Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, February 11, 1995 TAG: 9502130032
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: KIMBERLY N. MARTIN AND JAN VERTEFEUILLE STAFF WRITERS
DATELINE: LENGTH: Long
Lautenschlager acknowledges that he wrote checks from the fund to pay for textbooks and training equipment for classes. But he says he used fees paid by class participants to reimburse the account.
However, Furman Whitescarver Jr., lawyer for the board that oversees the Wiley Fund, said at least $2,000 that should be in the fund is unaccounted for. He said it could have been transferred to another account or spent on supplies, although that's not how the fund was intended to be used.
"We're not pointing a finger at anyone," he said. "We don't know if a crime has been committed. It's up to the state police to decide."
Lautenschlager, who has been a member of the Salem squad for 23 years, said he's confident no irregularities will be found by state police investigating the rescue squad's finances.
"I think it's probably an example of poor documentation, poor record keeping," the city councilman said.
He said he never took any money from the fund for personal use.
Lautenschlager was a member of the Wiley Fund's board until he resigned last month and turned over bank records to the state police.
Last year, the squad received $164,000 in contributions.
A state police investigation began last month into irregularities in another rescue squad fund. The squad's chief, Ray Houff Jr., resigned after the investigation of the Good Neighbor fund began.
Commonwealth's Attorney Fred King said he hasn't decided whether to seek an indictment and has asked state police to gather additional evidence.
The separate Wiley Fund investigation is awaiting the state attorney general's approval because it involves an elected official.
The other four Wiley Fund board members thought the fund had been inactive since 1993, until they discovered that Lautenschlager had been writing checks, sometimes several a month, Whitescarver said.
The fund started with about $20,000 in 1986, and the board has authorized about $2,700 to be distributed. But the board found only about $15,300 in the accounts - three certificates of deposit and a checking account - when they decided to begin using it again within the past two months, Whitescarver said.
"They thought they had a dormant account, but it was an active account," he said. "Money was put in and taken out on a fairly regular basis."
Initially, checks drawn on the Wiley Fund required two signatures. But after the account was transferred to another bank in 1992, Lautenschlager became the sole board member authorized to write checks, according to Whitescarver.
"We're concerned about how the account was being managed," Whitescarver said. "It could have been used for books or other rescue squad supplies. It's an inappropriate use, but it's not stealing."
The fund was set up after paramedic David Wiley's death in 1984 to provide scholarships to emergency medical technicians and to be used for other purposes approved by the board. But the resolution establishing the fund and its by-laws is not clear on how approval is to be obtained.
The resolution, which Whitescarver called a vague, "homemade" document, also doesn't stipulate how many signatures are needed on checks from the fund.
Jim Swanson, attorney for the rescue squad, said the obscure resolution has created much of the problem.
"The whole thing was horrendously, vaguely set up," he said. "There's not a lot of procedures in place about how things were done. That's about 99 percent of the problem here."
Lautenschlager said he used the account to buy textbooks and training equipment for rescue squad classes; as the squad received money from class participants, that money was put back into the account. He said a rescue squad treasurer - whose name he said he can't remember - was aware of the fund's use.
The money returned to the account was equal to or more than what was spent on the supplies, so the fund simply was being used as a "pass-through" account, Lautenschlager said. There are receipts for all the transactions, which he has given to state police, he said.
Whitescarver said memos on the checks written by Lautenschlager support his explanation. Some note that the money was for textbooks, for transfer of funds or for teaching supplies, according to Whitescarver. Many of the checks were written for around $1,000, the attorney said.
Lautenschlager, 39, has spent a good part of his life working with the rescue squad. He's been involved since 1972 and has held the office of chief and deputy chief. He resigned as deputy chief last May when he was elected to City Council.
He has made a career as president and executive director of the Western Virginia EMS Council. The council is one of eight state boards that coordinate emergency medical training for agencies that provide prehospital emergency care.
This has "certainly been a difficult period for the squad and me and my family, personally," he said.
By state law, state police investigations of elected officials require the approval of the governor, the attorney general or a grand jury. Had the Salem police investigated, that approval would not have been required. But city police transferred the investigation because of their close relationship with the rescue squad.
The length of time taken to begin the Wiley investigation is a "sore spot" with people because of the speed with which the Good Neighbor fund investigation began, Swanson said.
Del. Morgan Griffith, R-Salem, said he spoke to Attorney General Jim Gilmore last week to make sure the process was moving normally.
Nothing is being held up because Lautenschlager, like Gilmore, is a Republican, Gilmore's spokesman, Mark Miner, said Friday.
Griffith said he told Gilmore, "We don't want it looking like because he's a Republican, we're trying to play games."
The senior assistant attorney general who approves such state police investigations was out of the office this week.
by CNB