POLICE TREATED DRUG MONEY AS PETTY CASH FOR RIBS, TRAVEL,
TIPS

They don't take checks where undercover narcotics officers do
business, so the Memphis Police Department keeps as much as $80,000
cash locked in a vault at its downtown Organized Crime Unit
headquarters.

This bank never closes: Cash is available to officers around the clock
for "flash" money - a bankroll undercover officers can display to drug
dealers - and for buying drugs and information from the Memphis streets.

But undercover officers aren't the only MPD employees with access to
this cash. Financial records show it is used as a convenient, oversize
petty cash fund.

Cash from the vault has paid for department employees to travel the
country, has fed international police officials visiting Memphis and
funded improvements to the OCU gym.

Fees for an out-of-town golf tournament came from the fund. Ribs and
pork shoulders were purchased for an OCU cookout. And, in one
instance, $250 was donated to a drug awareness charity.

Funded by a wellspring of state and federal drug forfeitures, this OCU
bank is designed to provide officers with an accessible source of cash
to do their jobs.

During a three-year period examined by The Commercial Appeal, the
vault provided as much as $60,000 at one time in flash money and paid
out thousands of dollars in $25, $50 and $100 increments for
"introductions" and information from confidential informants.

Records show the fund also provides convenient cash for dozens of
police personnel - from ranking officials to patrolmen - for office
supplies, car repairs, tips for car washes and, in February 1996, for
drapes and pillows for one police administrator's office. Richard
McBryde, commander of police administration, said the fund has a dual
purpose: to provide cash quickly to undercover agents and cover
out-of-pocket expenses.

"A petty cash fund is something we have throughout the city . . .
small funds to use for cash disbursements just to facilitate business.
This one just happens to have more in it."

McBryde said he expected to tighten control over the fund and
confirmed Wednesday that it is the subject of a state audit.

"I don't think we've gone against the law, if you will. I think what
we've done can be justified, but perhaps we didn't do it in an easily
documentable way.''

The city's chief administrative officer, Rick Masson, said Wednesday
he had not examined the expenditures, but promised appropriate steps
if abuses are found.

"The fund was set up for specific uses,'' Masson said. "The purpose
never changed . . . . The use may have changed . . . . If those funds
were used for other purposes, we will have to determine why and what
extenuating circumstances there are."

Deputy Chief Brenda Jones, who until recently was the OCU commander,
said the practice of using the petty cash funds for a variety of
purposes existed when she joined OCU in 1991.

"I don't know that it was specifically for probable cause buys and
informants . . . . The funds were used for supply and travel,'' Jones
said. "That was past practice."

Police Director Bill Oldham removed Jones from control of OCU last
week. He also transferred OCU administrative supervisor Lt. Charles
Newell to the Central Precinct. Oldham did not comment on his reasons.

When she took command of OCU, Jones said, there was no written policy
on how the petty cash was to be used, and she did not write one.

City administrators collected 15 OCU credit cards in April after The
Commercial Appeal reported they were being used to fund travel and
make routine department purchases outside their initial purpose.

The cards, issued in the name of a fictitious company, were intended
for undercover officers, but they became so widely available within
the department that monthly charges sometimes topped $10,000.

Masson was not aware the cards existed since they did not draw on
taxpayer funds. But he has directed guidelines be established before
any cards are reissued.

Not until the newspaper filed a suit this month, however, did
administrators release records of nearly 5,000 transactions made in
cash from the drug fund since 1996.

The financial records, released this week as part of a settlement of
the newspaper's Chancery Court lawsuit, pose questions about the use
of these funds as well as the department's business practices.

On several occasions, records show the department was late paying its
monthly credit card bill, incurring interest charges and carrying
large balances. Then, the bill would be paid - in cash.

In May 1998, for instance, a patrolman assigned to the OCU accounting
office delivered $12,000 in cash to First Tennessee Bank, where the
money helped pay the credit card balance.

Several months later, the same officer used $8,191 from the fund to
obtain a cashier's check to pay the department cellular phone account.

The county's other major law enforcement agency, the Sheriff's
Department, maintains a $50,000 "flash" account. That money is never
used for any other purpose and each bill is photographed so it can be
identified later, Deputy Chief Corbett Hart said.

"We don't invade the flash money," Hart said.

The sheriff's office also operates a separate $30,000 fund to pay
informants and to use as buy money. Again, that money is available
only for narcotics investigations and is off-limits to others, Hart
said.

For MPD officers to obtain cash from the OCU fund, kept in a vault
with an electronically controlled door, a supervisor's approval and
signature is required. As the money is spent, and reports filed, the
appropriate line item in the department budget, funded largely with
drug forfeiture funds, is charged for the expense. At that point, the
cash fund is replenished.

The 5,000 cash transactions since 1996 include numerous routine
purchases - office supplies, gasoline, car washes - permissible under
city purchasing guidelines, McBryde said.

During the three-year period examined by the newspaper, cash from the
OCU fund paid a total of $5,000 for nearly 150 purchases of dog food
for department canines.

"Its just a way to facilitate the business,'' McBryde said. "We follow
the city purchasing policy. Anything up to $2,500 you can purchase
that way.''

Among other cash transactions:

Travel. Though the city has a formal travel authorization and payment
procedure, including travel advances, the cash fund is a popular
source for police personnel. More than $90,000 moved through the
account during the period to fund travel for everyone from police
officials and Memphis Mayor Willie Herenton to rank-and-file officers.

Members of the city's police review board also traveled on the drug
funds. Board members attended a 1996 conference in Canada, a $3,500
expense. The board investigates allegations of police misconduct and
complaints of unnecessary use of force.

Chairman David Acey said the city is obligated to provide clerical
help and some training to the volunteer board members.

"I didn't know where (the money) came from,'' Acey said. The board
applied to the city's public service department. "They didn't have the
money, so they found a source. I don't think they violated" rules.

Accepting money from the very police department the review board is
watching "will not affect our judgment," Acey said. "We are not
against the police. We are trying to be neutral and protect both sides.''

OCU gym. When the department made improvements to a gym for officers
at its compound on Channel 3 Drive, it turned to the vault for
funding. Records show the OCU fund, through the fake company, paid
more than $1,000 in cash for carpet, $650 for foundation work. It also
plunked down $871 in cash when Memphis Light, Gas & Water installed a
gas hookup.

Miscellaneous expenses. The fund was used to pay fees for department
employees to play golf at a conference and provided cash for tips for
people who wash and wax department cars. In 1996, it paid for curtains
and pillows for a police major's office. And, on at least seven
occasions in 1998 and '99, a department employee was paid for overtime
in cash - a total of almost $1,500.

Meals/entertainment. Cash from the vault paid for a variety of food
and meals, not just while department personnel traveled, but around
Memphis. It funded the $340 tab when the department hosted a meal for
visiting Russian police officials. It provided food for a department
business meeting, including one involving the mayor and other
dignitaries.

More than $200 in drug funds bought meat and supplies for a 1997 OCU
cookout. McBryde said such spending was justifiable as long as it was
in the pursuit of police business.

Of the purchase of ribs and pork shoulders for the picnic, McBryde
said, "That may be a little hard for me to explain.''