Pres. Obama nominates Thomas Walker to replace George Holding
President Barack Obama late Monday nominated Charlotte Lawyer Thomas G. Walker to replace U.S. Attorney George Holding, who has spent months overseeing federal probes of two of the state’s most prominent Democrats: two-time presidential candidate John Edwards and former Gov. Mike Easley.
Walker had long been thought to be the front-runner for the job, but it was uncertain whether he would take over the investigations into Edwards and Easley.
Holding, who covers North Carolina’s Eastern District from Raleigh, has been examining the campaign finances of Edwards, a former senator who admitted last year to an extra-marital affair. Holding also has looked into campaign finances and gifts to Easley, who just completed two terms as governor. Holding has called grand juries in both cases, but charges have not been filed against either Easley or Edwards.
U.S. Sen. Kay Hagan, who put Walker’s name forward as a potential nominee, said late Monday she wants Holding to finish those probes.
“I will continue to impress upon the White House that George Holding should be given the time to complete his investigations into former public officials,” said Hagan, a Greensboro Democrat, in a statement.
Still, she praised Obama’s choice of Walker, a partner at the Charlotte office of Alston & Bird and a former Special Counsel to N.C. Attorney General Roy Cooper.
Hagan called Walker “extremely qualified and fair-minded.” She added: “I expect the transition process to be undertaken in a mutually respectful manner with an eye toward what is best for the citizens of North Carolina.”
Obama also named U.S. attorney nominees, who must be confirmed by the U.S. Senate, to similar posts in Wisconsin, Wyoming and Michigan. “These fine attorneys have a extensive legal experience and a shared commitment to public service,” Obama said in a his prepared statement.
Walker, 45, has worked at Alston & Bird since 2003, and before that worked for Cooper for two years. At Alston & Bird, he concentrates on complex federal and state government investigations and white-collar defense.
He has served as an assistant U.S. attorney for the Western District from 1994 to 2001, and was an assistant district attorney for Mecklenburg County from 1990 to 1994.
Walker gave $1,250 last year to Obama’s presidential campaign and $500 to Hagan’s Senate campaign, according to records.
Last summer, Hagan submitted Walker’s name along with that of Benjamin David, the district attorney for Pender and New Hanover counties; and Hampton Dellinger, a partner in the law firm of Robinson Bradshaw & Hinson.
Burley Mitchell, a former N.C. Supreme Court justice, said Walker stood out as a contender for the position. Mitchell chaired a committee advising Hagan on the judicial nominations.
“He gives every indication of being fair and moderate,” Mitchell said.
Mitchell did note say that the nomination took did take longer than in previous administrations, but that Obama’s attention understandably could have been elsewhere.
“He has one or two things on his mind in addition to who will be U.S. Attorney in the Eastern District of North Carolina,” he said.
Mitchell said he doesn’t expect Thomas’ nomination to derail the ongoing Easley and Edwards investigations.
Hagan told the White House that she wanted Holding to finish that work.
“As I have previously discussed with the Office of the White House Counsel, it is my belief that the current U.S. Attorney for the Eastern District of North Carolina, George Holding, should be allowed to complete the ongoing investigations of public officials in the state,” Hagan wrote in July.
She continued: “During my conversations with the Office of the White House Counsel, there was an interest expressed by the Counsel’s office to potentially appoint a separate individual to begin handling other matters not related to these investigations. Should you decide to do so, the following names are provided for your consideration.”
But in its spare news release Monday, the White House made no mention of whether Holding could stay on at all. Efforts to reach him were unsuccessful U.S. Sen. Richard Burr, a Winston-Salem Republican, was not immediately available for comment late Monday.
The Charlotte-Mecklenburg DSS Fraud mystery: Where did money go?
Internal e-mails reveal new allegations of misspending at the Charlotte-Mecklenburg County Department of Social Services, raising more unanswered questions about what happened to money intended to help needy children.
Some of the more than 1,000 e-mails the Charlotte Observer obtained through a Public Records Request provide the most detailed account to date about the agency's accounting fiasco.
E-mails show:
Officials suspected an employee wrote $80,000 in checks to herself from donations.
An administrator questioned why other donations were used to buy $340 diamond earrings, leather coats and a $300 DVD player.
A top executive complained that a senior fiscal administrator frustrated co-workers with her "inability to explain the simplest concepts of revenue and expenses."
After nearly a year, officials have never said who was at fault for $162,000 that disappeared or whether anyone was disciplined.
No one has been charged in an ongoing police investigation and a county report says officials cannot be certain where the money went.
Meanwhile, donors are left to wonder whether their generosity ever helped buy Christmas gifts for those in need.
In one e-mail, a woman describes calling the county in 2007 to give $900 for single mothers at Christmas. The person who answered the phone told her to make a check payable to the worker's sister.
The donor said she grew suspicious and made the check out to the county, but the idea that it may still have been misused is "like a kick in the stomach."
In another e-mail, a founder of Second String Santa said he was concerned whether kids received the more than 50,000 toys his group had donated since 1989.
Will Miller said he believes some of the toys reached children, but he's not sure about the rest.
"Will we ever know? Probably not," he said.
Two Charlotte-Mecklenburg County Commissioners said they have asked County Administrators for a full accounting of what went wrong at DSS but have yet to receive answers. County officials have never explained who was responsible, they said.
"To fix it, you have to admit all the stuff that is messed up," Commissioner Bill James said. "They don't want to do too much digging."
County administrators declined interview requests. Instead, a county spokesman released a prepared statement saying appropriate fiscal controls have been installed in response to an outside audit and an internal investigation.
"Our review of the e-mails we provided and your follow up questions did not reveal any new information that would suggest any change in the audit findings or in management's response to those findings," the statement said.
Some commissioners said they have been told that the employees involved have either left county government or been placed in new positions.
Unusual spending patterns
DSS spends $176 million annually and employs 1,200 workers to assist Mecklenburg's poor and neglected. The agency administers everything from food stamps to foster care and child protection services.
Last spring, DSS Director Mary Wilson ordered financial audits following reports of suspicious spending.
Auditors looked at multiple spending programs and financial practices in the agency. They found a $10,000 check made out to an employee, missing and altered receipts and money for kids spent on office supplies.
County leaders responded by suspending the programs, putting DSS finance under direct county control, training workers on accounting procedures and ordering a review of financial procedures in each county agency.
The Observer reviewed e-mails dating from December 2008 to July 2009 for seven current and former county administrators, including Wilson, County Manager Harry Jones, County Finance Director Dena Diorio and Internal Auditor Cornita Spears.
E-mails show county officials noticed unusual spending patterns as early as last December but did not disclose problems to the public until March.
On New Year's Eve, Wilson told staff she had suspended a voucher program the agency used to purchase clothes and other items for clients at local stores. She wrote that officials were worried about a lack of oversight and a spike in spending.
One monthly retail bill leapt from between $5,000 and $6,000 to more than $20,000 in October 2008, the e-mail says. Employees turned in receipts only 30 to 35 percent of the time, she wrote.
At one time or another, workers possessed or had access to numerous credit cards and gift cards, including some to Bath & Body Works, Bass Pro Shops, Macy's, the Cheesecake Factory and Outback Steakhouse.
Outside auditors verified for county administrators that DSS workers possessed county-issued credit cards, including 10 credit cards for Sam's Club, three for Harris Teeter and an online charge account with Amazon.com
In February, county officials asked internal auditors to look into questionable spending, including purchases of diamond earrings, leather coats and a DVD player.
An e-mail to one of the auditors from a human resources consultant said the purchases raise "many questions and concerns."
According to the county's statement, most gifts were typical children's items such as toys, clothes and books. More expensive items such as diamond earrings and leather coats were approved purchases for foster children who reached special milestones like high school graduation, the statement says.
"Receiving a gift of some significant value was viewed as an incentive for other children who were in foster care to set goals and accomplish them," the statement said.
Commissioner Harold Cogdell said he spent part of his early childhood in foster care and believes the gifts are a good idea.
"It makes sense to me to show the kids some love," Cogdell said.
A new Accountant
DSS has endured multiple management shakeups in recent years. The latest came when Wilson reorganized the agency after she was hired in July 2008.
She laid out the reasons to hire a new finance director in a February e-mail.
Wilson wrote that the senior fiscal administrator who managed DSS finances failed to provide reports about oversight, alienated staff and lacked the ability to conduct productive discussions with senior county executives. The e-mail does not name the senior fiscal administrator.
DSS later hired accountant Angela Hurlburt to oversee its finances.
James, the commissioner, said he has asked for the names and background information on Hurlburt's predecessors. He wants them to answer questions from the Board of Commissioners' Audit Review Committee, which investigated accounting lapses at DSS.
He said administrators have failed to respond to his requests and complained that officials "keep us in the dark."
Other Charlotte-Mecklenburg Commissioners disagreed.
Chairman Jennifer Roberts and Commissioner Dumont Clarke said county leaders have already put in place reforms that will protect taxpayer and donor money.
"The highest priority" is implementing new financial controls, Clarke said.
Shifting the Finances
Auditors from Cherry, Bekaert & Holland reviewed DSS and found that Mecklenburg officials responded appropriately. The county's Audit Review Committee came to the same conclusion.
But DSS Director Wilson bristled at one of the major reforms.
Leaders put DSS finance under the direct control of the county's main finance department after allegations of misspending surfaced.
In April, Wilson sent an e-mail to County General Manager Michelle Lancaster to complain. Calling the decision "premature" and "shortsighted," Wilson said there are emergencies when DSS workers must write checks immediately, including occasions when the agency takes children in custody who need clothes, toiletries and school supplies.
"I understand the urgency at the time, but there was a reason DSS had check writing capability and I think we threw the baby out with the bathwater instead of fixing the underlying issue, which is documentation and accountability," Wilson wrote.
Donors left with questions
Past supporters of the DSS Christmas charity include Young Lawyers, employees of Wachovia and Bank of America, and Project Joy, the holiday fund drive initiated by Observer columnist Tommy Tomlinson. The Christmas charity, known as the Giving Tree, is now run by the Salvation Army.
The donor who gave $900 e-mailed the county in July after learning about accounting failures from news accounts. She attached a picture of the check copy she made around Christmas in 2007.
She wrote that she did not remember the name of the woman she spoke with on the phone.
The donor said she and her family all pitched in to raise the money so she could assist women like her who had struggled as single mothers.
When she heard there were allegations of misspending in a DSS charity program, "It's like your stomach just drops."
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Sources: McClatchy Newspapers, News & Observer, Charlotte Observer, Whitehouse.gov, Charmeck.org, Amazon.com, Google Maps
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