Gary’s fire department and fire chief have been subpoenaed over the misuse of $8.2 million in EMS money

IN City Investigating Misuse of EMS Funds

Communications and records from Gary’s fire department and fire chief have been subpoenaed over the misuse of $8.2 million in EMS money.

SEPTEMBER 20, 2018

Sept. 20 — GARY, IN — The City Council is subpoenaing all communications and records from the city administration, mayor’s office, fire chief and the Fire Department’s business/financial manager as part of the council’s own investigation into the misuse of $8.2 million in public safety dollars.

The council voted 8-0 on a motion by Councilwoman LaVetta Sparks-Wade, a frequent critic of the mayor who was one of the first to inform the public of the misuse of EMS funds.

She said the council — the legislative body of city government — should conduct its own inquiry into what happened and the executive branch’s handling of the matter.

“We received a letter early during the afternoon prior to the vote about the subpoena,” Mayor Karen Freeman-Wilson said in an email to The Times late Wednesday night. “While I don’t believe the subpoena was necessary, I have every intention of working closely with the council to provide all information about the 224 account. We are pursuing the same goals, to ensure that taxpayer dollars are fully accounted for.”

Whittaker and Co., an accounting firm recently contracted by the city administration, determined through a detailed analysis that about $8.2 million was improperly transferred from the city’s emergency services fund.

Money was pulled from the restrictive account between Jan. 1, 2015, and March 31, 2018, to cover payroll and other expenses in the face of a multimillion-dollar structural deficit where yearly expenses outweigh revenue.

“We don’t just accept a report,” Sparks-Wade said at Tuesday night’s council meeting.

“You listen to it, but you come to a conclusion for yourself with your own investigation. You’d never see the U.S. House of Representatives blindly accept a report from the president. They conduct their own investigations,” she said.

Gary City Council President Ronald Brewer said he is sending the matter to the council’s investigations committee.

Sparks-Wade said she recently contacted Cender & Co., an accounting firm based in Merrillville that assisted the city with bank statement reconciliations, seeking documents.

The Cender firm also is no longer contracted by the city. The mayor and some council members have partially blamed Cender for not picking up the bank statement discrepancies sooner.

“(Karl Cender) was kind enough to give me a call this morning,” Sparks-Wade said. “He indicated that he was basically trying to not make any public comments, but (he agreed) to forward me the documentation.”

Eight council members voted yes on the motion to subpoena the records.

Councilman at large Herb Smith said he abstained from voting because he heads the council’s investigations committee and voting for the subpoena may be perceived as a conflict of interest.

The investigations committee would receive any documents as part of that subpoena.

Freeman-Wilson previously told The Times Whittaker’s analysis was evenhanded, transparent and “not a report to make the mayor or the city look good.”

The emergency services fund, known as Fund 224, is designated for deposits of emergency fees from individuals who use EMS services and largely supports EMS- and fire-related needs.

Municipal wire transfers between accounts are common to ensure payroll is met each month or to cover other expenses, but in this case, transfers took place for years without City Council approval.

Of the $8.2 million, $131,850 remains unaccounted for. Brewer described the missing dollars as “possible theft” and has called for a full investigation into the matter.

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