State Auditor Blasts Coffman’s Office

Employee conflicts of interest are only one of eight serious failures outlined in audit report.The Colorado State Auditor issued a blistering report on the management of the state Secretary of State’s office under Mike Coffman. The report found eight major areas of failures in the office, including duplicate voter registration records, voting by dead people and felons, failing to account for $445,000 in federal funds, and numerous conflict-of-interest violations among employees, at least some of which Coffman was aware of, the report says.

The most widely covered of these conflicts of interest has been the allegation that employee Dan Kopelman had used state voter data in an outside business, a political consulting website Political Live Wire, which serves primarily Republicans. The report found that while Kopelman probably violated state conflict-of-interest standards, he apparently didn’t make money from the state data.

The issue has been reported by Colorado Confidential in depth over the past several months.

The audit report was requested by the watchdog group Colorado Ethics Watch. Chantell Taylor, director of Ethics Watch, said in a release:

“As we expected, the auditor found that Dan Kopelman violated state law by operating a partisan political side business while employed with the secretary of state’s office. But more significantly, the auditor’s report agreed with Ethics Watch that Secretary Coffman shares responsibility for these violations. Sec. Coffman was aware that employees had outside businesses and did nothing.

“Although Sec. Coffman attempted to address the issue after the fact by adopting an internal policy regarding partisan activities of employees, the auditor’s office said his policy was inadequate to correct the problem. Based on these findings, Sec. Coffman needs to be held accountable for his violations of state law. We urge District Attorney Mitch Morrissey to now pick up where the auditor left off.”

The audit report said about the Kopelman affair:

“One employee appears to have violated state statute and State Personnel Board Rules related to conflicts of interest and outside employment. We also identified four other employees of the Department who did not receive advance written approval prior to engaging in outside employment/business ownership as required by State Personnel Board Rules. The Secretary of State, as the appointing authority, shares responsibility for these apparent violations and should adopt a more proactive approach to addressing outside employment and conflicts of interest relative to Department employees.

The auditor in fact found five instances in the office of violations of the personnel board rules. The report says that Coffman apparently knew about Kopelman’s violations – and that of one other still unidentified employee – but did nothing about it. “It appears that management was aware, in at least two of the five instances discussed above, that the employees had outside businesses. However, management did not initiate or verify proper disclosure or approval,” the report says.

Under state rules, a state employee is not allowed to have an outside business that conflicts with his or her official duties. They can engage in outside businesses that don’t conflict with state duties, but they need advance written approval from the agency they work for.

Ethics Watch’s Taylor says, “Coffman has been completely mismanaging the most basic functions of his office. Coffman knew at least two of the five individuals were engaged in outside businesses. We think he actually enabled Kopelman to engage in the business. We have documents showing that Coffman was actually referring people to Political Live Wire using his Secretary of State address.”

The Secretary of State’s office agreed with the auditor’s conclusion, saying:

“We agree that management needs to be more proactive in assuring that the employees of the Department comply with state personnel rules regarding outside employment. A new procedure has been instituted to guarantee that all employees are not only given the outside employment and business ownership disclosure form at their `new hire orientation’ on their first day of employment, but that they will also be required, along with current employees, to complete the form during subsequent interim and final performance evaluations.”

Significantly, though, the auditor did not find that Kopelman profited from the use of state data. The report found:

“We reviewed the private business records, personal and business emails, and other documentation related to the employee’s outside business for the period from when employment began in January 2007 through May 2007. We found no evidence that the business benefited financially from the individual’s employment with the Colorado Department of State.”

The auditor did find, however, that the way the computer system was managed left it vulnerable to abuse. They found unauthorized access to the secretary of state’s computer system and the use of personal laptop computers by users of that system. Use of laptops on the system can make it vulnerable to viruses and unlawful access.

Under the Help America Vote Act (HAVA), the state is required to provide matching funds totaling $1.37 million in order to qualify for as much as $41.6 million in federal funds. The Secretary of State has so far failed to provide $445,000 of the state match, the report says, or nearly one-third of the required amount. In addition, the Coffman’s office apparently miscalculated the amount of the match necessary to meet the requirement.

The report says:

“Most significantly, we found that the Department has not yet deposited the entire State match into the State’s Federal Elections Assistance Fund. We are concerned that failure to deposit the approximately $445,000 balance of the match could result in the State having to repay HAVA monies to the federal government. Additionally, the Department needs to correct the miscalculated match amount and ensure that the sources of the matching funds are clearly documented and reported to federal and state officials.”

In all, the state auditor recommended eight changes in the management of the Secretary of State’s office covering a wide range of issues, from strengthening oversight of the use of voter registration lists to ensuring that voter registration drives “are conducted in the public interest and in accordance with applicable laws and rules.”

The report also found a host of mismanagement in the voter lists:

• There were 3,533 people who were registered to vote twice for the November 2006 general election. Seven actually cast two ballots. The secretary of state’s office failed to purge 340 of these duplicates as late as February 2007;
• 401 felons were listed on the 2006 voter registration master lists, and 84 percent of them were still on the list in February 2007;
• And of the 805 dead people registered to vote in 2006, 380 were still registered in February 2007.

The Secretary of State’s office formally agreed with all eight conclusions, and plans to implement changes to procedures to address the problems. Several calls to the Secretary of State’s office requesting comments were not returned.

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