The state Department of Inspector General found several instances of then-Revenue Commissioner Walter Anger failing to comply with state laws on some government procedures, a deputy legislative auditor told lawmakers Thursday.
Anger, who also served as a deputy director at the state Department of Finance and Administration, retired last year, department spokesman Scott Hardin said.
On Sept. 6, 2019, Anger told finance department Secretary Larry Walther of his intent to retire, and he was not asked to retire nor was he terminated, Hardin said after a meeting of the Legislative Joint Auditing Committee's Committee on State Agencies. Hardin said Anger's last day was Oct. 31, 2019.
Department of Inspector General Secretary Elizabeth Smith said in a letter dated Feb. 6 to Walther that on Sept. 9, 2019, Gov. Asa Hutchinson asked her department to investigate discrepancies regarding the handling of a lien release by the finance department. Her letter summarized the findings of the investigation.
Deputy Legislative Auditor Tom Bullington said the inspector general's Feb. 6 report found that Anger issued instructions on March 16, 2017, to release a clear certificate of title for a vehicle without obtaining a formal release from the lienholder as required by state law.
"Multiple employees were aware of the inappropriate transaction ... but they did not report it to DF&A management or the Arkansas Fraud, Waste and Abuse Line for over two years," Bullington told the Committee on State Agencies.
Sen. Trent Garner, R-El Dorado, questioned Revenue Commissioner Charlie Collins about how a number of employees knew about a lien being improperly cleared yet they didn't report that problem. Collins, who assumed his post in November 2019, also is a deputy director of the finance department.
"The individuals involved essentially feared for their jobs because of the person directing them to do that had the power to fire them," Collins said.
"There was one specific instance when they were directed to release a lien which was completely improper and against the law, so [in] that instance of releasing the lien, a couple of people were directed to do it," he said.
Garner asked Collins about the consequences to Anger.
Collins replied, "That person is no longer with [the finance department]. That was my predecessor."
Anger could not be reached for comment by telephone Thursday afternoon.
Sen. Kim Hammer, R-Benton, asked Collins why the employees didn't seek the protections of the state's whistleblower law.
"The feedback I got ... as I talked to the individuals is a concern that somehow, someway, somebody is going to be able to find out what they are doing," Collins said.
"There were concerns that the cameras in their buildings for security, listening devices, computer monitoring and other of those types of surveillance were being used to track certain individuals' behavior by the individual that is no longer with us," he said. "They did not feel that there was anything that they could do that would not be found out by that individual."
Hammer asked if these employees have been relieved of their fears.
Collins replied, "Yes, sir."
Asked who had the lien at issue, Hardin said afterward that "pursuant to motor vehicle record confidentiality under the Driver Privacy Protection Act, 18 U.S.C. § 2721, et seq., we are prohibited from sharing this information."
Bullington told lawmakers Anger also authorized revenue office agents to process six Real IDs -- an enhanced driver's license -- without obtaining all required documentation.
Although the finance department had developed an internal report to monitor exception activity, "these six exceptions were not included in the report," he said.
In response to a question from Garner about what employees knew, Collins said, "The individuals feared for their job."
"As part of what we have done, we made our Real ID training more robust," he said.
"We made it very clear to everybody that we were to follow those procedures [and] if there were any questions or issues, that they [were] free to reach out directly to me, that they [were] free to reach out directly to [the human resources office], but that the procedures and processes that we had in place are rigorous and going to be followed rigorously," Collins said.
Bullington said Anger also viewed tax information in various state employee accounts without noting an official business purpose, based on a review of activity in the Arkansas Integrated Revenue System.
Although the Internal Revenue Service requires at least a weekly review and analysis of system audit records, a report available in the Arkansas Integrated Revenue System's tax system for monitoring access of federal taxpayer information had not been accessed in more than two years, Bullington said.
In response to a query from House Speaker Matthew Shepherd, R-El Dorado, Collins said, "I have a person in the income tax shop who is now doing that, so this [document] is a copy of the procedures that she is using to make sure that we are following that weekly, and this is the documentation that we are in fact checking that weekly, as was recommended."
In addition, Bullington said Anger also initiated a service request, implemented in 2016, in the Driver Services Motor Vehicle System to begin collecting fees on expired tags for years a vehicle was not in use.
"Once the vehicle was in use, the owner would be required to pay all lapsed years' fees," he said. "In January of 2019, the collection of these fees was deemed inappropriate and the process ceased. However, the system still assesses the fees, and DFA employees must manually reverse the transactions."
The Department of Inspector General issued a compliance audit report dated July 8 of this year with "an additional nine instances of exceptions with documentation" provided by VIPs in state government to obtain Real IDs, Bullington said.
The July 8 report said a VIP was defined in the audit as employees of the state's constitutional officers, all finance department employees, current state lawmakers and all state employees in positions graded GS15 and above.
Asked who received the Real IDs without the required documentation, Hardin said afterward that the finance department was prohibited from sharing that information under the Driver Privacy Protection Act.
Garner asked state officials if there have been efforts to make sure that those who obtained the Real IDs without the right documentation either complied with the law or no longer had those licenses.
Collins said a state official reached out to these people.
About 90% of them "had the proper documentation taken" and about 10% have "either left the state or we have not been able to get back in touch with them or they have had a subsequent ID that was done properly," he said.
Rep. Jay Richardson, D-Fort Smith, asked whether there is any chance that criminal charges will be filed against Anger.
Assistant Revenue Commissioner Paul Gehring said, "This matter was handled by the [finance department] administration.
"A determination was made as to an outcome," he said. "If there were sufficient cause for the matter to be referred to the prosecuting attorney for Pulaski County, we would certainly have done so."
But Garner said, "Once the report is filed, we'll refer these findings to the prosecutor and they'll make the determination whether they want to press criminal charges."