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Our View: Schmack disappoints on coffee fund

Published: Wednesday, June 26, 2013 5:30 a.m. CDT

It was clear that new DeKalb County State’s Attorney Richard Schmack wanted nothing to do with prosecuting the “coffee fund” cases brought by his predecessor.

But even if former State’s Attorney Clay Campbell was too aggressive in bringing felony charges against nine Northern Illinois University employees in the case, Schmack’s efforts to minimize the importance of the matter are more disappointing.

The case involved employees selling state-owned materials at a local scrap yard, then depositing the proceeds in an off-the-books bank account called the coffee fund. Records from the DeKalb Iron and Metal Co. showed the fund accumulated $13,000 since 2005. It held $2,187 when NIU closed it in August, officials said.

NIU officials said they had no idea the account existed at the time it was uncovered. They later said it was used for retirement parties and other purposes.

After an investigation by NIU police, Campbell’s office filed felony charges against nine people, most of them in connection with the fund. Under Schmack’s watch, charges were dismissed against six of those charged. Three supervisors – Robert Albanese, a former vice president, Lawrence Murray, the manager of property control, and Kenneth Pugh, the director of materials management – accepted misdemeanor plea agreements for violating the State Property Control Act.

All but Albanese, who resigned almost a year ago under investigation for misconduct, have returned to their jobs or are expected to soon. They were on paid leave while they were absent from work.

“It became clear to us that the materials management ‘coffee fund’ was used entirely for activities which are routinely paid for out of public funds at many other departments at NIU,” Schmack wrote in a release last week. “This money was indeed diverted, but it was diverted from one of the state’s pockets into another of the state’s pockets, when regulations said it should have gone instead into a third state pocket.”

In other words: Just because people were taking state property and using it for their own purposes, it’s really OK because those purposes were office functions.

Never mind that the NIU accounting office had no idea that the fund existed, or that people in charge of this should have known that they couldn’t use state property in this way. If they needed to have office parties, that money ought to come from their department budget – or better yet, their own wallets – rather than relying on the sale of state property.

“It is also not criminally wrong for an NIU department to maintain its own bank account, although it is certainly not a good accounting practice,” Schmack wrote.

In fact, some might say that it’s a deceptive accounting practice that conceals what you’re doing with proceeds from recycling state property – money that by law is supposed to be returned to the state.

We wouldn’t expect that kind of statement from Schmack, though. If the opening months of his tenure are any indication, those looking for allies in ensuring good government in DeKalb County should look elsewhere.

In December, Schmack told DeKalb County Board members they could “stand at ease” during a public meeting to have private discussions that weren’t called for on the agenda. After more than a week of reflection, he offered the excuse that they were spontaneous “party caucuses.”

With the closing of the coffee fund cases, Schmack offers lines about “state pockets” and “not good accounting practices” while sounding more like a defense lawyer than a prosecutor. Schmack’s attitude seems to be that secrets and mismanagement are OK in government as long as you use enough words to lawyer them away. He’s wrong.

With the state of Illinois facing billions in unpaid bills and a pension funding crisis to boot, it’s hardly a good time to take pains to explain away this classic example of government waste.

But with Schmack now in charge, the cases have been quietly settled. It’s almost as though they never happened. Only they did happen, and after the final result, there’s precious little to dissuade others from doing the same.

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