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Internal documents reveal months of concerns at embattled state Veterans Affairs board

Northeast Mississippi Daily Journal - 7/30/2022

Jul. 30—JACKSON — Months before Stacey Pickering resigned as director of the state Veterans Affairs Board, internal agency documents show at least two department executives had raised a litany of concerns about how the organization was operating and if it was complying with state law.

The Daily Journal obtained dozens of pages of internal memos that a high-ranking employee filed away for nearly a year, sounding the alarm about the department's leases, contracts and romantic relationships between a leader and a subordinate.

The concerns about the agency, which manages four veterans homes throughout the state, grew so acute at one point that its chief financial officer refused to sign off on routine forms.

Joseph Hemleben, the former deputy director at the agency, filed around a dozen memos outlining various problems he had with the organization between February 2020 and December 2021.

The concerns Hemleben, an attorney, voiced ranged from small issues such as uncollected payments from tenants to extreme allegations that Pickering was skirting around the department's own employee handbook by having an inappropriate personal relationship with a subordinate.

After Hemleben raised repeated concerns to the director of the agency, Pickering gave him a written reprimand, claiming that multiple employees complained that Hemleben fostered a hostile work environment.

Pickering in December placed him on administrative leave, but Hemleben eventually opted to leave the agency altogether.

Still, the internal documents raise significant questions about how the agency operated under Pickering, a former state auditor and legislator, and the workplace culture he cultivated.

Pickering, who resigned from the agency in May for undisclosed reasons, did not respond to a request for comment. Neither did Hemleben.

Nearly all of the appointed members of the VA board, through a spokesperson, declined to comment. The leaders of the agency, through a spokesperson, also declined to comment.

David McElreath, the north Mississippi representative on the VA board, did not want to comment specifically on the documents because of personnel issues and potential ligation. But he told the Daily Journal that any time a concern was brought before the board, they reviewed it seriously and thoroughly.

Hemleben wondered if VA violated bidding laws

One of the more alarming allegations Hemleben raised was whether the agency was violating the law because it used quotes to obtain medical waste services instead of soliciting bids.

How an agency obtains resources and what types of goods it requests often speaks to how a public body intends to use tax dollars to deliver services to people.

To ensure public bodies use tax dollars efficiently, state law requires all "solid waste collection or disposal contracts" over $50,000 to be obtained through a competitive bid process. If the contracts are under $50,000, agencies can simply obtain them by getting two separate quotes.

Hemleben filed a memo on Oct. 21 saying that the company's chief financial officer informed him that the agency had entered into a contract with a medical waste company for around $122,675 without going through the bid process.

When Hemleben approached Kathy Caldwell, the agency's general counsel, about the bidding issue, she said she did not handle decisions about contracts.

Caldwell also said that the length of the contract can be a factor in determining if waste services are obtained through bids or quotes, even though the statute regarding waste contracts does not mention contract length.

If the VA board skirted the state's bidding law, then the public agency potentially overpaid for the medical waste services with tax dollars.

Hemleben wrote that he intended to speak with Pickering about the issue, but it's unclear if he ever did.

Chief accountant refused to approve standard forms

Hemleben wasn't the only high-ranking official to sound alarm bells.

Another one of Hemleben's concerns stemmed from questions that Greg Higginbotham, the department's chief financial officer, raised about the accuracy of the department's leases.

Employees with the state Department of Finance and Administration emailed Higginbotham that new accounting and reporting practices require public bodies to have a list of all its active leases.

Higginbotham emailed Caldwell for a list of the current leases; she informed him that the agency only had two active leases, which he doubted.

"We only have 2 leases?" Higginbotham wrote in an email. "We have VSOs (veterans service officers) with office space all over the state. We have copiers in every nursing home and VSO's office. We have to have more than 2 leases, but if you are willing to put in writing we only have 2 leases, I am cool with it. I just need written confirmation that we only have 2 things that belong to someone else that we use."

Caldwell justified her answer by saying that the Veterans Affairs Board is not charged for the veterans service offices around the state, so the agreements are not technically a lease.

Still, Higginbotham, who did not respond to an interview request, wrote to Hemleben after his exchange with Caldwell telling him that he could not sign off on the forms because he believed it to be incorrect. Approving the forms could violate his ethical duties as a certified public accountant, the CFO argued.

"The negligence on behalf of MSVA's legal counsel to provide the requested information will lead to material misstatements within MSVA's portion of the financial statements and could lead to material misstatements within the State of Mississippi's Comprehensive Annual Financial Report," Higginbotham wrote to Hemleben.

Hemleben wrote that he met with Pickering to explain the situation. That's when Pickering advised Hemleben to meet with Melissa Wade, the chief of staff.

But Wade, too, was a point of concern for Hemleben.

Closed-door meetings between Pickering, Wade caused concerns

The documents allege that Pickering was involved in a personal and potentially romantic relationship with Wade, who resigned at the same time as Pickering.

Hemleben wrote in a memo dated Nov. 29 that he met with Pickering to inform him that rumors were circulating at the office about the supposed relationship.

"I further advised the Executive Director that he needed to 'build a wall,' to protect himself such as not holding closed-door meetings alone with Ms. Wade in his office, especially meetings that ran for hours at a time, which has become common," the memo reads.

Hemleben said he did not believe he had an explicit duty to report the allegations to the State Personnel Board because there was no clear evidence that such a relationship was occurring.

But a more recent memo reveals the relationship between Pickering and Wade may have gone further.

Hemleben wrote on Dec. 15 that he met with an unnamed employee who informed him that a cleaning person witnessed Pickering and Wade engaging in sexual behavior.

A person who cleans the building allegedly knocked on Pickering's door, and no one responded. The worker then got a spare key and entered to clean the office. But when the person opened the door, she witnessed Wade and Pickering engaging in "sexual conduct."

Wade also did not respond to a request for comment.

After hearing of the incident, Hemleben felt like action wasn't warranted because of a lack of evidence corroborating the event, he said in the memos.

If the sexual or romantic relationship, which WLBT first reported, did actually occur, it could violate state law, which forbids state employees from engaging in romantic or sexual relationships between supervisors and and subordinates.

Retired Army colonel replaces Pickering at VA Board

It's unclear the extent to which the appointed board members were aware of the memos, or how much of the memos' content is what led to Pickering's abrupt resignation.

Pickering resigned as director of the state agency on May 13. Neither Pickering nor the board has given a public reason why the former state auditor resigned.

Mark Smith, the former deputy director of the agency, was named its new director on June 23.

Smith served in the U.S. Army and Mississippi National Guard from 1976 to 2006, retiring with the rank of colonel. He has served in state government at multiple agencies, including the Mississippi Department of Child Protective Services, the Mississippi Department of Archives and History, and the Mississippi Department of Human Services

Smith previously said he is honored to lead the agency and help serve the state's 186,000 veterans.

"With a great team already in place, we will continue to provide superior service, care and assistance to America's heroes," Smith said in a statement when he was appointed as director.

Both appointed board members and state lawmakers have publicly said they support Smith as the leader of the embattled agency.


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