Norfolk auditor looking into official's credit card use

Correction: An earlier version of this story incorrectly described funding of the budget for Sharon McDonald's office. The budget for the office run by McDonald, an elected state official, is supplemented with city funds.

A Norfolk city auditor is investigating whether Commissioner of Revenue Sharon McDonald improperly used a city credit card when she spent thousands of taxpayer dollars on Richmond hotels and restaurants while lobbying the General Assembly. 

McDonald spent a total of about $27,000 in Richmond during the 2008, 2009 and 2010 state-lawmaking sessions, according to city documents. She reimbursed the city for only about $16,000 of those expenses with money from the Commissioners of the Revenue Association of Virginia, documents obtained by The Virginian-Pilot through the Freedom of Information Act show.

McDonald, an elected state official whose budget is supplemented with city funds, said Monday that she did nothing wrong. City officials agreed with her plans to spend taxpayer dollars in 2008 while she lobbied the General Assembly, she said.

“I was supported by the council and the city of Norfolk,” she said.

In 2009 and earlier this year, she said she lobbied state delegates on behalf of her office.

However, City Manager Regina V.K. Williams said McDonald was not authorized to lobby on behalf of the city during the General Assembly sessions. The city paid other employees and hired private lobbyists all three years on its behalf, Williams said.

Since learning of McDonald’s credit card spending in April, Williams has asked City Auditor John Sanderlin to examine the commissioner of revenue’s receipts, according to city documents.

City Attorney Bernard A. Pishko said he also has been asked by Mayor Paul Fraim to review McDonald’s expenses.

Williams also initially canceled all of the city’s 440 credit cards.

Currently, eight employees hold city credit cards, Williams said, including herself, four police officers who travel on the fugitive extradition squad, Pishko, and assistant city managers Stanley A. Stein and Anne Odell.

According to the city’s credit card policy, employees can only charge meals for city purposes. They must keep detailed accounts of all expenses, and cards are permitted only for city operations, maintenance and repairs. The policy sets a $1,000 limit per transaction.

Documents indicate that McDonald spent $11,408 lobbying the General Assembly in 2008 on behalf of the Commissioners of the Revenue Association of Virginia. When the session ended in March, she spent thousands more traveling to meet officials on behalf of the association, of which she was president.

In a 2009 newspaper story about her lobbying efforts, McDonald said the commissioners association reimbursed her for those expenses.

However, Darrell Hill, the city’s director of finance, said McDonald failed to repay the city for any of the $31,391 she spent on her city credit card in 2008. The charges included other expenses unrelated to her General Assembly trips.

McDonald said on Monday that she was referring to spending in 2009 when she said the association paid her bills. The association reimbursed the city for her expenses at the General Assembly in 2009 and 2010, Hill said.

Fraim said he is troubled by McDonald’s credit card charges and said to the best of his knowledge, McDonald “has never been asked to lobby on any issue on behalf of the City Council or the city of Norfolk.”

“Sharon is a state employee,” he said. “She acts independently of the city.”

McDonald said even though she paid for some of her lobbying expenses with city money, it was from dollars appropriated to her office for travel and educational expenses.

“It was part of my budget,” she said. “I stayed within my budget and spent what I thought was appropriate.”

According to records provided by Hill, McDonald spent 94 nights in hotels and used her card to pay for 134 restaurant charges in 2008.

Included were expensive meals at high-end eateries such as Morton’s in Richmond, where she spent $523 combined on three nights, and The Piano Club, where she spent about $1,007 in one night. That charge was for a reception for the Norfolk General Assembly delegation that McDonald said was co-hosted by Norfolk Treasurer Thomas W. Moss Jr.

Moss said he’s pretty sure he helped pay for the reception. “But if I did, I paid for it out of my budget,” he said. “And I didn’t use a city credit card. I don’t have a city credit card.”

Sheriff Robert McCabe is the only other constitutional officer who had a city credit card. A review of his records indicated he did not use the credit card to lobby the General Assembly.

In response to a Freedom of Information Act request, McDonald’s staff provided The Virginian-Pilot with incomplete copies of her credit card expenses. More than a dozen receipts were missing, including nearly $8,100 in charges in 2008 from the Commonwealth Park Suites Hotel in downtown Richmond.

A second FOIA request, answered by Hill, contained receipts not provided by McDonald, including The Piano Club expense and more recent charges to Hits at The Park restaurant at Harbor Park, Jiffy Lube and a suburban Richmond ABC store.

McDonald said any omission was unintentional. She said her business manager believes her office never got receipts for those charges.

Regardless, McDonald said that city policy does not explicitly state appropriate and inappropriate use of its credit cards.

The policy “has serious weaknesses,” she said.

McDonald also said that her credit card charges were available for hundreds of city employees to see on monthly statements. “Was anyone in the finance department looking at this when they paid the bills?” she asked. “If there were issues, why are they being raised now?”

She said she is being turned into a scapegoat.

“It’s troubling to me that my office is being singled out,” McDonald said.

Williams said the finance department was not authorized to question credit card bills, only to pay them. “They would rely on each department” to judge whether charges were appropriate, she said.

She acknowledged, however, that there may be problems with city-issued credit cards. Currently employees are not required to file expense accounts for travel, which she acknowledged is probably a weakness.

Sanderlin likely will recommend more central oversight of credit card charges, a recommendation she is likely to accept, Williams said.

“I enforce the same policies and rules equally among all employees,” she said. “We’re not singling out anyone. I would not do that.”

Harry Minium, (757) 446-2371, harry.minium@pilotonline.com