Report shows potential conflict of interest at DMR
Published: December 10,2012
BILOXI — The Mississippi Department of Marine Resources has spent more than $1.4 million in public money on two recreational fishing boats leased from a foundation managed by the agency’s director.
The Sun Herald reports the Mississippi Marine Resources Foundation supplies DMR with a 36-foot Topaz open fisherman and a 42-foot Californian convertible. Paid for with public money, the DMR leases, upgrades, repairs, maintains and stores the boats, which are valued at $350,000 and $284,000 for insurance purposes.
The newspaper reports that Bill Walker, the head of DMR, manages the foundation.
The revelation comes at a time when DMR is facing state and federal audits. The agency’s use of public money to buy and conserve coastal property also is under scrutiny.
Walker told the Sun Herald that DMR leased the boats for the Artificial Reef Program to take people out and educate them about marine resources.
Walker said the foundation gets money from private donations.
“No state money goes to the foundation other than reimbursements for insurance on the vessels and whatever they spend on maintenance and repairs, and all of that is covered under a lease agreement between the department and the foundation,” he said.
When asked if the two boats are necessary, Walker said, “I don’t know what you mean by necessary. We certainly use them for good.”
Asked if they are used for entertaining, he said: “We take people who can be helpful to our department. We do take people out and entertain them on our vessels. And when we do, we do work.”
Unlike other DMR boats, which are well-marked with the agency’s logo, the two foundation boats look like other private vessels.
The DMR Artificial Reef Program has a large metal work boat, the Fish Haven, designed to handle equipment needed to monitor the reefs as the staff fishes for samples. It was specially built for the DMR to accommodate the side-scan sonar the staff uses to record images of the reefs under water.
Walker said, however, the two foundation boats are more comfortable for fishing the reefs.
The Mississippi Marine Resources Foundation was incorporated almost nine years ago but is not considered a charity by the state, the Secretary of State’s Office said. The IRS revoked its tax-exempt status in 2010 for failing to file disclosure forms for three years in a row. In November, the IRS reinstated the foundation’s nonprofit status, an IRS spokesman said.
The Sun Herald reported that it was unable to see public disclosure records of the foundation’s transactions either through the IRS website or through a records request to the DMR. Walker said the State Auditor’s Office has those documents now. Auditors took documents from Walker’s office and two other offices at the DMR in late October as part of an investigation.
The foundation acquired the boats from David Harris, who has for years run a boat-donation program in Ocean Springs, first at the YMCA and then at a charity he created in 2008 named YADA, Youth Alternative Development Activities. Boats are donated to the charities for a tax write-off.
The Topaz was donated to the YMCA under David Harris, was leased directly to the DMR for two years — during which time it received extensive repairs paid for by the state — and was then transferred to the foundation.
The Californian was donated in 2010. That was the same year DMR used $3.6 million in federal CIAP money to buy Harris’ boat-storage building and restaurant at the Ocean Springs Harbor, which was on the Jackson County tax rolls at a value of $1.3 million. Appraisals for that land purchase and others have come under scrutiny in a federal audit by the Office of Inspector General at the U.S. Department of the Interior.
In three recent interviews with The Sun Herald, Harris said he didn’t remember details about the boats or transactions involving the boats, whether between the original owners and the charities or the two charities and the foundation.
He said when he moved his records from the YMCA to his business, Harbor Landing, and that flooding destroyed some of his paperwork.
DMR records show from 2000 to 2009, oil companies donated rigs to the DMR, along with more than $7 million to the state to maintain them.
In October 2009, records show, Chevron U.S.A. Inc. donated a rig to DMR. Walker signed the donation papers for the DMR. But the check for $115,162 was made out to the Mississippi Marine Resource Foundation.
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