State probes Ludlow’s finances, records seized

By Elna Seabrooks
Staff Writer
    The state’s financial crimes unit in the attorney general’s office may be examining Ludlow’s books in addition to the current probe by State Auditor Neria Douglass. Douglass referred at least one matter to the attorney general’s office based on her examination of Ludlow’s chaotic recordkeeping.
Phone call about audit that wasn’t
    Douglass said she got a call from an auditor in Bangor who claimed “his name was on a document indicating he had performed an audit of the town of Ludlow, but he hadn’t performed any work there.” Since it “raised a concern,” Douglass asked for assistance from the attorney general’s office in preparing a subpoena for records. Assistant Attorney General Leanne Robbin heads up the Financial Crimes and Civil Rights Division. She declined giving any comment on the status of the referral or any possible investigation of Ludlow’s finances by her department.
No audits since 2002
    Douglass said after reviewing the state’s files, there were no records of an audit for Ludlow since 2002. Municipalities are legally required to have an audit every year and face penalties for not providing them to the state.
    Although Douglass says there are some clear records, the overall situation is not good, “not well organized and in disarray.” For example, there are no cash receipts for motor vehicle registrations — “no records that [she] can find for excise tax payments.”
Faulty financial practices
    Douglass conncedes that the town may possibly have kept copies of the Motor Vehicle Registration form as the town’s receipts when residents paid excise taxes on their cars, trucks and other vehicles. But, she added, “it is not a good financial practice because it does not document that someone took in cash or if cash was paid. Checks can be traced to some extent.”
    At the town meeting Feb. 15, residents received a handwritten list of cancelled checks over three years (2007-09) with dates, numbers, amounts and payees. Questions were raised about gaps in the sequence of numbers as well as the payees which, in turn, also raised issues for Douglass.
    First Selectman Ted Ivey is shown as a payee for more than $30,000 on that list over the three-year time period — predominantly for “labor” and “mileage.” Ivey denied any wrongdoing when reached for a comment last week. He said there are receipts for work he had done although he doesn’t know where they are and “everything will come out in the audit.”
    According to Douglass she has not found any records of a 1099 or W2 form provided for Ivey’s work. She said since the fraud statute requires that any contract over $500 be a written one, she would have concerns if those payments were performed under a contract, the circumstances of the contract and if the town authorized payments by warrants.
    Co-mingling of Ludlow’s money with its food pantry account could also be a thorny issue if the town did not authorize paying food pantry expenses out of the town budget. A recorded message for the town office states that the food pantry is open from 12-6 p.m. on the second Thursday and Friday of each month.
     The process of examining Ludlow’s records is going to take some time — more than Douglass said she anticipated to review “questions and discrepancies for which the town should find some answers.”
    Ludlow’s town office remains closed until further notice and the town manager, Marybeth Foley, is on suspension without pay as stated by Selectman Ginny McCain at the Feb. 15 meeting. McCain said Foley’s suspension is a “personnel issue” and she declined any comment except to say Foley had not produced “receipts and a copy of an audit.”
    Attempts to reach Foley were unsuccessful. However, Foley is still chairman of the board of selectmen in Orient where Alicia Silkey serves as town clerk, tax collector and treasurer. Silkey said Foley is a “friend and co-worker who has been unavailable. I am totally surprised by this because she has always been a professional here.”
    Another source said Foley “has not been talking or taking phone calls and she has even taken her e-mail address off the Internet.”
    Ludlow Town Clerk Karen Beaulieu will register vehicles and issue licenses for dogs, hunting and fishing. McCain said the towns of New Limerick, Linneus and Smyrna will help register vehicles during the time the Ludlow office is closed. Town officials said there no interest will be charged on unpaid property taxes from Feb. 5 until the office reopens.