PANAMA CITY, Fla. (WMBB) — The release of a search warrant that was part of the FBI’s investigation into Hurricane Michael-related fraud created a stir this week.
On Thursday, Superintendent Bill Husfelt called a news conference to deny allegations in the document.
On Friday, Bay County leaders say they spotted irregularities in the debris collection process and caught them before they became a problem.
Bob Majka, County Manager for Bay County, revealed for the first time county officials discovered and stopped $7 million in illegitimate bills connected to the $200 million dollar hurricane recovery effort.
“As they were working through that process, that was when we were able to identify that work that occurred on private property,” Majka said. “It occurred outside of the time frame in which Ashbritt was (contracted) and it was conducted in areas they weren’t authorized to conduct work. ”
Majka said the county discovered issues with bills from both Ashbritt and Crowder-Gulf in November of 2018 — a mere month after Hurricane Michael devastated the Panhandle. The county declined to pay out millions in invoices when auditors determined that the invoices were incorrect. It also received a $250,000 refund from Ashbritt after discovering mistakes in the paperwork.
“I think the county had and will continue to have the appropriate checks and balances in place to catch fraud, waste, and abuses which I think has been done here, and again we were able to kick that back and work through that and make sure those dollars weren’t expended,” Majka said.
He added that county officials often discover issues in paperwork on a variety of jobs. And the federal government closely examines the debris removal process after disasters because that is where fraud is most likely to happen.
“Aside from the parties that are named or involved that have may or may not done anything illegal it is an area of concern and that’s why it gets so much attention and the fact that there’s so much scrutiny being paid to it by law enforcement is not a surprise,” Majka said.
Majka said the county never hired GAC, the construction firm under FBI investigation. However, GAC was an Ashbritt subcontractor for hurricane recovery work.
Despite the $7 million in apparent fraudulent billing, Majka declined to call the activity illegal. He also said no one at the county ever called law enforcement over the bills.
“There’s the presumption that they are innocent until guilt is proven. What we are talking about here is an affidavit here that was used in an effort to obtain a search warrant and I think I will reserve my judgment until I see the facts and the outcome of the case,” Majka said. “It will be problematic if at the end of the day these allegations are proven to be true. It would certainly be disappointing.”
He also said the county cannot, legally, prevent any of these companies from getting new contracts in the future.
“Florida statute has public entities crime section that is very deliberate on when a vendor can essentially be put on a list of so they can’t receive public work and we are not to the point of that yet with any of the parties involved with any of these affidavits or indictments,” Majka said.
No one who works for the county or these companies has been indicted in this case. Several Lynn Haven city officials have already pled guilty to corruption charges in connection to this investigation.
A trial for the former mayor and a local business owner is set for November.
Watch the full interview below: