Audit questions AG financial procedures

A state audit said Missouri's attorney general needs a stronger conflict of interest policy when it comes to taking or rejecting campaign contributions from people or companies the office is dealing with.

The issue was raised last fall, when the New York Times reported Attorney General Chris Koster had taken campaign contributions from companies, or their representatives, while his office was investigating those companies or facing them in court.

The audit, released Tuesday, said Koster's office had not prepared a formal policy, even though he announced last fall he no longer will take contributions from people or companies under investigation by his office, either currently or in the previous 90 days, or from lobbyists or attorneys representing those individuals or companies; and will not accept gifts from registered lobbyists.

Koster's campaign said in a news release the "summation inaccurately represents the implementation of the conflict of interest policy. The Missourians for Koster Committee has implemented the most stringent conflict of interest policy of any Attorney General in the nation."

However, Deputy Auditor Harry Otto said: "What we're saying is, the office cannot be telling the campaign who they're working on.

"The campaign shouldn't know it - neither should the man on the street.

"But somebody inside the AG's office can be monitoring contributions and be monitoring who the campaign is soliciting contributions from and can tell the campaign, "Send that money back.'"

In its official response, included with the audit, the attorney general's office said, "By design, the litigation attorneys in the (office) have no contact with the Attorney General's political organization. They are expected to make decisions on their cases based on the facts and law of each case.

"Whether or not a particular entity, lobbyist or attorney may be a political contributor is of no relevance, and AGO attorneys spend no time concerning themselves with that issue."

Otto told the News Tribune, "In this case, there's a higher duty to keep the distance between political activity and governmental work - if it takes somebody inside state government saying to the campaign, "Don't go there. Don't do that,' that's a better use of that state employee's time than to say, "We just didn't tell them. So we took the money - and now the public doubts the actions.'"

Otto released the report Tuesday that also said the attorney general's office fails to document some of its choices for hiring outside counsel, doesn't always endorse checks as soon as they're received and sometimes doesn't pay the best rate for hotel rooms for employees traveling on state or court business.

"We are sticklers about documentation, period," Otto said. "If you tell us you're doing something and you're following your procedures - but your procedures are not written down, it's not documented. You don't have the initials. You don't have the dates.

"How do we know it really happened?"

The attorney general's office said it was improving its accounting procedures but rejected the auditors' conclusions on the hiring of outside counsel and medical experts.

Those experts generally are needed quickly and usually from a special area of expertise, the AG's response said.

Otto said good documentation would "prove it."

The audit questioned some of the raises Koster gave his employees that were above those given to other state employees.

Koster's office said those raises were given to keep valuable employees.

"That's a valid argument on his part," Otto said. "However, every statewide elected official and every department could say that - and we are consistent in the auditor's office" of saying regularly the state should follow the pay scales authorized by the Legislature.

The state auditor's office rated the Missouri attorney general's office as "fair" for some of its financial operations from July 1, 2011-June 30, 2014.

Otto released the audit and did media interviews after Auditor John Watson recused himself.

Gov. Jay Nixon last month named Watson as a temporary successor to Auditor Tom Schweich, who committed suicide Feb. 26 while at his family home in Clayton.

Otto said Schweich had been "aware of the players, the proceedings and the potential findings" of the attorney general's audit.

After taking over the auditor's job, Watson stepped back and had Otto manage the final audit report and its release.