Washington State Housing Management Style Contributes to Corruption: Investigation

The culture and management style in the former WA housing department contributed to an environment that allowed high-ranking government officials to defraud millions of dollars of the state, according to the investigation.

Paul Ronald White served as Director General of the then Housing, and was later appointed Assistant Director General when he became the Department of Communities.

He was also “an avid player who stole a significant amount of money from the state,” said Anthony Willing’s lawyer at a hearing of the State Commission for Combating Corruption and Crime on Monday.

White, the subject of the 2021 CCC reportis currently serving a 12-year prison sentence for fraud with millions of dollars he used to fund extravagant lifestyles and gambling habits.

“From 2009 to 2019, he used his corporate credit card and electronic money transfers to make payments to companies that did not provide services to the department,” Mr Willing said. “In total, he stole more than $ 22 million from the state.”

Open hearings

The CCC on Monday opened a public hearing on management in the department during White.

Commissioner John McCaughney said the investigation would look at how White’s “kidnappings” took place.

“We need to ask why his behavior has gone unnoticed for so long,” he said.

Giving evidence, Lorne O’Mara, who was CFO of housing at the time of Mr White’s crimes, told the commission that the department had undergone similar cultural changes when Graham Searle took over as CEO in 2009.

He said Mr Searle had a “separate” management style and liked to delegate decision-making later, including White, who “seemed to make a lot of decisions”. Mr O’Mara said that as CFO he had less contact with the new CEO than under his predecessor and did not regularly attend executive meetings.

From 2009 to 2019, he used his corporate credit card and electronic money transfers to make payments to companies that did not provide services to the department, ”said Mr. Willing. “In total, he stole more than $ 22 million from the state.

A lawyer who helps Anthony Willing

Financial and accounting systems have also changed, so there have been fewer audits and budget controls, and the use of contractors has increased, Mr O’Mara said.

Mr O’Mara said Mr Searle, who had known White before and was involved in his employment, had signed White’s acquittals on a corporate credit card.

He said White made payments for the benefits of his own company – in one case for a project that was no longer operational – and kept payments within limits so they would not attract attention.

“He would know how the system works and how control works, so he was able to bypass these controls by reducing the number of payments in dollars … so everything looked top-notch,” he said.

$ 2 million “sludge fund”

Mr O’Mara said White had a discretionary budget, probably approved by himself, of about $ 2 million. He also oversaw both financial and commercial transactions.

“The fact that he kept both financial records and commercial development as one job … it had to be separate,” he said.

“And in the budget process, he should never have been given a slush fund … a discretionary fund of $ 2 million to spend money.”

Asked whether the culture of the department was conducive at the time when Mr Searle was CEO, because Mr White could deceive the department and the state, Mr O’Mara said yes.

“The delegation and the process were transferred to other people, and it gave them the opportunity to make their own decisions and pay for themselves,” he said.

One has to ask why his behavior went unnoticed for so long

Commissioner for Corruption and Crime John McCatchney

He also said he believes Mr. Searle’s management style as CEO and the fact that he approved White’s acquittals on credit card contributed to White’s ability to spoil the system.

Mr. Wheeling asked Mr. O’Mara what could have been done differently during White’s crimes.

Mr O’Mara replied: “First, the CFO had to be the top level of the organization, he had to be on the corporate management team.

“This person would have complete control over any new system or process, and having more knowledge of what happened in the organization, one could instill these rules so that they are enforced more closely, but also take care of the budget process.

“They would ask why these particular people spend these discretionary funds and why they need it. Such questions could be asked at the level of the executive branch. “

On Friday, Mr. Searle is due to testify before the commission.

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