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Auditor: Findings in Covington "Will Be Significant"

The Kentucky State Auditor's Office will release the findings within its examination of the City of Covington's finances in early February.

Auditor Adam Edelen sat down with The River City News this week at his mother's home in Hebron.

"We are wrapping up the drafting phase of our investigation and I suspect we will be making that public in early February," Edelen said. "I would characterize our findings as significant."

Edelen could not go into specifics about what was uncovered since former Covington Finance Director Bob Due was arrested last August on suspicion that he stole what is now believed to be roughly $700,000 from the city's coffers since 2002.

Due is in the Kenton County Detention Center awaiting trial. He has pleaded not guilty to the charges and made two attempts to end his life since his arrest.

"I regret that Mr. Due tried to take his life a couple of times but none of that changes the tone, tenor, or the facts that will come out of our investigation," the auditor said. "It's a sad situation but it's one he got himself into."

The findings within the report, however, will shine a light on more than Due's alleged theft.

"This isn't just about being able to quantify a number to totally capture his degree of larceny, which we are going to do," Edelen said. "It will also highlight where the system broke down that allowed it to happen."

"We're talking about the fifth largest city in the state, a community known in every corner of the state. You have to have good government here."

"(The report) will not only fully capture his criminal abuse of office, but will also capture where the system broke down and how to fix it," Edelen said.

Edelen joined Mayor Sherry Carran and Kenton County Commonwealth's Attorney Rob Sanders shortly after Due's arrest to announce that his office would be looking into the extent of Due's alleged larceny and to say that his office would analyze the system in which the city's finances are handled.

Since Due's arrest, the City has been aggressive in its response. It filed a lawsuit against Due, his family, previous auditing firms, banks, and others, as well as launched a special task force to, as it is titled, "restore the public confidence in the City of Covington's finances".

Due was replaced temporarily by former Kenton County Treasurer Ivan Frye and in December the City hired a permanent replacement when Lisa Goetz took over for Frye.

Edelen applauded the city's response but said that more will still need to be done.

"I think the city has been aggressive about trying to restore the public trust but I would also say that restoring the public trust is something that takes a long time and it's not just about responding to an immediate crisis," he said.

Edelen cited the response in Florence after an even larger embezzlement took place. As he travels the state to present his "good government forum", Florence Mayor Diane Whalen has joined him twice and Edelen hopes to bring her along for future presentations.

"It's the hard gritty work of earning back the trust," Edelen said. "That trust gets restored by committed public officials. Diane (Whalen), to her credit, did an extraordinary job."

Covington City Hall has been cooperative, he said.

"I am pleased with the level of cooperation inside City Hall and inside the City of Covington," Edelen said. 

He also praised Sanders for prosecuting Due in Kenton County. "I always like to see public officials who abuse the public trust prosecuted in their communities."

"Rob Sanders and I have a very good personal and professional relationship. He's a reformer," Edelen said.

He cited the recent prosecution, conviction, and sentencing of former Commissioner of Agriculture and University of Kentucky basketball star Richie Farmer as a similar case.

"I loved that the local prosecutor had the courage to prosecute him locally which is where it should be done. I think the feds did a great job in helping me bring Richie Farmer to justice but it would be preferable that he be prosecuted in state court," Edelen said.

The auditor also said that Due could eventually face federal charges. He could not answer whether anyone else would be charged criminally in connection to the Due case. "All of that information will be released in the coming weeks," he said.

"These are going to be significant findings."
There will be more to come from The River City News interview with Auditor Adam Edelen, including remarks on his many examinations in Northern Kentucky and his thoughts on auditing the CVG Airport Board, where he is on his plans for the 2015 election cycle, and why he has one of the best jobs in politics.
Written by Michael Monks, editor & publisher of The River City News
Photo: Edelen, Sanders, and Carran at news conference last fall/RCN file