Weirton Port Authority audit drags on, more records subpoenaed - WBOY.com: Clarksburg, Morgantown: News, Sports, Weather

Weirton Port Authority audit drags on, more records subpoenaed

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State Auditor says lack of records has led to a ‘strong measure' to reconstruct financial documents

State Auditor Glen B. Gainer has subpoenaed financial records his staff needs to complete an audit of the former Weirton Area Port Authority the staff started more than 10 months ago.

Gainer said officials associated with WAPA, dissolved by vote of the West Virginia Public Port Authority in October, so far have failed to produce required records.

"We're attempting to do that work (but) in order to do that, we need all the records," he said. "Typically, what we do in these kinds of cases, we issue a letter stating that ‘these are the records we need, please make them available to us.' 

"After a period of time, if they don't comply, which is what happened in this case, we subpoena the records."

City and county leaders had initially requested a post-legislative audit to address their concerns with the port's operation, but after jurisdictional issues arose, the auditor's office stepped in to conduct the review.

"What I can say is they didn't bring all of the records we requested," Gainer said. "We can't complete our work. We've done some field work, but we can't complete (the audit) without all of the records. 

"The records we need they have not provided to us, that's why I issued the subpoenas."

City and county leaders had cited a litany of concerns in seeking the state's intervention, including an organizational structure they described as "complicated" and "unclear" with too little government oversight and a lack of transparency.

They'd also questioned the presence of Karl Keffer as a port adviser and, more recently, interim director. Prior to allying himself with the Weirton port project, Keffer had been associated with a similar venture in the Eastern Panhandle, where two vendors filed suit against him and his company, Tantara, alleging they hadn't been paid. Default judgments totaling more than $500,000 were entered against him by judges in Berkeley County and Fairfax County, Va.

At least two suits had been filed before the port's dissolution: Bridgeport-based CityNet claimed Keffer had given them the go-ahead to do more than $200,000 in work for which they had not been paid, while Kokosing Construction Co. filed suit in federal court to recover more than $500,000 owed it for earthen work ordered by port officials.

The port was structured around three entities: Weirton Area Port Authority, which it billed as an autonomous political subdivision that, until October, had been authorized by the West Virginia Public Port Authority; Weirton Area Port Authority Inc. (WINC), with its operational arm billed as a "federal assistance (IRS 63-20) qualified, public-benefit corporation," and Tri-State Port Management, which was made up of private investors who oversaw port concessions.

WINC, however, is not on the U.S. Internal Revenue Services list of tax-exempt organizations.

When the audit was announced in 2013, WAPA Chairman B.J. Defelice had said since the organization hadn't received public funding, "an audit would be an easy request."

But sources familiar with the audit say the state also wants to examine Tri-State Port Management's records.

"Right now, it's all being audited by my office," Gainer said. "We're attempting to look at everything associated with it because it is so ambiguous, it all kind of melds together. 

"All we can do is look at everything we can possibly look at. We'll look at everything and do our best to make a determination from that."

If need be, Gainer said his staff will subpoena documents from financial institutions to reconstruct records.

He also said his office usually doesn't have to resort to subpoenas, acknowledging it is "a strong measure to have to impose."

"Any time we can't find records, it really complicates our work and it takes longer than it typically should for this type of audit," Gainer said. "But we have folks who are skilled at that and we have those folks working on this audit."

He said his office also has the option of calling in the Commission on Special Investigations "if, during the course of our work we identify something that would be fraud."

"But right now, all the auditing is being done by my office," he said.

WAPA vacated the building it had occupied in Weirton's Half Moon Industrial Park shortly before Christmas. Sources familiar with the move say the entity was evicted by the building's owner, Center Point Terminals. Center Point executives, however, would say only that WAPA had moved out.