Courier & Press investigation into credit card use in prosecutor's office leads to policy change

·6 min read

EVANSVILLE, Ind. — Vanderburgh County leaders have swept away a hodgepodge of ordinances governing official credit card use and passed a new one.

A much stricter one.

The ordinance approved unanimously by Commissioners Jeff Hatfield, Cheryl Musgrave and Ben Shoulders limits county government agencies to one credit card each and restricts use to official travel, emergencies and instances when delaying a purchase to get the commissioners' approval would "seriously impair" work. Emergencies must constitute "a threat to public health, welfare, or safety" as defined by state law.

More: Prosecutor's office credit cards paid for bra, gourmet strawberries, $10K in staff lunches

All other credit card expenditures must receive the express prior approval of the Board of Commissioners, the ordinance states.

"It's a whole different ballgame with credit cards," Hatfield, the commissioners' president and chief sponsor of the new ordinance, said Tuesday.

Hatfield credited the changes to revelations in a March 16 Courier & Press report on spending by the Vanderburgh County Prosecutor's Office using official credit cards. The newspaper's two-year analysis of charges in Prosecutor Nick Hermann's office uncovered thousands of dollars in staff lunches, women's clothing, gourmet drizzled strawberries and more.

"This could not have happened without that," he said.

More: Commissioner calls for changes on credit card use after report on prosecutor's spending

The new ordinance also limits each county agency's expenditures using credit cards to $5,000 annually – the prosecutor's office had a $50,000 limit – and offers a lengthy list of prohibited expenses.

First among those: "Public funds cannot be donated or given to charitable organizations or individuals."

Hatfield and County Attorney David Jones had said they were troubled by the revelation in the Courier & Press report that Hermann's office used a county credit card to purchase jewelry, a bra and other clothing at Torrid, a women's store at Eastland Mall.

More: How political unknown Diana Moers scored a major upset over Prosecutor Nick Hermann

The Torrid purchases were among about $4,900 in gifts Hermann's office bought for "Christmas angels" — an effort, the prosecutor said, to contribute to nonprofit Media Ministries Outreach's campaign to help people in need during the holidays.

Hermann argued that state law allows his office to use public money to make charitable contributions. But Hatfield and Jones said no county ordinance should enable charitable contributions with an official credit card. What if someone holding one of the cards used it to make a charitable contribution to a politically polarizing nonprofit, they asked.

Shoulders and Musgrave have said little about the credit card ordinance changes as they wound their way to Tuesday's outcome. They did not address it in Tuesday's Board of Commissioners meeting.

Musgrave was asked afterward whether she believes the previous ordinances governing official credit card use needed to be changed to prevent the cards from being used as Hermann's office did.

She said no.

"I believe the ordinance needed to be changed to comply with statute and best practices," Musgrave said by text.

Shoulders said by text that he was unavailable to comment.

Hatfield: Previous rules were too vague

The questionable credit card uses were only possible, Hatfield said Tuesday, because the county's existing ordinances were a jumble of vague, confusing and ultimately enabling language.

County government's employee handbook contained four separate credit card use ordinances — one for county departmental employees and one each for the prosecutor's office, the health department and the county community corrections office.

The ordinance the Board of Commissioners passed for the prosecutor's office in 2016 left plenty of room for interpretation. In addition to listing specific related expenses, it also allowed "any activity or program that is intended to reduce or prevent criminal activity" and "ancillary expenses required for the administration of the office."

All four of the county's credit card ordinances included the line about "ancillary expenses" – an invitation for trouble, Hatfield and Jones said. Any new credit card ordinance would have to be purged of ambiguity, they said.

Who held Vanderburgh County credit cards before Tuesday?

The county auditor's office provided the following list. The list includes Regene Newman, former director of finance in the prosecutor's office and now business director for Vanderburgh County Treatment Court. It was Newman's credit card that was used at Torrid, when she worked in the prosecutor's office.

  • Prosecutor's office – Nick Hermann, Jay Newton and Kevin McDaniel

  • Treatment Court/Community Corrections – James Aiken, Regene Newman, Alicia Maier, and Jacilyn Phelps

  • Health department – Joe Gries

  • Board of Commissioners – Kathy Glaser

  • Burdette Park – Zach Wathen

  • Sheriff's office – Dave Wedding

  • Public Defender's office – Christal Hampton

  • Assessor's office – Bill Fluty

  • Highway Department – Scot Wichser

When the county commissioners passed the new credit card ordinance on first reading on May 10, County Auditor Brian Gerth said there would be logistical issues to work out. The auditor, county government's chief financial officer, said he supports whatever action the commissioners take.

Given that the new ordinance allows credit card use essentially only for travel and training, Gerth said, "some of these departments are going to have to change how they spend."

"I know some of them have been using Amazon for supplies because they can get them cheaper through some other vendors," he said. "I actually have been working with Amazon, the business rep. They'll invoice us so (county employees) don't have to use a credit card."

That sounded good to Hatfield.

"We should gravitate away from credit card usage for any and all things and set up monthly billing accounts for most items that are necessary for ongoing needs," he said.

New ordinance is also a new strategy

Jones had said in March that Vanderburgh County needed to inoculate itself from the possibility of being blamed in lawsuits for controversial credit card expenditures by employees.

The Board of Commissioners has no authority to enforce a credit card ordinance against any office headed by an independently elected official or the health department, Jones said then. The health department is a separate entity governed by a board.

More: Vanderburgh prosecutor's credit card use stirs county attorney to seek change

The attorney proposed then that the commissioners retain the existing credit card ordinance for departmental employees and invite elected officials to adopt that policy as their own. Whatever policy they would adopt would have to pass muster with the Indiana State Board of Accounts in annual audits.

But Hatfield said Tuesday he and Jones ultimately abandoned that idea.

"Somebody has to take responsibility," he said. "These credit cards are owned by Vanderburgh County and are in the name of Vanderburgh County. The responsibility is ours."

Thomas B. Langhorne can be reached by email at tom.langhorne@courierpress.com.

This article originally appeared on Evansville Courier & Press: Vanderburgh County government offices have new credit card policy