They simply trusted her.

They simply trusted her.

Even after Rita Crundwell bought the $2.1 million motor home. Even after her herd of fine quarterhorses grew to more than 300 animals. Even after she bought semi-trailers worth hundreds of thousands of dollars. All in her role as the $80,000-per-year comptroller and treasurer of Dixon,Illinois.

The well-liked Crundwell,59,allegedly has stolen $53 million in more than 20 years from her hometown of Dixon,from a city budget that annually never has reached $10 million.

I was in Dixon the other day for another purpose,yet I had time to nose around a bit for a possible column,although folks I talked with at Books on First Street and a barbershop were a little reluctant to talk for the record.

There are lessons for all governments in the charges leveled by the U.S. Attorney’s Office for the Northern District of Illinois. First,a little background.

Rita Humphrey graduated from Dixon High in 1971. She made the National Honor Society her senior year (one of 19 in a class of 331), was elected senior attendant in the 1970 homecoming court,and served as president of the Office Occupations Club. In high school, Rita interned with the Dixon city government and stayed on after graduation.

By 1984 she was selected by the city commissioners to become Dixon’s comptroller and treasurer.

Rita married a man named Crundwell and lived modestly throughout the 1980s. They divorced in 1986; no children. By the 1990s her participation in the quarterhorse world accelerated.

In 1990,Rita Crundwell also created a secret city account into which she allegedly began transferring city receipts,spending from the account to support her rapid rise up the rungs of the national quarterhorse world.

The attractive Crundwell became the best in the American Quarterhorse Association,by 2011 having won “best owner and exhibitor” eight years in a row.

All that takes big money in an activity known notoriously as a money pit. Horses are expensive. A horseman I know estimates that a fine equine specimen costs around $300 per month to feed,bed,see a veterinarian. That means more than a million dollars per year just for the upkeep of her 311 horses,not counting labor.

To feed her ever more expensive habit,which included frequent wining and dining of fellow quarterhorse aficionados in her Florida vacation home,and apparently $300,000-plus in jewelry paid for by the city,Rita’s rate of theft apparently increased. She is alleged to have stolen $3 million from the city in just the sixmonths prior to this March 31.

While Rita was away on vacation last year,city clerk Kathe Swanson filled in for her and discovered the secret account. She and Mayor James Burke took the evidence to the FBI,and kept their secret for sixmonths while the FBI investigated —and Rita continued her thievery.

Dixon is a picture postcard city of 16,000 nestled along both sides of the broad Rock River in Northern Illinois. A statue of favorite son Ronald Reagan graces one side of the riverwalk and that of A. Lincoln the other. Townsfolk fish beneath the Ronald Reagan Bridge,just a stone’s throw from downtown Dixon.

The citizens of Dixon seem angered and embarrassed,worried maybe that their fine community will be mocked for being led by rubes who can’t notice $53 million missing dollars. And fingers are being pointed.

The city manager of neighboring Sterling said he noticed negative fund balances in Dixon and raised red flags with unnamed Dixon officials. Outside accountants are admonishing the city’s auditors for not calling for a listing of city bank accounts.

This isn’t the first such major embezzlement in Illinois. In 1959,state auditor of public accounts Orville Hodge stole $1.5 million from state accounts; he spent eight years in the hoosegow for the privilege. Similar to Crundwell,he was at the time responsible for both the pre-audit and the post-audit.

What to do? Dixon already has instituted some redundancy in its financial system,requiring more than a single signature on checks,for example.

Now it needs to shed the commission form of government and replace it with the more professional council-manager form. In a commission government,five commissioners are elected to be both the executive and the legislative branches of city government. Each commissioner is given a portfolio to manage, such as finance,public works,and public safety.

Unfortunately,most elected commissioners are amateurs when it comes to their portfolios. As illustration,the previous finance commissioner for Dixon in 2011 praised Crundwell in his departure speech for watching vigilantly over every dollar of the taxpayers’ money.

As Dixon’s own Ronald Reagan said so famously,”Trust,but verify.”

7 thoughts on “They simply trusted her.

  1. If the government of small-town of Dixon, Illinois, with a population of 16,000, can lose $53 million, it makes one wonder about the possibilities for the federal government’s mishandling of monies. We read about Fast & Furious, Solyndra, et al … stimulus money spent to repair unused federal buildings and build tunnels under the road for turtles… Why does anyone still trust Congress, government and the media?
    Did you know we are one of the few industrialized nations that doesn’t require food companies to inform the public if their product is genetically modified? The FDA is presumably influenced by ?? Congress who is presumably influenced by the huge corporations who make more profit when they genetically modify produce. Labels informing consumers about genetically modified foods are common throughout the world. Will the US adopt them as well? http://tinyurl.com/723bukd
    We the people are paying taxes but we are not being represented.

  2. $300 a month? Try again your friend must not have the finer things in the equine world it costs over a thoussnd a month per horse at the meri j.

  3. KatieNCharlotte has [have] it exactly correct. We live in a plutocracy where fraud and corruption is ubiquitous. I do not completely agree with the blogger, 59million, that this was simply was a matter of trust. Trust is a consciously active behavior that requires reasoning (rational or irrational). Trust is not passive.

    This crime went unnoticed for so long because most of us have become zombies (i.e. we simply go through the motions of our jobs and are not willing to roll-up our sleeves and get our hands dirty — we do not even bother to care). The few of those who may have been suspicious did not want to upset the status-quo because it may put themselves at risk. And, of course, others may have been active participants in this crime (hush-money, etc).

    Wake up people! It is not difficult to see when things are not adding up [insert here any of your economic cliches, such as, “no free lunch”]. You simply have to care about doing your job. What is difficult is getting others — including the authorities — to act on it. In other words, it is difficult to WAKE UP THE ZOMBIES that are all around us!

    Greater frauds are occurring all around us at this very moment.

  4. How in the world could you not wonder about a woman making $80,000 ayear and leading a lifestyle like this? They were in awe of her–kind of like a rock star. If she was nice to them, they loved it. Good God! When will people stop worshipping the rich and giving them a free ride on everything. The town officials should be embarrassed to death. Bernie Maydoff anyone?

  5. The federal government is under no obligation to release mugshots of accused criminals under the Freedom of Information Act, even though many states and localities routinely make such booking photos public, a federal appeals court ruled Wednesday.

    The U.S. Court of Appeals for the Tenth Circuit’s decision, issued by a unanimous three-judge panel, rejected a request by the Tulsa World for the booking photos of six individuals who were indicted by grand juries and processed by the U.S. Marshals Service. The ruling was a victory for the Obama administration, which has pledged to be more open than any previous one, but has staunchly defended the federal government’s longstanding non-disclosure policy for mugshots.

    “There is little to suggest that disclosing booking photos would inform citizens of a government agency’s adequate performance of its function. We agree with the district court that ‘disclosure of federal booking photographs is not likely to contribute significantly to public understanding of federal law enforcement operations or activities,'” appeals court Judge Paul Kelly Jr. wrote on behalf of Judges Bobby Baldock and Timothy Tymkovich.

    The decision (posted here) leaves the federal appeals courts split, 2-1, on the issue. The Tenth and Eleventh have held mugshots exempt from FOIA and the Sixth found them subject to release under FOIA. The Sixth Circuit’s decision has led to an odd practice which has somewhat swallowed the federal government’s rule against disclosure. If a requester in a Sixth Circuit state asks for a mugshot, the Marshals service will release it and subsequently will release it to anyone. Many national news organizations now employ stringers in Kentucky, Michigan, Ohio, Tennessee to request such photos for nationwide use.

    In the decision Wednesday, Kelly rejected the Sixth Circuit’s view that releasing booking photos involved no invasion of privacy. And he dismissed the Tulsa newspaper’s arguments that they could reveal abuse of prisoners.

    “There is little to suggest that releasing booking photos would significantly assist the public in detecting or deterring any underlying government misconduct….For example, a booking photo may indicate just as much about pre-arrest conduct of a detainee as post-arrest conduct by law enforcement. There is also little to indicate that the release of booking photos would allow the public to detect racial or ethnic profiling without more information, and profiling has not been alleged here,” Kelly wrote.

    Kelly left open the possibility that specific mugshots might be required to be disclosed under certain circumstances, but he rejected arguments that technological developments in recent years favor disclosure.

    “While Tulsa World argues that the privacy interest in a booking photograph is diminished because ‘there has been an explosion of camera phones and video which allow persons to be photographed . . . at any time,’…this argument cuts against its position. Given easy access to photographs and photography, surely there is little difficulty in finding another publishable photograph of a subject,” he wrote.

    It is unclear whether the Supreme Court would take up the issue if the Tulsa World asks it to do so. Last month, the court declined to consider a Florida case raising the same issue.

    Read more about: Transparency, Privacy, Justice Department, Newspapers, Freedom O

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