Ex-Manager Accused Of Conflict Audit Shows Former Corrections Worker Funneled Rental Contracts To Wife’s Business

A former project manager with the state Department of Corrections engaged in a conflict of interest when he funneled $642,000 worth of work to a company owned by his wife, an audit found.

A report released this week by state Auditor Brian Sonntag concluded that Joshua Kalebu, who supervised some small prison construction projects that involved the use of rented equipment, ignored state requirements to seek bids from vendors and instead rented equipment from his wife’s company.

The department found 19 payments over a two-year period, totaling $642,043.

Washington law prohibits state employees from benefiting from a contract under their supervision.

Kalebu resigned in October 1995, just before Corrections Department accountants discovered his connection with the company, Otter Equipment, and asked Sonntag to investigate.

The case has been forwarded to the attorney general and the Thurston County prosecutor, who will decide whether any criminal charges are warranted, as well as the Executive Ethics Board, which enforces state ethics laws and could issue a reprimand or impose a monetary penalty.

Corrections Secretary Chase Riveland said Kalebu and his wife, Alice Faye Yates, have disappeared. There is no phone listing for either in the Olympia area, and a search of a national telephone directory turned up nothing.

The audit concluded that Kalebu did not follow proper bidding procedures when he repeatedly rented backhoes, tractors and similar equipment from Otter Equipment, which was owned by Yates. Company documents listed Kalebu as Yates’ husband, according to auditors.

Riveland said the Corrections Department has changed some internal policies to add more oversight over project managers who approve purchases.

Kalebu, a civil engineer, worked for the Corrections Department for three years, earning an annual salary of $48,000.