resources or capable and willing workers. I believe this condition continues because of bad government as epitomized by HCDC. A dozen HCDC’s would not change this condition, but would only make it worse. Only good government will get the state off the bottom
Each and every recipient of this article has a duty and obligation to inform yourself concerning HCDC’s activities, and then ask yourself if you are proud of the actions of your respective appointees to the HCDC, and whether someone who has been a part of the problem can help with the solution of the problem. As the elected representatives of your constituents, the responsibility, obligation, and choice of good government and positive economic development or bad government and little or no economic development are yours.