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Kerry Gibson, former Utah ag commissioner, focus of scathing state auditor’s report

By Tim Vandenack standard-Examiner - | Nov 18, 2020

Kerry Gibson, the former head of the Utah Department of Agriculture and Food, is the focus of a scathing review by the Utah State Auditor that was spurred by reports of “concerns” about agency management during his tenure.

Among the big concerns to emerge from the auditor’s review were weaknesses in procedures meant as guides and checks to activities of agriculture department staffers. “This report identifies a number of concerns highlighting weakness of UDAF’s control environment, which increased the risk of noncompliance and misuse of public funds,” according to a press release from the auditor’s office on Wednesday that accompanied release of the probe.

Broadly, the audit found that Gibson, a former Weber County commissioner and 1st District U.S. House candidate, improperly used a state vehicle while head of the Utah Department of Agriculture or Food, or UDAF. It questions his role in selection of one of the firms to get a license to grow medical cannabis, a process overseen by the department. It also takes aim at some of his underlings, notably the operators of a communications company hired on by Gibson to assist him after he took over as UDAF commissioner.

In a message to the Standard-Examiner, Gibson didn’t respond to specifics of the audit but said he operated “by the book” and cooperated with auditors. He focused on what he said were the accomplishments of his tenure, from April 2019 until January 2020. He was appointed the UDAF commissioner by Gov. Gary Herbert and stepped down on launching his unsuccessful bid for Congress.

“Under my direction, the department became more service-oriented and accountable to constituents and taxpayers. I am proud of the work we completed,” Gibson said. “This report fails to recognize or consider the logistical needs to serve at the level that we achieved. Agriculture is Utah’s oldest and most basic industry, and we owe (the ag sector) our gratitude and respect.”

The findings of the audit range, and get very specific, painting an unflattering picture of operations under Gibson. The introduction of the report, though, notes that an audit, by its nature, focuses on weaknesses and problems and acknowledges the possibility of “strengths and accomplishments.”

Among the findings:

Gibson improperly used a state vehicle for “unallowed commutes” and even a pair of weekend trips to Bear Lake. The agriculture department incurred a financial loss of at least $4,419 due to questionable vehicle use by Gibson and others working under him.

Gibson showed “poor judgement” in visiting the facilities of an unnamed firm, called Applicant A, that at the time had been vying for a cannabis growing license as part of the state’s medical marijuana program, overseen, in part, by the ag department.

Gibson didn’t serve on the committee that formally evaluated the firms that would get licenses, but the visit created an appearance issue. The firm ultimately received a license. “This visit added to the perception that Applicant A was improperly favored by the committee,” the audit reads.

The audit also called into question the selection of the firms that ultimately received growing licenses, calling the seeming bias toward firms favored by senior management “unusual” and an indicator of a possible attempt by them to influence the outcome.

Gibson and Natalie Callahan, who worked as director of operations at the ag department under Gibson, received “improperly” upgraded hotel rooms and an airplane seat as part of a conference they attended in Hawaii.

Furthermore, both used state purchasing cards, tapping a state account to cover official expenses, and then sought reimbursement for the expenses, Gibson twice and Callahan once. Gibson, the report went on, submitted duplicate reimbursements for three Uber rides and stayed in a hotel that cost more than what state guidelines allow for employees though there were cheaper nearby options.

Gibson, as a UDAF employee, should have disclosed that a farm operated by his family had a $500,000 UDAF loan, with $300,000 in principal outstanding during his tenure as commissioner.

Though he relinquished his stake, he didn’t disclose his connection to the farm in a conflict-of-interest statement. UDAF extended the term of the loan and waived more than $3,000 in late fees while Gibson was commissioner. While those decisions were consistent with the handling of other loans, “it gave the appearance of a conflict of interest.”

Beyond Gibson, the report takes aim at Callahan and Sasha Clark, who served as public information officer during Gibson’s tenure. Callahan and Clark also run the Dicio Group, a public relations company, and the auditor says they charged the ag department for work hours when they also seemed to be doing work for a Dicio Group client. Furthermore, Callahan sought “significant” overtime charges, 427 hours during her nine-month tenure, 35% more than her predecessor.

“Given these issues, we are concerned with the accuracy of the charged time. Due to the lack of documentation, it is difficult to reconstruct work performed,” the report says.

The report also noted Callahan’s professional connection to Applicant A, the unnamed firm seeking a cannabis growing license that Gibson visited. Before joining UDAF, Callahan had served as a public relations representative to someone who later became a principal at the company. While at UDAF, she served on the committee that evaluated the applications that Applicant A and other firms submitted to get cannabis growing licenses.

Such relationships “could be considered a conflict of interest and should be disclosed,” the audit reads. But Callahan reported no conflict, and noncompliance in such circumstances, the audit warns, “impairs transparency of the process.”

The issues reached the office of Gov. Gary Herbert, who apparently put Gibson on administrative leave as a result. On Oct. 2, 2019, Herbert issued a directive calling on Callahan and Clark to cut their ties with the Dicio Group or face firing. The directive also called for a stop to improper vehicle use and an end to unnecessary travel in the department.

“Due to non-compliance with the directive, the governor’s office placed (Gibson) on administrative leave. In January 2020, the former commissioner resigned,” the audit reads. He had taken over the department’s leadership post just nine months earlier, on April 15, 2019.

News Gibson had been placed on leave is only emerging now. At the time he stepped down, Gibson said he was leaving the agriculture department to launch his bid for the U.S. House. He finished third in the Republican primary for the post last June and Blake Moore, a fellow GOPer, won election to the U.S. House seat on Nov. 3.

While not going into details of the audit, Gibson said he spent “hours” answering questions on the issues covered in the review.

“Our work was done 100% by the book and in compliance with state policy and direction from the governor’s office. It’s disappointing they chose to release a half-baked report without including any of my responses.” Gibson said.

A rep for the Dicio Group didn’t immediately respond to a query from the Standard-Examiner seeking comment.

’WE’RE REALLY HAPPY'Gibson, whose family operates a dairy farm in western Weber County, is no stranger to controversy. He was the focus of an Ogden Police Department probe as a county commissioner stemming from charges of misdeeds under his leadership. No charges were ultimately filed and Gibson maintained all along that the probe was the result of political foes out to get him.

Those familiar with the situation, though, said politics and personality had nothing to do with the police probe. Discontent among county roads and public works employees and their allegations of suspected misdeeds or ethical lapses under Gibson’s leadership as county commissioner led to the investigation, they say.

The Dicio Group, meantime, has a strong connection to Weber County. It handles communications for the county government, an arrangement first approved in 2017, when Gibson was a county commissioner.

“We’re really happy with what they’re doing for us,” County Commissioner Scott Jenkins said.

He hadn’t seen the final report from the state auditor, but commissioners were aware the auditor’s review was underway, Jenkins said. Accordingly, they asked Clark about it when they learned the news. She said the Dicio employees working under Gibson “only did what they were asked to do,” Jenkins said.

Utah State Auditor John Dougall said the complaints leading to the audit came from “whistleblowers” inside and outside the agriculture department. Logan Wilde, who took over as UDAF commissioner after Gibson left, sought the audit, as did Herbert’s office.

Wilde has implemented new controls and changes in procedures in response to some of the issues that occurred under Gibson to avoid a repeat. Additional efforts are underway. Indeed, the audit calls for a range of measures to assure transparency in reimbursements, to help minimize conflicts of interest and more. It also calls for reimbursement for “damages” and funds paid out to cover improper expense requests.

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