Palmertree’s accounting irregularities a decade old

Published 12:10 pm Tuesday, April 15, 2014


Shelly Ashley-Palmertree

Shelly Ashley-Palmertree

JACKSON — The question of who was supposed to start hammering out a resolution to obvious accounting problems in the Warren County Circuit Clerk’s Office in the early 2000s dominated Monday’s restarted testimony in the civil case involving Shelly Ashley-Palmertree and more than a half-million dollars in questioned income and payments.

A meeting with then-state auditor Phil Bryant during Palmertree’s first term as clerk concerning expenses and payments questioned on state audits was “terse, cold, direct and brief,” said District 5 Supervisor Richard George, who took the stand before Hinds County Chancellor Dewayne Thomas.

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“Mr. Bryant just wanted this done and over with,” George said in response to questions from Palmertree attorney Frank Vollor. “There was a brief statement, then out the door he went.”

At one point, Vollor asked George whether he agreed with County Administrator John Smith’s testimony in December — before the case was sent to mediation — that confusion existed between the county board and the state auditor’s office on how to prevent documented issues with accounting during her father’s term in office from continuing during Palmertree’s tenure.

“I didn’t hear the comment or the context it was mentioned in,” said George, who was not subpoenaed for the case’s initial court dates.

At issue in the civil case, which Palmertree filed 13 months ago against Warren County and State Auditor Stacey Pickering, is whether she owes the county $671,751.75 in excessive salary above the state-set cap for circuit and chancery clerks and questionable subcontractor payments to her father and predecessor in office, Larry Ashley. The state and county countersued last April and contend the payments were improper.

Court-ordered mediation talks ordered after three days of testimony in December broke down in January. Additional testimony in the case was scheduled today and Thursday.

The state and county’s countersuit also included CNA Surety, the parent of Western Surety Company, which insures most county officials and had bonded Palmertree during her first 8 1⁄2 years in office.

CNA attorney Ron Yarborough grilled George on whether it was “rational” for the board to have not alerted the bonding company to problems with accounting procedures in the clerk’s office. Issues with payments above the state-set salary cap for circuit clerks and with payments to subcontractors have been noted in one form or another on each official county audit since 2003.

Yarborough continued the line of questioning despite the entry into the record of a 2006 letter from the state auditor’s investigative division to Western Surety that appeared to inform the company of issues with the previous year’s audit of Palmertree’s office.

“If there’s something lurking out there, some trip hazard or someone trying to steal your car, you’d want someone to tell you about it, right?” Yarborough asked at one point, pointing in the direction of the courtroom doors.

“If I’m being paid to take care of myself, then I don’t need ‘em,” George replied.

Former chancery clerk Dot McGee testified for about 45 minutes before Thomas recessed court for the day. Part of Palmertree’s original suit said old debts held by her father could offset her own, a notion attorneys for the state have said in briefs is moot due to Larry’s issues being settled in 2012.

Vollor asked McGee whether she was aware of the circuit clerk’s office’s issues noted on official county audits, done by contract firms in most of the state’s counties.

“I had heard that, but I had no personal knowledge,” McGee said when asked about any old debts by Larry Ashley’s office.

In a separate criminal case, Palmertree is accused of inappropriately transferring funds from her office’s criminal and civil accounts to her personal account. The amounts total $12,000. Jackson attorney Joe Hollaman represents her in that case. Attorney General Jim Hood is prosecuting it.

Hollaman appeared in court Monday to ask Thomas to allow Palmertree to invoke her Fifth Amendment rights for the duration of the civil trial. Thomas declined the request, citing the chancery court’s findings earlier that she wouldn’t do so. Palmertree testified under oath in the case in December, after the first criminal indictment against her had been dropped due to a clerical error. A second indictment was handed down January 22 by a Warren County grand jury.