Audit says former fire authority leaders misused funds; criminal probes recommended

The state auditor came down hard Wednesday on former leaders of the Unified Fire Authority for alleged self-dealing and misuse of public money.

In a pair of reports, Auditor John Dougall's office said the UFA board should seek criminal investigations of its former chief and deputy chief for a dozen potential violations and should attempt to get half a million dollars in reimbursement from them and three other former fire department administrators.

The Office of the State Auditor also recommended the UFA file an ethics complaint with the Utah State Bar against the fire agency's former legal counsel, Karl Hendrickson.

Among the allegations are that former Chief Michael Jensen may have misused public funds to the tune of $370,000 in approving generous incentives for himself and other top agency managers, that these leaders took junkets on the public dime and that hiring of relatives was widespread, possibly in violation of anti-nepotism laws.

Jensen, who also is a current Salt Lake County Council member, cried foul that he was denied a chance to respond to the findings before they were released.

"The [UFA] board had the audit for a week. Select media outlets got it [Tuesday]. Everybody had notice but me, and I'm the primary focus of the audit," Jensen said. "In the findings, there are numerous inaccuracies, mischaracterizations and distortions harmful to my character and damaging to me. They're not representative of what I did at UFA."

Jensen was elected to his fifth term on the County Council last November over nominal opposition from a write-in candidate.

The audits of the agency — which provides fire protection and emergency services to 525,000 residents of Salt Lake County and Eagle Mountain in Utah County — found that Jensen and Chief Deputy Gaylord Scott put their personal interests ahead of the organization's but got away with it for the last five years because board members trusted the chief and failed to provide proper oversight.

The UFA board response, included in the audits, said: "We are deeply troubled and disappointed with not only the volume of the findings, but also the specific actions and behaviors of the executive leadership."

It went on to acknowledge "… the findings represented in the report identify multiple instances where the former chief and former deputy chief have misused public funds, breached their employment contracts, broken existing policies, unilaterally changed policies to suit their purposes, provided preferential treatment to family members, misrepresented personal purchases as business related, improperly used technology resources, failed to properly document travel expenses and improperly used vehicles for significant personal use."

UFA board spokesman Christopher Pengra, mayor of Eagle Mountain, said the recommended criminal investigations will be discussed at the board's next meeting, Feb. 21.

"We view this as a matter of trust," Pengra said. "The auditor has made those recommendations for a reason and we've taken note. As unfortunate as it is to have findings like this in an audit report, the board has no desire whatsoever to run from accountability. We now know exactly what has been happening outside of our view and there are clear indications of action we need to take to make this a better organization."

Board members include three Salt Lake County elected leaders (Mayor Ben McAdams and Councilmen Richard Snelgrove and Sam Granato) and officials from eight cities (Cottonwood Heights, Holladay, Draper, Alta, Taylorsville, Riverton, Midvale, Herriman and Eagle Mountain) served by the UFA.

Jensen resigned from the UFA in August after 12 years as the agency's first and only chief. Scott departed one month earlier. Hendrickson left in October. Chief financial officer Shirley Perkins had been replaced in January 2016.

In addition, the audits suggested a possible criminal probe into the actions of Ryan Perry, the clerk for a subset group of cities in the UFA and Jensen's administrative assistant with the County Council.

Perry and Hendrickson did not respond to requests for comment. Efforts to contact Scott and Perkins were unsuccessful.

Auditors determined that:

• Jensen had possibly misused public funds in approving incentives totaling $370,000 for himself, Scott, Hendrickson and Perkins without board approval and in breach of their employment contracts;

• Jensen, Scott and Perry went on weeklong junkets to Phoenix during baseball spring training and to Anaheim, Calif., that involved minimal fire department work. The Phoenix trip was organized by a company that received a contract, outside of proper procedures, to build a fire station in Taylorsville;

• The chiefs may have violated state nepotism rules. Jensen had two sons, two brothers-in-law and a cousin under his command. Scott had three nephews.

• Scott frequently extended his work trips and filed expense reports without adequate support documentation and filed some requests for reimbursement that exceeded his expenses;

• Jensen and Scott would rent vehicles on out-of-town trips and put numerous miles on the vehicles even though their meetings were within walking distance of their lodging;

• Both racked up hotel bills in excess of daily allowances and spent lavishly on meals;

• Scott bought two collector rifles that were to be sold at what the auditor dubbed a potentially illegal raffle that was never held;

• Scott spent $23,000 and Jensen $1,600 on technology equipment (iMacs, iPads, stainless steel Apple watches and cameras).

Most disturbingly, the audit said, when they returned the equipment to the fire department upon termination, "the computing devices returned had been erased; however, we were able to recover much of the data using a professional forensics team."

That reconstruction found that one of Jensen's computers had "a significant number of files which indicated it was used for a personal family business." Other equipment had files soliciting campaign contributions, as did erased records subsequently recovered from Perry's computer.

Scott's computer, the audit said, "contained thousands of pornographic images."

The audit also found there was no accounting for money that fire department employees paid into a fund to supply fire stations with television and newspapers.

Over the five years of the audit, the amount of money paid in incentives to rank-and-file firefighters rose 4.6 percent while the top four administrators saw theirs go up 467 percent.

In addition, the report recommended firing an unidentified assistant chief who refused to answer auditors' questions about his expenses.

Jensen, an elected County Councilman since 2001, called the findings "unbalanced," adding there are "reasonable explanations for all of the things in the audit. But I didn't get a chance to provide my responses. I can only go to media outlets after reviewing it for a few hours."

He said he could not go into detailed explanations at present and is considering all of his options. But, primarily, he wants people to know "I love the UFA. It's an organization I built, and everything I did was in the best interests of the UFA."

But the UFA board's response to the auditor contended "the payment of incentives to the top four executive officers, done contrary to UFA policy, created a clandestine environment that for years perpetrated these misuses of funds."

"We regret most of all that these proceedings reflect negatively on the rank and file of UFA who daily put their lives on the line and are totally accountable for their actions," the board added. "These problems were the responsibility of a few high-powered individuals. … We intend to restore the reputation of the agency and create an employment environment void of cronyism and dishonesty."

Jensen's replacement as chief, Dan Petersen from Medford, Ore., began his new job on Tuesday.

mikeg@sltrib.com