KSL Investigates: Government Employee Earns Free Flights on Taxpayer Funded Credit Card
ST. GEORGE, Utah — The Washington County Water Conservancy District is in charge of getting water to people all over Washington County. The agency, which has 53 employees, routinely charges hundreds of thousands of dollars on its district credit card.
After getting a tip about how rewards from that credit card were being used, the KSL Investigators uncovered the charges had amassed over a half million frequent flier miles through Delta’s Skymiles program as of November 2018. All those miles accumulate in Ron Thompson’s Delta account and co-mingle with miles he has earned personally. Thompson is the general manager of the water district.
The KSL Investigators dug through credit card records, which show Thompson has used the miles to purchase flights for work and personal travel – but the water district lacks the ability to segregate miles personally accrued by Thompson from miles earned off taxpayer spending.
In January 2018, a 40-year-old man named Garrett caught a flight out of St. George to Denver. District credit card records, obtained through an open records request, show he didn’t pay a dime for the flight. That’s because his dad, Ron Thompson, bought the ticket using 24,000 of the miles in his account.
“That many miles is a bit shocking to me,” said Paul Van Dam, former Utah Attorney General.
“That’s a lot of money,” added his partner, Lisa Rutherford.
Van Dam and Rutherford are Washington County taxpayers and vocal critics of the Washington County Water Conservancy District. They are both concerned with the district’s spending practices.
“What else are they doing?” asked Rutherford. “How else are they spending money that is not in keeping with what taxpayers deserve?”
Big Credit Card Bills
The KSL Investigators logged every charge the district swiped on its American Express account in 2017, totaling $229,567.88. The records show the district charged:
* $76,148.91 on computers and software.
* $74,292.03 on office supplies, conferences, and postage.
* $27,663.60 on hotel stays, including $5,587.37 on a block of rooms at Caesars Palace in Las Vegas for the Colorado River Water Users Conference.
* $10,670.23 on food, including $697.99 at Chick-fil-A and $2,930 at the Pizza and Pasta Factory.
* $498.62 on 32 car washes at Fabulous Freddy’s.
All that spending does not sit well with Van Dam.
“I’d be eaten alive if I had those kind of expenditures on my watch,” said Van Dam.
Thompson stood by the credit card charges.
“Those cards are fundamentally controlled by senior staff,” Thompson said. “And then we require that receipts be turned in for everything. And then it’s billed out to the various funds that receive the benefits of the purchases.”
How Were the Miles Used?
District records show spending on the credit card racked up tens of thousands of airline miles each month, all in Thompson’s name.
“A district or an entity can’t have a Skymiles account,” explained Thompson. “Someone’s number has to be on that account. It happens to be mine.”
Utah State Auditor John Dougall is concerned with the practice.
“Are those points coming back to the governmental entity for business purposes? Are they using it for some personal purpose? If they’re using it for personal then I have serious concerns with that,” said Dougall.
The KSL Investigators conducted an audit of 555,000 Skymiles earned between 2016 and 2017. Thompson and other staff used 475,000 of the miles for work trips, but three airline tickets were not work-related. In addition to the ticket to Denver for Garrett, miles were used to purchase two round-trip tickets to Jackson Hole for other family members.
The three tickets cost 129,500 miles. Skymiles records show Thompson personally accrued only 18,945 miles over the same time period.
“If you were to use entity points for personal purposes, that would be improper and we would note that,” said Dougall.
Thompson defended the way the miles were used.
“Well certainly, I have personal miles that are in that account,” said Thompson. “I think it’s consistent with the policy, both business and governmental entities, those personal miles are available for personal use, and that’s the miles I was using.”
Dougall said the state of Utah does not earn frequent flier miles on taxpayer spending. First, the state contracts with a travel agency for flights. Employees can earn miles for sitting in the aircraft, but they do not earn miles on the ticket purchase.
Second, the state uses purchase cards and electronic payments rather than traditional credit cards. Purchase cards give the government more control over what the cards are used for. The purchase cards also earn cash back. In Fiscal Year 2017, the state’s spending earned $647,170.01, which went right back into the state’s coffers.
Dujanovic asked Thompson, “Why does the district use a credit card that gives you frequent flier miles?”
“It started out when we were small,” explained Thompson. “I think that the first card was actually one that I was just being reimbursed on, and then we started having more demands, and it just became a district card, and we’ve benefited immensely from having those reward points available to the district.”
Thompson said the credit card helps the district buy supplies and keep its spending organized. But he said perhaps earning airline miles isn’t such a good idea anymore.
“I suspect we’ll take a pretty hard look at whether we ought to use the Visa card which we’ve recently acquired and get rid of the rewards card,” said Thompson.
The Washington County Water Conservancy District implemented numerous changes after KSL began asking about its credit card policy.
In October 2018, the board of trustees approved a policy establishing airline miles earned on the district’s card were only to be used for district purposes.
In December 2018, Thompson hired an outside auditor to review the district’s use of frequent flier miles.
In January, Zachary Renstrom, the water district’s assistant general manager, began the process of acquiring purchase cards though Utah’s master contract. The purchase cards can earn cash back for the district.
Thompson plans to retire at the end of 2019. As far as the remaining miles in his Skymiles account, he said the district will either spend them down, or he will transfer them to another employee for the district to continue to use. He said he had no plans to keep them.