The political appointee overseeing the Kentucky Division of Emergency Management insists that nothing illegal occurred there, despite a scathing state audit report on the agency's spending that was sent to prosecutors Aug. 6.
"I just cannot imagine anything done within Emergency Management that was criminal, frankly," Maj. Gen. Edward Tonini said in an interview Thursday.
Tonini oversees Emergency Management as head of the Kentucky Department of Military Affairs. One of his aides, Mike Jones, is interim director at Emergency Management and is responsible for drawing up a response plan to the audit.
Gov. Steve Beshear expressed "grave concerns" last week about Emergency Management after auditors questioned millions of dollars in spending and accused its managers of altering financial records and threatening employees to stay quiet. Beshear accepted the resignation of John W. Heltzel, his appointed director of Emergency Management.
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State auditor Adam Edelen referred his report to Attorney General Jack Conway, the Executive Branch Ethics Commission and the U.S. Department of Homeland Security. Emergency Management receives tens of millions of dollars a year in federal funding to coordinate state and federal responses to disasters.
In a meeting Monday with about 100 Emergency Management employees, Tonini spoke defensively about the public scrutiny the agency faced.
"There have been people who have taken question about the integrity of this group of people. That, to me, is totally unfounded," Tonini said. "I don't believe that there was anything done by anybody — in the immediate few or even anybody in leadership — that was done intent-wise except for the betterment of the people of the commonwealth of Kentucky. I believe that very, very strongly."
"Now, that's not to say that I believe everything followed administrative procedure," Tonini told the employees. "The fact of it is that we need to clean up our act a little bit in terms of the administrative way that we process things and do things. But in terms of the intent, there is no doubt that there was nobody that was putting money in their pocket. There was nobody that was trying to squander public monies."
The Lexington Herald-Leader obtained a recording of Tonini's remarks from Emergency Management employees who said they worry that the Beshear administration will not demand meaningful reform inside the agency.
Beshear spokeswoman Kerri Richardson declined to say Thursday how the governor felt about Tonini's expressed opinions.
"The auditor's report revealed several very serious concerns at Kentucky Emergency Management, and we took quick, appropriate action to change the leadership there," Richardson said. "Acting director Mike Jones is creating an aggressive action plan to address the issues in the auditor's report to ensure those problems don't happen again."
Tonini, a Beshear appointee, defended his remarks in an interview.
Tonini called Heltzel a trusted friend and said he disagreed with the audit's "demonization of John Heltzel and the work he did." He said Emergency Management made "an administrative mistake" by not carefully tracking its various revenue streams and its spending, such as on an annual conference in Louisville that offered alcohol, live entertainment and gifts. But the agency was not intentionally dishonest, he said.
"If somebody said to me, 'Is John Heltzel fundamentally dishonest or is he a bad guy?' the answer is 'No,'" Tonini said Thursday.
"I didn't spend six months investigating this, so I don't know all of what was said or reported to the investigators," he said. "But based on what I do know, I just cannot imagine anything done within Emergency Management that was criminal, frankly. Ethics is something else. Ethics can be read a number of ways by a number of people. But I know John to be an honorable person. And it's my belief that everything he did was in the effort of making Emergency Management more effective for the people of the commonwealth."
Edelen said he stood by his investigation.
In his report on Emergency Management, Edelen estimated that questionable spending from 2007 to 2012 totaled $5.6 million. He said his auditors had difficulty determining exactly how the agency spent money because Heltzel and other managers "openly threatened" employees to intimidate them into staying quiet. Finances were poorly organized, and spending records, such as hotel invoices, were altered or manufactured to conceal where money went, Edelen said.
Previous years' audits criticized Emergency Management and the Department of Military Affairs, under Tonini's command, for misspending federal funds from the Chemical Stockpile Emergency Preparedness Program. Some of those audits led to resignations and criminal charges against local officials who received CSEPP money from Emergency Management.
"The facts of the report speak loudly and clearly for themselves," Edelen said Thursday.