Stevens County Prosecutor Tim Rasmussen is seeking to hold the county commissioners personally liable for allegedly misspending more than $121,000 from a public fund dedicated to fighting homelessness.
With help from a specially appointed deputy prosecutor, Rasmussen started two lawsuits against the commissioners following a February report by the state auditor’s office, which found they had made an “unallowable gift of public funds.”
The sum in dispute includes more than $30,000 that went to a couple whose home was damaged by historic flooding last year, and nearly $91,000 that two nonprofits used to build a transitional home for people with spinal cord injuries.
The commissioners – Republicans Steve Parker, Wes McCart and Don Dashiell – have contested the auditors’ conclusion that the payments were improper.
Rasmussen is seeking to recover the commissioners’ public official bonds – a type of insurance policy that pays governments up to a fixed amount when an official fails to “faithfully perform” his or her duties. According to the lawsuits, Travelers Insurance and the United States Fire Insurance Co. have issued a total of five bonds for the commissioners, each valued at $20,000.
Those bonds would not cover the full amount in dispute, so Rasmussen is seeking to recoup the difference from the commissioners’ personal finances, plus interest and attorney fees.
“The commissioners have characterized my actions as political. That is nonsense,” Rasmussen said in an email. “I have an obligation under the law to hold accountable anyone who harms Stevens County or its citizens, no matter who they are or the position they hold.”
Spokane County Superior Court Judge Maryann Moreno, who has visited Stevens County to hear the cases, has yet to rule on the legality of the payments from Stevens County’s homelessness fund.
But in late May, Moreno denied the commissioners’ request to have the public foot the bill for their legal defense, saying Rasmussen did not have a duty to appoint special counsel for them.
“You can’t expect the victims of your crime to pay for your defense,” Rasmussen said.
Attorney Jerry Moberg, a former Grant County Superior Court judge who’s representing the commissioners, said they might still qualify for representation at taxpayer expense under a different statute. In his opinion, the commissioners were acting in their official capacities when they approved the payments from the homelessness fund.
Moberg also said he did not believe the payments were improper, and he characterized the state auditors’ report as “equivocal.”
“To me, as I read the report, it was simply the auditors speculating that it might be an unallowable gift,” Moberg said.
The homelessness fund consists of surcharges that people pay when they record documents such as property deeds. State law requires counties to collect those fees and maintain homelessness funds to pay for services such as shelters and low-income housing programs. Use of those funds is restricted by state law and each county’s 10-year homelessness plan.
In a public meeting in August, the commissioners approved a payment of $30,128 to reimburse Joseph and Alena Boharski for the cost of moving their house onto a new foundation on their property north of Kettle Falls. A few months earlier, the Kettle River had overflowed with rain and snowmelt, eroding the shoreline and sweeping away the couple’s front porch.
Rasmussen raised questions about that payment in September during a contentious local election season. He sent letters to the state auditor’s office and the Washington State Patrol, asking for investigations and noting that misuse of public funds can amount to a felony.
The commissioners argued the Boharskis were at risk of becoming homeless because the flooding made their house unsafe to occupy and they did not have insurance for such an event.
The auditors, however, agreed with Rasmussen that the payment was inappropriate.
“Because the homeless housing plan only allows for minor repairs and alterations for single-family, owner-occupied housing, the owner’s request did not fall within the plan’s allowed activities and therefore constitutes an unallowable gift of public funds,” their report states.
The other payments totaling $90,893 went to the Colville affiliate of Habitat for Humanity and another nonprofit, Casey McKern’s Pay It Forward, named for a Kettle Falls man who was left paralyzed below the neck after a diving accident in 2008.
According to Rasmussen’s lawsuits, the two organizations used the money build a house described as a “bed-and-breakfast/layover/vacation house” for people with spinal cord injuries, and the commissioners “did not require the funds to be used to reduce homelessness in Stevens County.”
In the middle of the building process, Habitat for Humanity “withdrew from the project for multiple reasons, including excessive expenditures by the (Casey McKern) Foundation and breaches of the parties’ agreement,” the lawsuits state.
The auditor’s office determined the payments to the two organizations constituted an “unallowable use” of “restricted funds” because nonprofits don’t meet the definition of “poor and infirm” under the state constitution.
“The state auditor has determined the commissioners made unallowable gifts of public funds to benefit private citizens,” Rasmussen said in his email. “My duty is to try and recover the funds and hold them accountable for this breach of the public trust.”
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