KARE 11 Investigates: Delayed investigation of double-billing

KARE 11's continuing investigation into overcharging on police car contracts finds that the Minnesota state patrol failed to act when a whistle blower says he raised red flags years ago.

Missed warnings, years of delay and taxpayers not getting what they paid for. KARE 11’s continuing investigation into overcharging on police car contracts finds the Minnesota State Patrol failed to follow up after a whistleblower said he raised red flags years ago.

Records obtained by KARE 11 show investigators with the State Patrol’s Vehicle Crimes Unit were warned about, but did not initiate an investigation of, double-billing that may have cost Minnesota taxpayers nearly three-quarters of a million dollars.

In April, a KARE 11 investigation detailed how local police and sheriff’s agencies across the state were double-billed for vehicle options that were already included in the master state contract.

It was not the first, or even second time, Nelson Auto Center of Fergus Falls was caught overcharging law enforcement agencies for options on their squad cars.

Bruce Gordon, the Director of Communications for the Minnesota Department of Public Safety, tells KARE 11 that in 2013, the State Patrol discovered internally that they had been overcharged tens of thousands of dollars for spot lamps on about 200 of their own patrol cars.

They demanded a refund of Nelson Auto at that time and received a check for about $35,000.

Fast forward two years, to 2015, and the police car rip-off again landed on the State Patrol’s radar.

Steve Kleiber, the same whistleblower whose tip launched KARE 11’s investigation, says he took his findings to them but was ignored.

“My frustration level was pretty high, because I took it to the people who I thought should deal with it and address the problem,” said Kleiber who added, “And basically nothing has happened.”

There are competing versions of that meeting and the focus of Kleiber’s tip to State Patrol.

In response to KARE 11’s request for information, DPS’s Gordon issued this statement about that meeting between Kleiber and state investigators:

“He contacted the State Patrol in March 2015 and indicated that the agency was being overbilled on squad car purchases. State Patrol investigators then met with him. He had documents that showed options that could be ordered for squad cars.

The focus of the meeting was the purchase of State Patrol squads. He did not mention or provide documentation about other law enforcement agencies, nor did he allege this activity was happening on a larger scale. After re-checking invoices from 2015, it was determined that the State Patrol had not been overbilled for its squad cars that year.

As previously mentioned, the State Patrol caught the issue internally in 2013 and was fully and promptly reimbursed.

If any actionable information had been presented at the meeting or if he had responded to requests for additional information, the State Patrol would have conducted an investigation at that time.”

Kleiber maintains he took the State Patrol the same information he presented to KARE 11 – records showing St. Paul Police had been overcharged on patrol car options.

“Brought them about 100, 125 pages of stuff,” said Kleiber. “They made copies of it, explained it to them, showed them what was going on, and never really heard back from them.”

When KARE 11 filed a public records request with State Patrol for their records of that meeting with Kleiber, they claimed no one at the meeting kept any notes, filed any reports, or afterwards sent any emails.

However, they did provide a series of internal emails sent between investigators following Kleiber’s initial phone tip, but before they met with him.

One officer writes to another discussing Kleiber’s tip and the upcoming in-person meeting:

“It could be an interesting case. May be just a theft by swindle, but it involves the dealer who holds the state contract for vehicles—not just our vehicles, but many other divisions.” 

Another email reads “…it could be nothing or it could be something substantial. He mentioned approximately 3,000 vehicles sold under the contract in recent years. I am assuming not every purchase was suspicious, but checking each purchase could take some time.”

Another officer seems dubious, writing, “My guess is it will be like finding a needle in a haystack, but hopefully he can tell us who to look at and where it is documented in the paperwork.”

Kleiber maintains that is exactly what he did, to no avail.

In March, 2017, Kleiber reached out to KARE 11, saying he knew taxpayers were being taken advantage of and it was eating at him because no one would listen.

“It is not right,” he said. “I don’t think the taxpayers should be paying more money and having to pay for things that they’re not receiving.”

To verify Kleiber’s tip, KARE 11 reviewed the purchasing records of 20 different police and sheriff’s departments and discovered examples of double-billing at every one of them.

When KARE 11 exposed the double-billing to local police departments in Woodbury and Maplewood, they reached out to State Patrol and the BCA, which have since launched an active and ongoing criminal investigation.

Nelson Auto did an internal review and estimates their overcharges on recent contracts could total $700,000.

The dealership has promised refunds and has said it has fired the manager they claim was responsible.

Minnesota’s Office of the Legislative Auditor has also launched an inquiry into the matter and is reviewing the state’s entire police car purchasing system.

ORIGINAL INVESTIGATION: KARE 11 Investigates: Double-billing investigation expands

© 2017 KARE-TV


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