Missouri Auditor Nicole Galloway Archives

Galloway and Hawley blast each other over attorney general closeout audit

February 7, 2020 By Brian Hauswirth

Missouri’s Democratic state auditor and the former GOP attorney general are blasting each other over a closeout audit that was released Thursday afternoon in Jefferson City.

Missouri Auditor Nicole Galloway (D) briefs Capitol reporters about the Hawley closeout audit on February 6, 2020 in Jefferson City (photo courtesy of Auditor Galloway’s Twitter page)

The closeout audit of former Attorney General Josh Hawley’s (R) office found that consultants paid with Hawley state campaign funds interacted with and advised Attorney General office staff. The review said while coordination between campaign consultants and staff gave an appearance of impropriety, there are no clear violations of law.

The audit also found that former Attorney General Hawley used a state vehicle and state employee as a driver/security detail for some trips where the business purpose wasn’t documented.

State Auditor Nicole Galloway (D) released the audit in her Statehouse office, which was packed with reporters. A stage was set up, to accommodate additional television crews that covered the briefing.

Mr. Hawley served as attorney general from January 2017 to January 2019, when he resigned after his U.S. Senate election. In a series of January tweets, Hawley accused Galloway’s office of using partisan Democratic staff. Galloway addressed the issue, with the Capitol Press Corps on Thursday.

“The unfair attacks by Senator Hawley were an attempt to deceive taxpayers about the nature of this audit,” Galloway says.

In his audit response, Hawley says Galloway audit team member Bobby Showers donated to then U.S. Sen. Claire McCaskill’s (D) 2018 campaign and wrote recently that any senator who opposes removing President Trump from office “will go down in history as not fulfilling their oath to their country.”

Showers, who was overseeing the closeout audit of Hawley, was removed from that audit in January, due to what Galloway audit director Jon Halwes described as “the appearance of bias.” Halwes also testified that he had not found any indication of actual bias in the audit, when reviewing it.

Halwes testified on January 29, before the Missouri House Special Committee on Government Oversight, which held a hearing on the issue.

During Thursday’s press conference, Auditor Galloway reiterated what Halwes said, adding Showers simply had a different political opinion than Hawley.

During his January tweets, Hawley mentioned Showers and others. Galloway accuses Hawley of launching misinformation ahead of the audit’s release, knowing that she couldn’t respond until the audit was formally released.

“The abuse these dedicated employees and licensed CPA’s (certified public accountants) had to endure is unacceptable,” Galloway tells Capitol reporters.

Galloway says her staff members performed the audit in adherence to professional audit standards. She also says her office experienced “roadblocks and threats” from current Attorney General Eric Schmitt’s (R) office. Schmitt’s office responded by saying the auditor’s claims “are ridiculous and unfounded.”

Galloway says Schmitt’s office challenged her authority to perform the closeout audit.

Hawley accuses Galloway’s office of altering the audit, to make it more critical. He is especially critical of an e-mail from auditor Pam Allison, which used the term “beef up.”

The Missouri auditor’s employee who used the term “beef up” when referring to the closeout audit says her term meant that she would add more detail to the audit. Allison spoke at the press conference with Galloway, telling reporters she grew up on a Polk County family farm, where you send cattle to the feedlot to be finished.

“This inadvertently sent e-mail was not evidence of a lack of objectivity, rather it was evidence that we were appropriately evaluating audit evidence,” says Allison.

The email from Allison read: “I’m thinking I’ll just drop the confidentiality paragraph in the (closeout audit) report and beef up the personal email/personal calendar section.” She says the report was a work in progress at the time, and that more details needed to be added.

The closeout audit concluded that AG Hawley’s office did not always follow communication and retention policies, and that the use of personal text and email to communicate official business was a violation of Attorney General Office (AGO) policy.

Senator Hawley’s written response to the audit describes the audit changes by Allison as “deeply inappropriate, unethical and potentially a violation of state law.”

In a tweet Thursday after the audit was released, Senator Hawley also said: “You (Auditor Galloway) should also come clean to investigators about putting political operatives on state payroll and manipulating audits to help your campaign for governor.”

Missouri Republican Party Executive Director Jean Evans has also issued a statement, calling for an investigation into Galloway’s audit. Evans accuses Galloway of abusing her office for politics.

Missouri audit: Hawley’s AG office might have used state resources to support his U.S. Senate bid

February 6, 2020 By Alisa Nelson

A state audit released today says Republican Josh Hawley’s office as attorney general might have used state resources to support his run for U.S. Senate. But State Auditor Nicole Galloway, a Democrat running for governor, says there were no clear violations of law. During a press conference today at the Missouri Capitol in Jefferson City, Galloway points to a lack of record keeping in some cases.

State Auditor Nicole Galloway

She talks about meetings held during regular state working hours between staff and campaign-paid consultants that sometimes did not explain the reason for the meetings. The closeout audit shows private emails and personal calendar meeting invites obtained indicate other meetings or phone conferences might have been held but records of those meetings were not kept or provided. The use of personal text and email to communicate official business and the use of a Google calendar for official meeting invites were in violation of the Attorney General’s Office policies.

The review also says Hawley used a state vehicle and driver/security detail for some trips without always explaining the purpose.

“A state vehicle was used to travel to Lincoln Days in Platte County – an event that is clearly political. In some cases, the state employee serving as driver and security detail took vacation time and received separate payment from federal campaign funds for the time of those specific meetings,” she says. “In his responses, the former attorney general claims to have reimbursed the state. There’s no record of any reimbursements to the state for the use of a state vehicle on these personal and political trips.”

Missouri law allows campaign resources to be used for government purposes but does not authorize government resources to be used for campaign purposes. Section 130.034.4(2), RSMo, permits campaign funds to be used for “ordinary and necessary expenses” incurred in connection with an elected office. But, Galloway says this section neither defines “ordinary and necessary expenses” nor specifies whether using campaign funds to pay consultants to provide administrative guidance is allowable. Section 36.157, RSMo, prohibits state employees from engaging in “political activity” while on duty or while using state resources. But, she says this section does not define “political activity.”

U.S. Senator Josh Hawley greets a supporter at GOP headquarters in Winchester on October 23, 2018. (File photo by Bill Greenblatt/UPI)

Galloway says the audit details incidents of current Attorney General Eric Schmitt’s staff putting up roadblocks, bullying, and threatening her staff.

“None of this is acceptable and is disappointing how the current Attorney General’s Office conducted itself,” she says. “The former attorney general and the current attorney general have asked for our help in public corruption cases using our audit procedures, our audit standards, these exact auditors that they are questioning now. They don’t have any problems with us doing these exact same procedures with the exact same folks in those public corruption cases, but all the sudden they do. The abuse these dedicated employees and licensed CPAs had to endure is unacceptable. I assume he did not like what this audit said.”

Schmitt’s spokesman, Chris Nuelle provided this statement:

“Auditor Galloway’s claims are ridiculous and unfounded. He says no such claims are even hinted at in the audit report prepared by her staff. From the beginning, Nuelle says the Attorney General’s Office worked tirelessly to cooperate and work with the State Auditor’s Office. That means dedicating thousands of man hours to gather, review, and transmit hundreds of thousands of pages of records, line up interviews and meetings, and respond to requests, all while continuing to perform the normal duties of the Attorney General’s Office. The correspondence from our office showed that we operated in a professional, cooperative manner.”

On Twitter today, Hawley says Galloway’s office engaged in partisan manipulation and potential unethical practices and says the audit was not independent. He says the report reaches the same conclusion as Secretary of State’s report one year ago: no wrongdoing by his office. He has filed a complaint against Galloway with the Board of Accountancy.

Another audit is underway of the general operations of Hawley’s office as attorney general. Closeout reviews are standard procedure when a state elected official leaves office.

To view the audit released today, click here.

Judge: Missouri Auditor can protect the indentity of whistleblower in Greene County complaint

December 5, 2019 By Ashley Byrd

In a challenge to whistleblower protection in Missouri, a Cole County circuit judge ruled against the Greene County Sheriffs office, in favor of State Auditor Nicole Galloway.

This comes from a 2017 case of whistleblower complaints about the use of public resources in Greene County in connection with a tax ballot issue.

In answer to a records request, the auditor did not share documents that would reveal whistleblower identities. Sheriff James Arnott sued.

The brief decision upholds the state whistleblower law that says, “Individuals who make a report under this section may choose to remain anonymous until the individual affirmatively consents to having the individual’s identity disclosed.”

In her response to the court’s ruling, Galloway stated, “Without the information provided by whistleblowers and the legal safeguards that shield those individuals, the audit of Greene County may not have happened.”

Former Missouri hospital executive pleads guilty to $114 million billing scheme

October 29, 2019 By Brian Hauswirth

A former executive of a northern Missouri hospital pleaded guilty in federal court in Florida Wednesday to a $114 million pass-through billing scheme.

The Justice Department in Washington says former Putnam County Memorial Hospital chief executive officer David Lane Byrns pleaded guilty to a one-count information charging him with conspiracy to commit health care fraud. Byrns pleaded guilty before U.S. Magistrate Judge James Klindt, of the Middle District of Florida.

The criminal count was originally filed in Missouri and was transferred to Florida, where Byrns now lives. The complex case was investigated by the FBI in Kansas City, Jefferson City and in Jacksonville, Florida. The Justice Department in Washington has been involved, as has the U.S. Department of Labor and the offices of two Missouri statewide officials.

The Justice Department says Byrns used the Unionville hospital to submit fraudulent claims for blood testing and toxicology, causing the Missouri Medicaid program and multiple insurance companies to pay more than $100 million in claims.

The Medicaid program is health care for low-income residents. Unionville is in far north-central Missouri, just south of the Iowa border.

Federal prosecutors in Missouri and Florida say billing companies and labs were also involved in the scheme, describing them as “co-conspirators.”

Missouri Auditor Nicole Galloway’s (D) scathing 2017 audit of Putnam County Memorial Hospital uncovered $90 million in inappropriate lab billings, and prompted calls for the federal investigation.

The Justice Department is acknowledging Galloway’s office for assistance, along with Missouri Attorney General Eric Schmitt’s (R) Medicaid Fraud Control Unit.