Phil Roy wanted a camper.
It cost $15,000, but he didn’t have the money.
What Roy did have was access to cash – someone else’s cash.
Roy, the longtime Republican politician from Somerset County, managed a federally funded agency’s checking account as well as the checking account of the state Republican Party, where he was treasurer.
So in August of 2009, Uncle Sam and the Maine GOP bought Roy the camper.
Roy eventually paid the money back with interest, but in the process everyone from the FBI to the state auditor has been involved trying to find what happened, who’s responsible and what should be done.
Roy is a former Somerset county commissioner and chairman of the Fairfield town council. He was also a member of the Maine Board of Corrections Working Group, and the Kennebec Regional Development Authority and the Kennebec Valley Council of Governments.
Until now, what state officials have called the “misuse” of federal funds was kept quiet. Roy was allowed to resign from his job as fiscal agent at the federally funded agency, Central Western Maine Workforce Investment Board, and as treasurer of the Maine Republican Party without public acknowledgement that he had used both groups’ checking accounts for personal purposes.
And now he has authority over the $7 million-dollar budget for Hancock County, where he serves as chief financial officer.
Some of those familiar with Roy’s financial management history say he should never be in charge of public money.
“I would certainly not consider employing the individual in such a position,” said Peter Thompson, a longtime member of the Workforce Board.
“He certainly has shown poor judgment in terms of his fiscal responsibility,” said Craig Anderson, a vice president of Goodwill of Northern New England, who was the Workforce Board chairman during late 2009.
Roy did not make himself available for an interview, after repeated requests.
Using documents obtained through a Freedom of Access Act request and interviews, an investigation by the Maine Center for Public Interest Reporting reveals that in late August, 2009, Roy, who was the volunteer treasurer of the state Republican Party, asked GOP Chairman Charlie Webster if he could borrow $15,000 of party money for personal reasons.
Webster says he said “no,” and thought that was the end of it.
Roy then used a GOP credit card to transfer $15,000 into the party’s checking account. Then, wrote Ron Smith, the independent auditor who provided a narrative of the events to State Auditor Neria Douglass, “on around August 27, 2009,” Roy “transferred $14,600 from the Maine Republican Party’s operating checking account to an account in New York to pay for and complete the purchase of a camper.”
Next, Smith wrote, $15,000 from the Workforce Board’s checking account “went from the checking account to an account that Mr. Roy was personally authorized on at Savings Bank of Maine. The funds were then wired out of that account to pay for items of Mr. Roy’s personal use.”
Roy used that money to reimburse the Republican Party for the $14,600 he used to buy the camper, according to the auditor’s narrative.
At the time, Roy worked at the Workforce Board part-time as the fiscal agent. The Workforce Board is one of four agencies in Maine that funnel federal funds into programs to train workers, and match employers and workers. The four agencies oversee the operations of the state’s Career Centers. The one for which Roy worked covered Oxford, Androscoggin, Kennebec and Somerset counties.
According to Gary McGrane, a Franklin county commissioner who was a member of the Workforce Board when Roy got the $15,000 from the agency, the normal oversight procedure that requires state approval and a second signature on checks by an agency board member didn’t happen.
“All the checks had to be approved by the state agency, and I would oversee that and would have the authorization from the state to go ahead, and he bypassed the whole process,” said McGrane.
These transactions were discovered in December 2009 when the federal government performed a routine audit of the Workforce Board’s finances.
Board member Thompson said Roy should never have used taxpayer funds to buy a camper.
“It was absolutely the wrong thing to do, not only legally, but also ethically,” said Thompson.
Roy said he borrowed the $15,000 in federal money from the Workforce Board., according to Smith’s narrative.
But if it was a loan, it wasn’t documented.
“No promissory note was executed between the parties,” wrote auditor Smith.
Roy told auditors that a state official told him he could borrow the money. But State Auditor Douglass denies that Roy was given permission to use federal money for personal purposes.
And Roy told auditors that the Workforce Board’s executive director gave him permission to take the money, too. That is true. The executive director, Bryant Hoffman, told auditors that Roy asked him for it, saying he needed the money “for his personal residence.”
But Jim Trundy, another member of the Workforce Board, said getting permission for the so-called loan doesn’t make it right:
“If I go into my boss one morning and say, ‘One of my staff is really irritating me, can I shoot him?’ If he says yes, that doesn’t make it okay,” said Trundy, who adds he was “appalled” at what Roy did.
Roy told the auditors that “the funds had been used to pay his mortgage so he didn’t lose his home,” according to state records.
After auditors discovered the loan in early December, Roy paid it back.
In mid-December, Workforce Board Executive Director Hoffman called a small group of agency board members to an emergency meeting to review the federal auditor’s findings.
The findings had been communicated to Hoffman in a letter about “possible improprieties” from the state Department of Labor’s Melanie Arsenault, head of the Bureau of Employment Services. The department has some oversight responsibilities for the state’s workforce investment boards.
Arsenault’s letter not only questioned the inappropriate loan to Roy, but also a $100,000 line of credit opened by Roy without documented board approval.
She requested that the Workforce Board “suspend Philip Roy from conducting any financial affairs for Central Western Maine Workforce Investment Board until this matter is investigated and resolved by the appropriate authorities. The financial records that are stored at Mr. Roy’s office/residence must be seized immediately and turned over to … RHR Smith, the auditors for Central Western Maine Workforce Investment Board.”
According to McGrane, board members discussed whether to fire Roy.
“Some people such as myself were ready to fire him. There was concern about legal ramifications whether or not we were doing it properly in accordance with federal regulations,” said McGrane.
In the end, Roy was allowed to resign.
Executive director Hoffman also resigned later in 2010, at least partially due to the Roy incident, according to Thompson and other board members.
“The executive remained in place for a period which helped with transition,” said Thompson, “but it was clear he was going to take a step down and resign.”
Hoffman did not agree to be interviewed, despite multiple attempts to reach him.
In January, 2010, Roy resigned his position as GOP treasurer.
In June, 2010, Dennis Corliss, Service Center Director at the state’s Department of Administrative and Financial Services, wrote State Auditor Douglass that Rob Schenberger, one of his financial analysts at the center, “was contacted today by the FBI. They were looking for copies of pictures we had taken of text messages sent by Mr. Roy to Rob.”
In October, 2010, Corliss wrote to the new director of the Workforce Board, Jeffrey Sneddon, that “there is an ongoing federal investigation.”
The FBI would not confirm whether the investigation is still under way.
Workforce Board members who knew about the incident have never spoken publicly about it until now, and agency leaders failed to notify the majority of other board members until months afterwards.
“I would like to understand how something of this importance was kept from the full board for 3 months,” wrote board member Linda Walbridge in a March 17, 2010 email to other board members and staff. “The explanation that the Executive Committee found out about this the day after our last meeting is not convincing.”
Nor did board members tell Roy’s employers at Hancock County what had happened.
“Once he was done, he was done, we didn’t follow him around,” said McGrane. “If they’d asked us, we’d have told them. They didn’t do their due diligence, did they? That’s on their head, not ours.”
Likewise, when Roy left the GOP treasurer’s position in January 2010, party Chairman Webster simply told party members that Roy “believes that his attention should be dedicated to his family and his work.”
Charlie Webster. Photo courtesy the Portland Press Herald.
But Webster knew what had happened. He and party attorney Dan Billings, who is now Gov. Paul LePage’s in-house counsel, had been told in December 2009 about the GOP funds diversion by Smith, the independent auditor, who investigated the incident at the request of the state.
Billings said he could not speak of the incident because of attorney-client privilege.
Webster said he felt no need to inform his fellow Republican Party leaders about what Roy had done.
“I couldn’t see at that point what difference it made,” said Webster. “I didn’t need to create a bunch of drama for the Republican Party. He made a mistake, he acknowledged it, he admitted to me he had done it and he resigned.”
In fact, the Republican Party had just been through a lot of drama around Roy’s management of its fiscal affairs. While Roy was treasurer, a paid bookkeeper had stolen almost $50,000 from the party; according to the Kennebec Journal, she ultimately pled guilty to forgery and felony theft charges, was ordered to pay restitution and sentenced to jail for six months.
That led to calls by some party members for Roy to resign as treasurer. Billings was the most prominent advocate for Roy’s removal, writing on the conservative website As Maine Goes, “Phil Roy was asleep at the switch while the party was being looted, yet he continues to hold the position of Party Treasurer.” According to a posting by Billings, a motion to remove Roy as treasurer failed.
The political price of publicly undermining the party’s image as fiscally responsible was evidently on Webster’s mind when Roy left over his own misuse of funds.
“What was I supposed to do, have a press conference? And hold it in front of the Democratic Party headquarters?” Webster said.
One of Roy’s bosses in Hancock County, Commissioner Steven Joy, began his service as commissioner at around the same time Roy went to work for Hancock County in early 2009. Joy said he did not know precisely what had happened at the Workforce Board.
“As far as I know nobody has sent us any information on that,” he said. “I was aware that there was something that happened there, but I wasn’t aware of the minute details.”
Is he concerned?
“Of course I’m concerned about that,” said Joy.
“I guess my question is, if somebody has convicted him or is going to charge him, we would take care of that right that minute. But I can’t do that on accusations I can’t tell are true.”
Financial conflict has continued around Roy in his job as chief financial officer for the county.
In early 2011, Roy had the county treasurer move $750,000 in federal funds from the Hancock County Airport budget into the county’s general fund. The airport’s manager, Allison Navia, charged that the transfer violated federal rules about how airport monies should be managed. The Federal Aviation Administration is now reviewing the incident, according to spokesman Jim Peters.
Joy said that Roy had been “overzealous” in investment of county funds, leading to a cash flow problem that required using airport funds to meet expenses. Joy said that the funds “were all under our control,” but that there was “commingling” and new procedures have been put in place to avoid future problems.