CITY COLLECTS MPD'S COVERT CREDIT CARDS

It was by design a covert operation: credit cards issued to
undercover Memphis Police Department narcotics officers in the name of
a fictitious company, their monthly bills paid with drug forfeiture
funds.

Even the city's chief administrative officer knew nothing of
them.

But after learning the cards were used not just for undercover
operations but for tens of thousands of dollars worth of airline
travel, hotels and restaurant meals, city officials took action.
Monday they collected 15 credit cards from MPD officers and
administrators and said none would be reissued until strict spending
guidelines were adopted. That was expected to take a week.

CAO Rick Masson said he was not only surprised but also concerned when
he discovered the cards were widely used to purchase items outside
normal city government channels.

"I don't think I can say, across the board, there is one reason for
doing this," Masson said Monday. "Once you stray from the original
purpose of the cards, then I think it got to a point where it was
convenient to use those cards, and I think they just weren't using
their heads."

He did not question the legitimacy of the expenditures, just the
method, which bypassed normal procedures.

"There is no reason in the world for those cards to be used for
travel."

The Commercial Appeal reported Sunday, however, the cards had been
used to finance travel for officers and administrators to dozens of
cities, apparently for seminars and conferences. Combined, airline
tickets, out of town hotels and restaurants, made up the single
largest portion of more than $150,000 in charges during a three-year
period.

The newspaper reported the cards were so widely used that even the
wife of former MPD director Walter Winfrey charged items at a Sun
Valley, Idaho, ski outfitter. Winfrey said he reimbursed the fund for
those and other personal purchases.

Masson said Winfrey's successor, Bill Oldham, would be among those who
will establish guidelines for future use of the credit cards. He will
work with his finance director as well as City Finance and
Administration Director Roland McElrathin setting the guidelines.

Masson said it was the department's practice to store the credit cards
in a safe, then issue them to employees as they were needed. He said
the cards would not be redistributed until those new guidelines were
in place.

"There is a legitimate need, apparently, for the cards so we don't
want to overreact and throw the baby out with the bath water," Masson
said.

"What we're trying to do is to determine who should properly have a
card, what the procedures will be for the cards, what will be eligible
expenses associated with the cards."

The department's Organized Crime Unit receives roughly $2 million in
state and federal drug forfeiture funds every year. The funds are
restricted only for "law enforcement" but cannot be used to pay
salaries. A portion of that money was going to pay the monthly charge
card bills.

Masson said he was aware that forfeiture funds made up a substantial
portion of the OCU budget but was unaware of the fictitious company
and its credit card charges.

He said reforms were not intended to deter undercover officers from
their jobs but to assure the public that money was being spent
appropriately.

"One of the clear objectives of financial controls is full disclosure,
and in undercover operations you don't want that. So it's delicate in
terms of finding adequate controls but at the same time not
compromising any undercover operation."