Member Login

Auditor to Release Findings in Covington Examination: A Timeline of Events

Kentucky Auditor Adam Edelen will be in Covington on Thursday to release the findings of the special examination conducted by his office that looked into the city's financial operations following the arrest of former finance director Bob Due.

The report will be released at 10 a.m. at Covington City Hall. The River City News will offer live updates via Facebook and Twitter.

When Edelen arrives, it will have been 175 days since Due was arrested, an event that shocked people inside and outside City Hall and a catalyst for a chain of events that further fractured an already disjointed city commission.

On the evening of Friday, August 23, Due was booked into the Kenton County Detention Center, accused of stealing hundreds of thousands of dollars from the City of Covington.

The arrest came just two months after a jubilant Due, atypical of his usual persona that even he once described as "buzzkill", joined City Manager Larry Klein in announcing an ambitious budget and plans to reinvest funds into the city's ailing infrastructure. That plan also included paths to a new community health center and other quality of life initiatives. The budget outlined plans for the hiring of more police officers and firefighters. He and his staff had calculated a method in which non-union employees would see regular increases in pay.

The weeks and months leading up to his arrest were publicly positive for Due, a man who had overseen the city's finances reach a perilous point in 2011 when warnings came from City Hall that employee paychecks were on the verge of bouncing and that the city itself was scarily creeping towards insolvency.

What no one knew was that while Mayor Chuck Scheper outlined and successfully executed a plan to return the city to solid financial footing through cuts and reorganizations and new union contracts, Due was allegedly pocketing city funds, passing them off as checks written to outside vendors.

At the beginning of the summer, Due joined Klein at various civic events and appeared on television and in the newspapers, celebrated as a co-author of a bold plan to re-envision the city.

By summer's end his face returned to those same media outlets, only this time in the form of a mugshot.

But the turn in media coverage was only the beginning of Due's public downward spiral.

The following is a timeline of events from around the time Due, 63, a 14-year veteran of Covington City Hall, was arrested to the time that Edelen will present his findings.

August 6 The city commission recognizes Due for being awarded the Certificate of Achievement of Excellence in Financial Reporting for the finance department and for his own honor of being given the Award of Financial Reporting Achievement from the Government Finance Officers Association of the United States and Canada.

August 23 News breaks that local police agencies are investigating alleged improprieties in the City of Covington finance department. A news conference is called. It is announced that Bob Due is the suspect and has been suspended on suspicion of stealing roughly $300,000 from the city coffers, dating back to 2007. By the time the ball is kicked off at the crosstown rival football game between Holmes and Holy Cross, news breaks that Due has been booked into the Kenton County Detention Center.

 photo bobduemugshot_zps59cf8377.jpg

Due's first mugshot

He is charged with theft by unlawful taking (over $10,000), unlawful access to a computer (first degree), official misconduct (first degree), criminal possession of a forged instrument (second degree) and is held on a $50,000 bond.

August 24 The River City News highlights the many examples in which Due was the bearer of bad financial news at Covington City Hall

August 26 Due bonds out of jail after pleading not guilty via video in a Kenton County courtroom. He is placed on home incarceration. The River City News learns and reports that Due's alleged theft may be larger and date back farther than originally announced.

August 27 At a special meeting scheduled prior to Due's arrest, the city commission votes to fire its finance director. City Manager Larry Klein suggests that a special task force be formed to look into Due's actions and to make recommendations on how to prevent similar activity in the future. "I cannot and will not tolerate the deception that has transpired. The public trust has been violated, and that is the highest crime that can be committed in government," Klein said at the time. It is also noted for the first time that Kentucky Auditor Adam Edelen would be asked to investigate.

The River City News reports that plans for the proposed task force are approved by a commission vote of 3-2. Commissioners Mildred Rains and Michelle Williams voted against it with Williams upset that members of the city administration and city commission would be part of the task force's advisory committee. Rains said a task force would be premature before details from an audit could be released.

The task force's leader would be former Kenton County Judge Douglas Stephens and would include a member of the audit committee, the finance director in Florence where a greater theft transpired a decade ago, a resident, and a former Covington finance director. Mayor Sherry Carran and Commissioner Steve Frank would also serve on the task force with support from Klein and Assistant City Manager and City Solicitor Frank Warnock serving as support staff along with Police Chief Spike Jones.

"I was shocked and confused and now I'm angry," said Warnock at the time. "I feel betrayed, like a good friend hit me below the belt when I wasn't looking."

August 28 A petition credited to Commissioner Rains implicates fellow commissioners and city staffers in Due's alleged crimes. "What was their involvement, if any, with Due's embezzlement?," asks the petition, designed to bring Auditor Edelen into the fold.

The petition, launched by a group dubbed Covington Citizens for Ethical and Transparent Government, would seek 100 signatures.

"The majority of the city commission, which is blindly supportive of the city manager, has refused to invite the state auditor to review the books, practices, and finances of the City of Covington, despite a call to do so by two commissioners - instead trying to whitewash the gross breach of trust with a "task force" made up of the city manager, assistant city manager, mayor, Commissioner (Steve) Frank, and others who failed to prevent, and possibly allowed, and condoned, the theft by Mr. Due," the petition read.

City Manager Klein had said the day before, in the presence of Rains, that the auditor's office was being engaged. A spokesperson at the auditor's office said any such petition would be meaningless in prompting a state examination.

August 29 Fewer than a dozen people show up to sign the petition during a rally at Goebel Park.

 photo petition2_zpsfd8e2378.jpg

Attendees at petition rally

August 29 Due attempts to kill himself by using carbon monoxide poisoning in the garage of his Independence home. He was taken to the St. Elizabeth Hospital psychiatric ward in Edgewood.

August 30 At a special meeting of the city audit committee, it is revealed that Due's alleged theft was likely closer to $600,000.

Later that day, the City of Covington announces a lawsuit against Due, his family, various banks, auditing firms, and others as an attempt to regain all the stolen funds.

September 4 Due is released from the hospital following his suicide attempt and faces a Kenton County judge. He is returned to home incarceration.

"I know your world has been turned upside down," Judge Douglas Grothaus said to Due. "Maybe the revelation of this has been one of the biggest reliefs of your life after carrying that guilt around."

"If you care about your family, I think you will continue with your mental health treatment and (abide by) court orders," the judge continued.

 photo dueincourt_zps4b1ca95b.jpg

Due appears in court

September 5 Auditor Adam Edelen announces that he will be launching a special examination of Covington's finances.

"We have to make sure these things don't happen in local government and that when they do, those responsible are held accountable," Edelen said. 

 photo edelendue_zps84f01df4.jpg

Edelen appears with Commonwealth's Attorney Rob Sanders and Mayor Sherry Carran

September 10 Former Kenton County Treasurer Ivan Frye is hired as interim finance director, though he had already been placed on the job without formal commission approval.

A second suicide attempt is reported at Due's Independence home, this time by multiple stab wounds. He is rushed to University of Cincinnati Medical Center.

September 11 The River City News reports that Commissioner Williams is upset about the order of events in which Frye was hired. Jerome Heist, a staffer in the finance department, had been promoted immediately after Due's firing but did not want to assume the interim position for any long period of time, it was said.

With Due, Heist, and now Frye, and eventually a permanent hire, "In a short period of time we will have had four people with their hands in the pot," Williams said.

September 12 The first special task force meeting ended with Williams and Commissioner Chuck Eilerman shouting at each other in the middle of Seventh Street.

Williams and Rains were apparently upset over not being permitted to sit at the table with the task force members and were instead seated with the public, as was Eilerman.

 photo IMG_0988_zpse0a29ae5.jpg

Judge Douglas Stephens

September 13 An email obtained by The River City News contradicts claims by Williams and Rains that they were not notified of Ivan Frye's hire as interim finance director

September 20 Due is ordered by a Hamilton County, Ohio Probate Court judge to remain in the hospital for further evaluation following his second suicide attempt.

September 27 Due returns to a Kenton County courtroom and this time is sent back to jail. The 63-year old talked about his attempts to kill himself.

"I was still in that state of feeling I was in the bottom of a black hole," Due said, calling it "self-denial". "This most recent stay allowed me to shed that cloak of of denial."

"I've come to accept what I've done and who I am. All the secrets and lies are out and now I can look to the future."

 photo dueincourt2_zpsb65156cb.jpg

Due (R) and attorney Tim Schneider face Judge Douglas Grothaus

October 29 State Senator Chris McDaniel (R-Taylor Mill) announces that he will pursue legislation preventing convicted embezzlers from collecting their government pensions.

November 14 Due is formally indicted by a Kenton County Grand Jury and it is revealed that the theft may be closer to $700,000 and date back to 2002.

Due was indicted on fifteen counts, including abuse of public trust over $100,000, theft by deception of over $10,000, unlawful access to a computer, and twelve counts of criminal possession of a forged instrument. He is ordered to remain in jail on a $500,000 cash bond.

December 2 Due pleads not guilty to all fifteen counts.

The City of Covington announces that it will hire an internal auditor.

December 13 Lisa Goetz is hired as Covington's next finance director and Ivan Frye leaves the position.\

January 16 In an exclusive interview with The River City News at his mother's Hebron home, Auditor Adam Edelen says the results of his office's examination will be "significant".

"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.

RCN Click Here to Subscribe Today!
RCN Click Here to Subscribe Today!