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Veterans commission chair disappointed with former director Gary Craig; attorney for Craig says state audit defames him

In City Hall on January 22, 2009 at 10:34 am

CEDAR RAPIDS — A State Auditor’s Office investigation concludes that the city’s former Veterans Memorial director, Gary Craig, spent improperly and was paid improperly while a city employee. 


Auditor David Vaudt’s report, released Thursday, ties Craig to $10,178 in improper spending and the report says Craig received $5,021 in income and payroll taxes as a city employee during hours he was working on veterans project unrelated to city employment. 


The state report goes on to say that it could not determine if there were additional improper financial issues because of the absence of adequate records. 


The report notes, too, that Craig repaid $6,800 in questioned spending back in August 2007 when concerns surfaced from the city’s Veterans Memorial Commission, to whom Craig answered, and at Valor Inc., a nonprofit organization serving veterans. Craig was Valor Inc.’s treasurer. 


Pete Welch, chairman of the Veterans Memorial Commission, said Thursday that the conclusions of the state auditor left him disappointed in Craig. 


“I’m disappointed as a I would be in any person put in a position of trust and the trust ends up misused,” Welch said. “I’m disappointed that someone wasn’t able to act in a completely above board and proper manner.”


Robert Wilson of Cedar Rapids, Craig’s attorney, on Thursday said the auditor’s report was in error.


Wilson noted that Craig was attempting to wear a couple hats at once with the city and Valor Inc. with the burden of the tasks pretty much left to him.


“He was all by himself trying to keep track of everything,” Wilson said.


He said Craig received too little compensation, not an improper extra amount.


“The state auditor apparently didn’t bother to take into consideration comp time,” Wilson said. “Gary had many hours of comp time. He volunteered many hours, and he never requested pay for it, and they didn’t consider that at all.”


Wilson said he doesn’t think the auditor’s report suggests Craig did anything criminally wrong, but even so, he said, “Gary does like to be defamed either by these accusations.”


Craig, who drives truck now, was on the road, his attorney said.


A member of the city’s veterans commission contacted the state auditor’s office in September 2007 asking for a probe into Craig’s handling of finances, and on Oct. 2, the commission put Craig on administrative leave. He remained on paid leave until he resigned March 1, 2008.


Craig was 53 and earning $62,067 a year when he left city employment.


“I resigned, retired, quit,” he said at the time. “I don’t know anything about it (the audit). Period. … I have done nothing wrong.”


Craig acknowledged then he had attended truck-driving school at Kirkwood Community College during his leave from his city job so he could learn how to drive semi-trailer trucks.


“My doctor felt it would be good for me,” Craig said then.


He said the thought was that it would help relieve the stress that had contributed to his being off work.


“I have a new career now,” continued Craig, who said he was driving a truck across the nation. “It’s a lot less stress.”

The state auditor’s report notes that the local veterans commission wanted state investigators to see if Craig had billed the city commission for work for the same hours he was working for Valor Inc., an entity created to renovate mobile homes for low-income and homeless veterans.


The report  said state auditors found 162 hours over 90 days from Jan. 1, 2006 through Sept. 10, 2006, in which Craig’s time records showed he worked for Valor when he was supposed to be working on his city job.

The report recommends that the Veterans Memorial Commission and Valor Inc. strengthen their internal controls.

The state investigation included a review of a long list of documents including Craig’s personal checking account, which was also used as the Valor Inc. account.

According to the report:

One of the investigation’s focuses was on a checking account of Stand Down, an annual Cedar Rapids event that provides clothing, food and other support for homeless veterans. Craig had primary responsibility for this account.

Among funds in the account were funds from veterans groups and money from the U.S. Department of Veterans Affairs.

The report points to minutes of an Aug. 27, 2007 meeting of a Stand Down/Valor Inc. financial meeting at which the report states that Craig admitted cash withdrawals had not been used for Stand Down expenses.

Additionally, the report notes that Craig deposited $6,800 into the Stand Down account in August 2007, which the report said “appears to be the return of money” Craig had admitted withdrawing at the Aug. 27, 2007 meeting.

As for Valor Inc., according to the state report:

Valor Inc. was incorporated in March 2006 as a nonprofit organization. Craig was its treasurer, and as such, he was instructed to open a separate bank account for it. He didn’t. Instead, he used his own personal checking account, the report states.

The result was that Valor receipts and payouts were commingled with Craig’s own personal finances.

By August 2007, the Valor Inc. board of directors had become concerned about the handling of finances, and asked Craig to make an accounting. The board then retained an attorney to review Craig’s documentation, which the attorney found insufficient to reach any conclusions.

Some of Valor Inc.’s funds were used to renovate mobile homes. Once complete, veterans would be placed in the homes with rent and utilities paid by the Valor Inc. account.

With the Valor Inc. account, Craig was paying rent and utilities for two individuals residing at the Hillside Mobile Home Park, though one board member said all Valor Inc. properties were in the Five Seasons park.

“Upon further review, it was determined that the Hillside Mobile Home Park address was that of Mr. Craig’s stepson,” the report said. The report calls that spending “personal.”


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