Image: Montgomery County Attorney D.C. Jim Dozier, now a Professor of Criminal Justice at Sam Houston State University, wrote an opinion on January 8, 1986, making clear the County Auditor’s involvement in County government business, other than performing her specific statutory functions, would “be a clear violation of the separation of powers provision of the Texas Constitution.” Despite the unusual death – by appearing in front of a cement truck on Interstate 45 – of Precinct 3 Montgomery County Commissioner Weldon Locke and the numerous problems Montgomery County has suffered since 1986 with County Auditors deeply involved in policy, politics, and running the County government, the Montgomery County government has apparently never learned the lesson that the Auditor must, under the Texas Constitution, separate herself from involvement in running the County government.
Conroe, September 13 – When Chief Administrative District Judge Jennifer Robin raised the issue of “separation of powers” under the Texas Constitution, she absolutely struck the nail on the head of the precise reason the Montgomery County Board of District Judges should demote County Auditor Phyllis Martin and replace her with a Certified Public Accountant who will perform the County Auditor’s functions independently of the operations of the Montgomery County government. After decades of Constitutional violations, a tragic death by cement truck, taxpayer suffering financial mismanagement, and now the Auditor’s secret actions for years to lobby for the purchase of a $14.8 million software package – which the Davenport Ring also has pushed – the Board of District Judges has the opportunity to bring Montgomery County into the nineteenth, twentieth, and maybe even twenty-first centuries with respect to management and ethical practices.
Sex, suicide, scum
Things seemed to go well for Precinct 3 County Commissioner Weldon Locke at New Year’s in 1986. Locke had separated from his wife and left his children behind with her. Locke was living with Montgomery County Auditor Marilyn Thomason with whom he was in a relationship.
Rough circumstances quickly began to develop right after the first of the year when several Montgomery County employees discovered that Thomason, who was both the County government’s accountant-bookkeeper as well as the Auditor who audited her own books, had approved the payment of several claims and bills which Locke had submitted. Locke had previously requested that Thomason act as the grants administrator for the County government to assist Commissioner Locke with some grants he sought for south Montgomery County. In the alternative, Thomason had proposed having a County employee in her office serve as the financial advisor and project director for the implementation of the grant funds. (If that sounds familiar with current County Auditor Phyllis Martin’s plan to act as the “project lead” or have an employee in her office act as the “project lead” for the $15 million Enterprise Resource Planning software implementation, then you’re already on the right track.)
Numerous County employees had complained to Montgomery County Attorney D.C. Jim Dozier, who had previously worked as an Assistant District Attorney before his Countywide election in 1984 and as a police officer prior to when he went to law school.
On January 8, 1986, County Attorney Dozier unleashed a legal memorandum, which many referred to as a “bombshell,” in which Dozier severely criticized the violation of the separation of powers set forth in the Texas Constitution between the judicial branch of government and the executive branch. Even as long ago as 1986, Texas law required county auditors to act as a member of the judicial branch as they worked for the County’s district judges and were solely answerable to them. County Auditors were not to act as part of the policy and politics in the executive branch of local governments, such as the Commissioners Court or with Department Heads.
Dozier wrote a 10-page document which he entitled “Duties of and Limitation Upon the County Auditor.” A full copy of Dozier’s memorandum is a link at the end of this article, along with a photograph of the first page of the memorandum at the bottom of this article as well.
“The Auditor shall have a general oversight of all the books and records of all the officers of the county…,” wrote Dozier, citing a statute which is now found in Section 112.006(a) of the Texas Local Government Code. In fact, Texas law makes clear that, as a member of the judicial branch of government, the County Auditor “shall see to the strict enforcement of the law governing county finances.” That’s in Section 112.006(b) of the Texas Local Government Code.
Auditors definitely are not part of the policy or political part of local governments under Texas law. For example, the fact that County Auditor Phyllis Martin sits at the dais with the Montgomery County Commissioners Court members during their meetings is a clear violation of the law. That she engages in policy discussions, such as making proposals to them how to allocate road bond funds (August 28, 2018) or whether to spend $14.8 million on an Enterprise Resource Planning system that goes far beyond any sort of accounting application (August 14, 2018) clearly violates the Auditor’s duty to respect the separation of powers between the executive and judicial branches of Texas government.
As Auditor, Phyllis Martin is a member of the judicial branch and very much an officer responsible for “strict enforcement of the law.”
In his 1986 memorandum, Dozier made clear that the Auditor should review claims and bills of account and certify to the Commissioners Court that they are proper for payment and that she shall “keep an oversight…that the expenses of any department do not exceed said budget appropriations.” The current version of those statutes is Section 113.064 of the Texas Local Government Code. Since the Auditor is a law enforcement officer under the Texas Constitution and Texas law, she may “administer oaths” and require affidavits from County officers before she certifies the correctness of invoices or claims, as the same section of Texas law makes clear.
Therefore, Dozier summarized Texas law and the position of the Office of the Montgomery County Attorney:
“The role of the Auditor, then, as it was originally conceived, and as it still exists under the law, is one somewhat removed from the everyday workings of county government…An Auditor who is involved in the everyday workings of government cannot properly function as part of a system of checks and balances. In the capacity of paying bills for the County [specifically referring to Montgomery County], the Auditor is asked to perform a particular task and, as Auditor, to maintain oversight of the same task. In essence, then, the Auditor is required to audit himself, and this puts him in an untenable position.”
As a result of County Attorney Dozier’s Memorandum, Martha Gustavsen who served as County Treasurer from January, 1987, through 2013 when she retired, took over the County’s payroll from the County Auditor. The County Auditor refused to give up accounts payable in order to maintain political control over the Commissioners Court and other elected officials.
The Dozier Memorandum went through the Montgomery County government and Conroe, as the County seat, like a shockwave. Locke’s wife divorced him on April 22, 1986. Thomason soon lost her job as County Auditor.
On May 8, 1986, Locke “appeared” in front of a cement truck on Interstate 45 just south of the line between Montgomery and Harris Counties and died instantly.
Aftermath of Locke’s death and the County Auditor’s firing
On June 5, 1986, Dozier, as County Attorney, filed an application to open a probate administration of Locke’s estate, so that he could “make a claim in the name and in behalf of the taxpayers of Montgomery County, Texas, for the repayment of certain monies misappropriated by deceased [Commissioner Locke] in his former capacity as County Commissioner, Precinct 3, of Montgomery County, Texas…[because] applicant justly fears that, unless action is taken immediately for the preservation of the assets of the estate of deceased, such assets will be dissipated.”
Sure enough, a few months later, a Conroe attorney, Patrick Green, filed another application with the Montgomery County probate court and claimed that Locke died with only $66 in the form of eight (8) $2 bills and a $50 United States savings bond, as well as some jewelry.
In 1986, after the all of the carnage related to Locke’s alleged defalcations and the wrongdoing by the County Auditor, who was far too involved political and socially with the County Commissioners Court, the Commissioners Court appointed a new County Auditor by the name of Linda Breazeale.
Commissioners Court continued to ignore the law as new County Auditor Breazeale continued in a policy role
Linda Breazeale continued Thomason’s tradition of violating the separation of powers of an auditor and judicial officer and reaching into participation in the “everyday workings of the County government,” which Dozier had specifically admonished she should not do.
During Breazeale’s tenure as Auditor from 1986 to 2007, she was far more powerful than Thomason and essentially ran all aspects of the Montgomery County government. In 2007, Breazeale “retired” but within a few days the Commissioners Court hired her as a “consultant” to oversee the finances of the Joe Corley Correctional Facility and the Montgomery County Mental Health Facility.
Breazeale made over $200,000 per year as a “consultant” between 2007 and 2012. She looked the other way when she and then Precinct 3 County Commissioner Ed Chance made side deals with Alliance Construction, the contractor on the Corley Correctional Facility.
As this newspaper has previously reported, in 2013, County Attorney J.D. Lambright sent demand letters to Chance and to Breazeale for financial wrongdoing. A few days later, however, on the motion of Precinct 1 County Commissioner Mike Meador and then Precinct 2 County Commissioner Craig Doyal, the Commissioners Court directed Lambright to stop all action to collect funds from Chance and Breazeale.
Breazeale and Chance walked away from the very questionable transactions without any financial or legal recriminations.
2007: new County Auditor Phyllis Martin, Breazeale’s “understudy”
Breazeale felt comfortable leaving the formal title of County Auditor behind, because she had carefully groomed an “understudy,” as the “Sage,” Bill O’Sullivan, refers to her. The understudy who looked the other way when all of the improper financial transactions about which Lambright complained in his demand latter was none other than current Montgomery County Auditor Phyllis Martin.
Martin has had a terrible track record. During Martin’s 11 years as County Auditor:
- Martin continued to violate Generally Accepted Auditing Standards by continuing to audit financial accounts she had prepared and never advised the Commissioners Court that they should, ethically, transfer the accounting function to another County Department;
- Martin, as Chief Budget Officer, never engaged in zero-based budgeting but only utilized baseline budgeting where she failed ever to evaluate department performance in comparison to specific expenses;
- Martin allowed the mismanagement of the Corley Facility and the Mental Health Facility to occur right under her nose;
- Martin directly violated Section 111.090 of the Texas Local Government Code by proffering hundreds of illegal budget amendments that did not meet the criteria of the Section of law, so that she could assist Precinct 1 County Commissioner Mike Meador and other members of the Commissioners Court draw tens of millions of dollars “off-budget” into their accounts, without following the public hearing requirements for budget changes of that nature;
- Refused members of the Commissioners Court information while working closely with others;
- Refused to comply with the Texas Open Records Act/Texas Public Information Act, or Rule 12 of the Rules of Judicial Administration, with respect to the requested budgets of County Departments, thereby forcing the Montgomery County Attorney’s Office to make individual arrangements with 79 County Departments to provide their requested budgets in response to one public information request;
- Handled accounts payable for some politicians consistently with lightning speed while slow-paying vendors of elected officials she doesn’t like as much;
- When the Commissioners Court deferred purchase of the gigantically-expensive Enterprise Resource Planning (ERP) software at the recommendation of Purchasing Director Gilbert Jalomo, both Jalomo and County Judge Craig Doyal caught mighty Hades from Martin and the County Treasurer in a secret meeting in Doyal’s office immediately after the Commissioners Court meeting on August 14. Davenport and Martin expressed their fury towards Jalomo and Precinct 3 County Commissioner James Noack, who has expressed concerns about the cost and necessity of the ERP software as opposed merely to purchasing a less expensive accounting software, such as the most advanced version of Quickbooks.
- On August 28, Martin suggested to and then debated with the members of the County Commissioners Court how they should allocate funds available under the 2015 road bonds;
- Engaged in public relations and advertising for the County government in the form of a “Popular Annual Financial Report.” While some other County Auditors provide such reports, they tend to be shortened financial statements without political statements such as the following which appear in Martin’s report:
- “The voters are the driving force for everything that we do in Montgomery County. For this reason, we like to include our citizens in all aspects of County business. From having open door policies with department heads to being able to speak at our Commissioner Court meetings, we love hearing from the people.”
- “Montgomery County has had a long standing of putting its citizens first when it comes to public safety.”
- “We now have a more robust policy force, as well as increased Fire Marshal cooperation efforts.”
- “Our newly organized permits department can now help with construction, mass gathering, code, storm water, fire, septic and food establishment permits all at the same convenient location.”
- Speaking about her sister, “…our Elections Adminstration department is consistently working to make sure voters in the county know where to vote and how to register.”
- “Parks, nature centers, and war memorials maintained by the county are a way for all to relax and enjoy all the natural wooded beauty we have to offer.”
- “…you will always find something at the library to better yourself and your community.”
- Clearly rather than acting as a judicial officer auditing County expenditures, the County Auditor has become an advocate for those expenditures. It’s important to note that the Harris County Auditor, Michael Post, a Certified Public Accountant, has issued a “Popular Annual Financial Report” which contains none of those advertising or public relations types of statements but is merely a summary of the County’s finances.
- At an August 31, 2018, meeting of the Board of District Judges, Martin answered numerous questions about a proposed employee she wanted in her County Auditor’s Department. Martin asked whether she should allow Precinct 3 County Commissioner James Noack to be involved in interviewing the proposed employee whom Martin characterized as helping with the County Auditor’s access to databases. Martin failed to disclose to the Board of District Judges that Noack wanted to be involved with the interview of that employee specifically because that person would be the “project lead” on the entire implementation of the ERP with all 79 (now 80) County Departments. It’s troubling that Martin approached the Board of District Judges with such lack of candor. It’s also troubling that Martin and her staff intend to become deeply involved in the everyday workings of the County government in the most intrusive manner through the implementation and project lead of the ERP system.
Warnings to Martin during the past two years that she isn’t do her job the right way
During the past two years, County Auditor Martin certainly has received ample warnings about her failure to act with independence and as a judicial officer rather than as “one of the guys” inside the body politic of the County government.
On December 1, 2016, the Publisher of The Golden Hammer provided a detailed report of the violations of the ethics and of Generally Accepted Auditing Standards of the United States Government Accountability Office.
In February, 2017, the Publisher and Bill O’Sullivan appeared before a Montgomery County Grand Jury to request that they order an audit of County Finances pursuant to Section 115.033. The Grand Jury did, in fact, request that the Honorable Patty Maginnis appoint a Committee on Finance to perform an audit of the County’s books and records. The Grand Jury and Judge Maginnis found that such an audit was necessary and advisable.
The Committee on Finance never completed its task.
Now, almost two years later, Montgomery County has still never had an audit from an independent auditor, either internal or external, an incredible circumstance for an operation expending nearly half a billion dollars per year of taxpayer funds. Montgomery County’s government is rife with conflicts of interest, nepotism problems, and ethics issues that impact County finances. Obviously when an untrained son, with welding in his background, receives $98,000 per year working as the HVAC/Controls Manager for his father who is the head of the Building Maintenance Department, there’s a problem. When the daughter of a favored employee of a County Commissioner receives $60,000 per year managing the choice of light bulbs in County buildings, there’s a problem. When a Justice of the Peace directly supervises his girlfriend as his Juvenile Coordinator and when she only works part-time hours for a full-time job, there’s a problem.
Auditors, as law enforcement officers, should catch such problems and report them in their financial reports, as the GAO’s Yellow Book makes very clear.
On August 3, 2018, the independent accounting firm of Postlethwaite & Netterville issued the External Quality Assessment and noted that Martin only “partially conformed” to the IIA International Standards for the Professional Practice of Internal Auditing.
All of Montgomery County received the stern warning of Dozier in 1986. The Golden Hammer has confirmed that County Treasurer Martha Gustavsen and others within the Montgomery County government have complained about the lack of independence and the everyday involvement in government operations of County Auditor Phyllis Martin for many years.
What should happen here
Montgomery County is the largest County in Texas without a Certified Public Accountant as the County Auditor. In fact, Montgomery County does not even have any CPA inside of the County Auditor’s Department as an employee.
A Certified Public Accountant would certainly understand the significance of the independence of the County Auditor’s position and her judicial function as a law enforcement officer. A Certified Public Accountant would understand the importance of the separation of powers doctrine with respect to the functions of the County Auditor separate and apart from the “everyday workings” of the County government.
Martin has received warning after warning. The County government has received warning after warning for at least 32 years, in addition to the clear statutory admonishments.
The Board of District Judges should demote Phyllis Martin to an assistant position and bring in a CPA who will follow the admonishments of Dozier and of the current Board of District Judges, as well as current Texas law.
The Golden Hammer thanks three current County employees and two former County employees who kindly contributed information for this article.
Dozier’s full Memorandum is available here: