SHERIFF, DA OFFICES DISAGREE OVER FILING OF FORMS

A Knox County sheriff's narcotics officer testified this week that the
department has not filed a required annual report detailing how much money
it gets in drug-related seizures and how it spends those funds.

"(It's) a document we are supposed to have been doing," Sgt. David
Henderson testified, before adding that he didn't know about the
requirement until a few weeks ago.

His Tuesday testimony came during a hearing before Knox County Chancellor
Daryl R. Fansler in Commissioner Wanda Moody's ongoing legal dispute with
the Sheriff's Department over what she contends is misuse of funds.

But on Wednesday the department said it has been submitting the required
annual forms to the district attorney's office - while the district
attorney's office said the Sheriff's Department has not.

"To the best of my knowledge they haven't been filed," Leon Franks, an
assistant district attorney who handles drug prosecutions, said Wednesday
before adding, "I don't know why they haven't been filed."

According to the district attorney's office, the only time the sheriff's
office has filed the report was for 1994.

Martha Dooley, a spokeswoman for Sheriff' Tim Hutchison, countered by
saying in a release Wednesday: " the Knox County Sheriff's Office does file
the required annual report to the District Attorney's Office. Last year's
report is still being prepared and will be submitted in the near future."

The expenditure of the seized assets - which total hundreds of thousands of
dollars a year - has been a battleground between Moody and Hutchison. Moody
contends the sheriff uses the funds for things like the department's six
helicopters, horses and building projects without the County Commission's
approval.

Moody and her attorney, Herbert S. Moncier, also contend that documents
they have received through a public records act lawsuit indicate more than
$500,000 in checks to cash and withdrawals have been made from narcotics
bank accounts with little documentation about the money's use. Hutchison
has said that money was used in narcotics investigations and that every
penny has been accounted for. The sheriff's office is audited each year by
a public accounting firm.

There has never been a finding, or even an allegation, of missing funds.
The Knoxville Police Department also has not been filing the report -
required of all law enforcement agencies by the Tennessee comptroller of
the treasury - though it does file its annual drug fund audit with the
state comptroller and with the U.S. Department of Justice. Police spokesman
Darrell DeBusk said the department would begin filing the report with the
district attorney if that is indeed required.

Since 1997 the sheriff's office has been embroiled in a fight with the
independent auditors over how it maintains its accounts involving
drug-related forfeitures and expenditures.

Among complaints cited by the accountants are the use of narcotics unit
accounts for "non-confidential expenditures" and "deficiencies in the
maintenance of the records and related controls over confidential funds."

"It has been well reported that the sheriff expends a significant amount of
funds through banks accounts maintained by his office and expends those
funds without going through the county's budgeting and purchasing
processes," a March 15 state comptroller's office document states.

Each year the sheriff's office has responded that it adheres to the
requirements of state law and the state comptroller's regulations, which
require filing the annual report with the district attorney's office.

Henderson's testimony came during a hearing in one of Moody lawsuits, which
are dubbed Moody I, II and III, and date back to 1999.

At issue Tuesday was an additional public records act request by Moody
seeking bookkeeping documents recording payments in closed drug cases.

The Sheriff's Department balked, arguing that such documents could reveal
the names of confidential informants or undercover drug agents.

Dooley contended Wednesday that Moncier's real goal in obtaining the
documents was to discover who the department's confidential informants are
to "use that information for the benefit of his clients."

Moncier, however, said during the hearing that some of the documents don't
contain a place for names; they just detail financial transactions and said
any names could be redacted.