February 1, 2006 - Editor's note: This is the third story in a five-part series examining the spending habits of Marana public officials. The EXPLORER reviewed records of the town's travel and training expenses for the last five fiscal years. The newspaper also reviewed bank statements and receipts to see how Marana officials are using their town-issued credit cards to spend taxpayer dollars.
With a convenient swipe of their Stockmen's Bank MasterCards, Marana public officials have charged close to $200,000 on their town-issued credit cards in the last two and a half years.
They've used their plastic purchasing power to pay for just about everything from expensive dinners and luxury hotel stays to tuxedo rentals and gifts such as flowers and fruit baskets for other government officials.
Each of the town's seven council members and 18 department heads have town-issued credit cards, allowing them to conveniently spend taxpayer dollars at their discretion. Charges to their accounts must receive approval from the finance department, though it appears Marana's policies allow some town officials to use their credit cards fairly liberally.
Airport Director Charlie Mangum recently charged $221.57 to his account to have a DirecTV "Total Choice" package with 155 digital-quality television channels hooked up to his office. He now pays $42.97 a month for the service, which he justified by saying he works late sometimes and he wants to be able to watch the evening news when there are reports about his airport.
Both town officials who have the authority to approve such expenses said they had no idea Mangum made the charge.
"I don't see everything because we have a $93 million budget, so I would expect he had that approved through our finance department," said Town Manager Mike Reuwsaat.
Finance Director Roy Cuaron said the charge never came across his desk.
While a majority of the charges shown on town officials' monthly bank statements appear to be warranted, many expenses reviewed by the EXPLORER lack adequate explanation or are missing itemized receipts. It appears Marana has developed an honor system in which town officials can simply write "receipt missing" or "OK to pay" and the finance department routinely pays the bill without much question.
Marana's policies regulating the use of town-issued credit cards and travel expenditures appear to lack any serious repercussions for employees who don't turn in the proper paperwork to support their expenses, which Cuaron said is an ongoing problem his department struggles with each month. In the case of missing receipts, he simply leaves justification for any expenses up to the employees who made the charges, he said.
"Generally, when we don't get a receipt, we'll either ask them to send an e-mail or sign a statement that says, 'Receipt lost. OK to pay.' And, unfortunately, we do have to pay the bill because the charge was incurred," Cuaron said. "But then are there any repercussions to the employees? There's really not. No."
Marana's town-issued credit cards are mostly intended for incidental costs that arise during out-of-town travel, Cuaron said, where town employees are allowed to spend up to $40 a day at their discretion. However, several town officials are frequently using their cards to dine at local restaurants, where they've charged hundreds of dollars to the town without turning in receipts or adequate explanations.
"We rely on the department heads to use their discretion to make sure there are legitimate expenditures," Cuaron said. "We do a cursory review upon return to make sure they're not charging us for alcohol or for a guest, or stuff like that. But by and large, they're responsible to ensure that it's a legitimate purchase."
Cuaron said his department has caught purchases that shouldn't have been posted to accounts, though it's rare when that happens. He admitted his small department lacks the staffing needed to adequately follow-up on questionable charges that it might notice from time to time.
"I don't know if we do a good enough job in my department to do follow-up because of the time commitment, and you'll probably find there's a lot of statements that don't have all of the receipts," he said. "We will occasionally question, 'Gosh, you spent $23 for lunch?' But really, I feel if they stay within that $40 a day, we don't really say much."
Government-issued credit cards have proven to be ripe for abuse throughout the country. Government officials in other jurisdictions have taken advantage of systematic loopholes by making unwarranted purchases, such as alcohol during a dinner, and then either losing or not submitting the receipts.
An investigation by the Arizona Republic recently showed widespread misuse of Phoenix's city-issued credit cards, which appears to be a direct result of lax policies. The city manager has since slashed the travel budgets of some departments while Phoenix reevaluates its system and investigates the spending habits of its employees.
The Republic found questionable spending in nearly every department and layer of Phoenix government. In many cases, the problems arose because no one closely tracked the spending, nor were employees required to turn in itemized receipts or explanations for their purchases.
Two employees at the University of Arizona are under investigation for fraud after misusing their university purchasing cards to rack up thousands of dollars in personal purchases, including more than $9,000 spent on items such as American Express gift cards and books from Amazon.com.
Several purchases that showed up on some Marana town officials' credit card statements appear to be personal expenses, gifts for significant others, and money spent for spouses' airfare. However, the town officials who've made those charges said they either made them by accident or that they intended to pay the town back.
"We all know that we don't pay for spouses, but does that mean they haven't done it? I don't know," Cuaron admitted.
Court Administrator Joseph Teta made several purchases between Dec. 23 and 24, including $73.15 for perfume from a fragrance store on Christmas Eve, $54 at T.G.I. Friday's and another $100 at Discount Tire.
When asked about the purchases, Teta said he inadvertently made the charges to his town credit card amid the hustle and bustle of the holiday season. Marana's town-issued credit cards feature "Town of Marana" on them, though Teta said he has a personal credit card that looks similar.
"You know what it's like to throw out credit cards this time of year - I just screwed up," he said, adding that he paid the town back after realizing he used the wrong card. "It was simply an embarrassment and an error."
Judge James West, who recently booked a trip to Honolulu for a training conference on his town credit card, charged $32 for a Newsweek subscription in early November, followed by a $45 charge for an entertainment coupon booklet one week later. He said the coupon booklet is something the court buys every year, though it should have gone on the court administrator's account.
"He uses that for the office for people that do good work and that kind of stuff. We each get coupons once in a while," he said. "He's bought an entertainment book every year since I've been here."
An EXPLORER analysis of town records shows that Marana's travel spending has doubled in the last five fiscal years, soaring above three other municipalities of comparable size. More than half of the town's departments broke their travel and training budgets last year while town employees took more than $200,000 worth of taxpayer-paid trips across the country ("It's on the town: Marana's travel expenses soar past other Arizona municipalities of its size," EXPLORER, Jan. 25).
The town council's travel and training expenses in the past five fiscal years total $57,284, which doesn't include several costs associated with their annual out-of-town retreats (See story, page 1).
Reuwsaat's credit card tab for the last two and a half years totals more than $33,000, which includes hundreds of dollars in charges that have receipts missing. For a $43 dinner at La Parrilla Suiza posted to his account in November 2004, he wrote "Lost receipt!" and the bill was paid.
Reuwsaat's administrative assistant, Diane Mangialardi, has charged more than $10,000 to her credit card in the last two and a half years, which includes hundreds of dollars worth of meals from R&R Pizza Express for council members before meetings. During a council meeting at Heritage Highlands in April 2005, the town paid $530.33 to have a 239-sandwich buffet catered to council members and planning commissioners during a joint session.
Both Reuwsaat and Mangialardi often make charges on behalf of council members for airfare, hotel stays and meals, which has kept the credit card tabs of most elected officials under $1,000 for the last two and a half years, though Councilman Tim Escobedo appears to be the exception.
Escobedo has charged about $7,000 to his card since July 2003, paying for several hundred dollars worth of expenses that are not adequately explained or have receipts missing. He's rented tuxedos, reserved rooms in expensive hotels and spent several hundred dollars eating at Texas Roadhouse, a popular new restaurant in Marana where his daughter works.
Shortly after Texas Roadhouse opened last May, Escobedo ate there on three separate occasions, spending $140 on June 16, $82 on June 27, and $150.73 on July 11. Receipts show he left generous tips, one as high as $30. What town business was being conducted during the meals, or who he was eating with is unknown because he hasn't submitted some receipts.
The $140 charge at Texas Roadhouse in June is missing a receipt to show what he ordered, though it appears all he needed was a quick handwritten approval from Reuwsaat and the town paid the bill. Reuwsaat actually charged $126.29 to his own town-issued credit card during a meal at Texas Roadhouse on May 25, which included a $20 tip.
Escobedo was apologetic when asked about his spending habits, saying he agreed he should pay more attention to how he spends taxpayer dollars.
"You're right. I'm not going to disagree with that," he said, adding that he probably shouldn't be so generous when leaving taxpayer-paid tips, either, though he said none have gone to his daughter. "The dinners we had are usually within our own community and maybe I do go over and above helping those who are employed within the town."
Escobedo said he often takes government officials from other jurisdictions out to dinner to "build relationships." One of the dinners at Texas Roadhouse was with Pima County Supervisor Ramon Valdez, though Escobedo admitted there are probably better ways to develop the same relationships than spending taxpayer dollars on expensive meals.
Escobedo has spent hundreds of dollars at several other restaurants, including Oven's Restaurant in Tucson, Iron Skillet in Casa Grande and Rigo's Restaurant in South Tucson. Many of those charges lack explanations, though Escobedo admitted he sometimes accidentally uses his town credit card for personal purchases.
"Every once in a while, we have a tendency to use our credit cards without even thinking," he said. "I know I have a few credit cards and I've caught myself misusing the wrong card, because when you just reach for a card and charge it, you think about it afterwards and you're like, 'Oh, shoot. I messed this one up.'"
Bank statements show that town officials, including Escobedo, have exceeded their credit limits when spending excessively. Escobedo used his credit card to pay $543.84 for an unexplained car rental at Enterprise Rent-A-Car in July 2003, which left his account delinquent.
Mangum, who regularly spends about $20 for a car wash at the Ina Road Classic Car Spa, has exceeded his credit limit by hundreds of dollars on multiple occasions - at one point reaching a balance of $2,261.21.
He spent $1,139.71 making copies at Kinko's and shopping at Best Buy and Office Depot in November 2004. He spent another $56.17 at a gift shop in Phoenix to buy flowers for "Tammy" from the Arizona Department of Transportation.
Town Clerk Jocelyn Bronson also has bought gifts for others. She charged almost $90 for fruit baskets from a Tucson florist last March, which she said was to thank Pima County election officials for the last council election in Marana.
Mangialardi has used her credit card to spend $170 for a subscription to Forbes Magazine, $107.11 for lunch at Nico's Mexican Food in Marana, and $238.99 for food from the Roma Café before a council meeting.
This past November, she spent more than $470 at Party America and The Honeybaked Ham Co., which included $338.85 for holiday hams for town employees. She said they held a potluck and town employees brought their own side dishes.
In June 2003, the town manager charged $5,450 during an "employee appreciation event" at the Hidden Valley Inn in Tucson, where about 218 town employees were served $25 meals.
Reuwsaat has used his card to spend $138.54 for a dinner at the Mi Tierra Restaurant with Pinal County Supervisor Lionel Ruiz, and $195 for a one-year subscription to Trend Letter magazine, which he bought after seeing an ad in a magazine. According to the Better Business Bureau Web site, Trend Letter is actually a scam.
Cuaron charged $25.25 to his card while eating lunch at Hooters with Escobedo in June 2003. His receipt states it was a working lunch during which they talked about community facilities districts.
Escobedo charged $2,269 to his card at Big Lots in December. The purchases were made on a whim when efforts to plan for his nonprofit organization's annual holiday celebration, Miracle in Marana, fell through. He said he needed extra toys to distribute to children waiting in line at his Dec. 17 charity event.
"We closed down the event and shut down the toy line for a little while, and that's when we went to Big Lots," he said. "I was purchasing toys and that's when Michael (Reuwsaat) called me and said, 'Tim, if you need to, go ahead.'"
Escobedo said he received permission via cell phone from the town manager to make the large purchase. Reuwsaat said he called Mayor Ed Honea and received a strong indication that the council would support a $2,500 contribution. The council voted unanimously to approve the donation at its next meeting a few days later, though it didn't tell the public that Escobedo already spent the money.
Escobedo admitted that was a big decision not to make in front of the public and said he didn't know the full rationale behind holding a moot vote on the issue. He just knew he wanted to follow through for Miracle in Marana.
In the same time that Escobedo has made $7,000 in charges on his credit card, Honea and council members Patti Comerford, Jim Blake and Carol McGorray spent less than $3,000 combined. Councilman Bob Allen has spent $11.25 since joining the council last July.
Vice Mayor Herb Kai, a successful businessman, said he doesn't use a town credit card, partly because his finances are "a little bit different" than most of the council members, though he also thinks the cards are too much trouble.
"Generally, I think you'll get the consensus from every card user that they'll get you in trouble," he said. "And it's just more trouble for me to turn in every item and say what I had for lunch and who with, so I just usually buy lunch myself or someone buys my lunch."
Escobedo's spending habits are rivaled only by former Mayor Bobby Sutton Jr., who resigned last April after he was indicted by a federal grand jury on charges of conspiracy and attempted extortion. Sutton charged more than $1,600 on his town-issued credit card in the last two years before he resigned. Since 2000 has charged or been compensated for more than $10,000 worth of travel expenses.
The previously-unpaid council members voted unanimously in October 2002 to give themselves stipends that pay the mayor $11,400 a year and council members $9,000 a year. On top of that, Marana taxpayers have paid $21,824 for their cellular phone services since July 2003.
Since June 2001, taxpayers have paid almost $6,000 in mileage reimbursements to McGorray, who keeps a detailed log of her daily trips, including charging taxpayers for the 20 miles she drives from her home in Dove Mountain to town hall on a regular basis.
In 2003, Escobedo spent $558 to stay two days at the Pointe South Mountain Resort in Phoenix during a conference and another $585 for a two-day stay at the State Plaza Hotel in Washington, D.C.
Sutton, when he was mayor, spent more than $250 during three separate trips to Tuxedo's on Broadway. During a March 2004 trip to Best Buy, he spent $629, which paid for a $600 Sprint cell phone and some accessories.
Sutton made several other trips to Sakura, Molina's, China Thai, Sushi-Ten and Chipolte Mexican Grill, where he regularly spent at least $40 and didn't always explain the trips. He dined at La Parrilla Suiza for $59 on another occasion.
Reuwsaat said the town is considering questioning some of the expenditures that show up on credit card statements dating back several years, though the town's policies are so fragmented that he had to dig back to a Nov. 13, 2000, memo from the finance department to find anything that regulated food expenses.
Mangialardi said the town is well aware that some employees aren't turning in receipts and the town is actively trying to fix the problem. Cuaron, especially, has taken a strong stance on the issue, she said.
"I think our staff now has been made aware that they need to be more on top of it and to start documenting what they do," she said. "With Roy, you should see the hate mail he sends out to everybody, because that reflects back on him. We're not supposed to do that."
Mangialardi, who is one of only a handful of town officials who have kept detailed records of their purchases, said it's too easy to forget what certain charges were for if the proper notations aren't filed with itemized receipts when they're made.
"When you're talking about government money, you have to be so on top of all that stuff," she said. "It's the taxpayers' money and I live in Marana, too."