Ferries chief tells all, is fired

On the job only 2 months

Staff WritersJuly 2, 2010 

  • 2.5 million: Passengers last year

    500: Ferry division employees

    21: Vessels

    7: Routes, crossing the Pamlico and Currituck sounds, Hatteras Inlet, and the Cape Fear, Neuse and Pamlico rivers.

    6: Percent of operating costs covered by passenger tolls.

    Source: N.C. Department of Transportation

In two months of running the state Department of Transportation's ferries, Harold "Buddy" Finch says he ran into nepotism, payroll padding and questionable spending. He brought it to the attention of the department's top officials and its inspector general.

They launched an investigation - and fired Finch for not being a team builder.

Finch, 58, is a career Coast Guard officer who came out of retirement May 1 to lead a division battered by a federal investigation into illegal dredging in Currituck Sound. The former division director was convicted of lying to investigators.

Finch said he was told his hiring to the $92,500 job was part of an effort to get the division back on track, but he said his firing June 25 shows the DOT lacks the courage of its convictions. "I thought I was brought in to fix it, but I guess I tried to fix too much," Finch said.

Finch's allegations came just after state lawmakers passed a $19 billion budget that cuts many agencies, but increases the ferry division's take by 35 percent. The division will receive $43.5 million, up from $32.2 million in the fiscal year that ended Wednesday.

DOT officials said they encouraged Finch to report problems within the ferry division, which is based in Morehead City. Several of his allegations remain under investigation by DOT's inspector general, they said.

They said they fired Finch because of personality conflicts with staff. They also said he had fallen behind on a 60-day business plan for the division.

"In the end, was Buddy going to be able to meet the expectations that I gave him for this job?" said Jim Trogdon, the DOT's chief operating officer. "My determination was no."

Money sent and spent

The ferry division operates nearly two dozen boats on seven routes across coastal rivers and sounds, transporting 2.5 million people a year, many for free. It's the second-largest state ferry operation in the country.

Finch said that one of the first things he found upon taking the job was that the 500-employee division had no detailed budget. An assistant director, Charlie Fearing, told him that the division simply received money from the state and spent it. Finch said he ordered his staff to begin drawing up projected expenditures for the coming fiscal year.

Trogdon and Jim Westmoreland, a deputy DOT secretary in charge of the ferry division, disputed Finch's claim.

State lawmakers give it some credence. They said the division underreported its actual spending in recent years, and the additional $11.3 million this year reflects the division's true needs.

"In the past, [the extra money was] being moved from other portions of the DOT budget," said Rep. Grier Martin, a Raleigh Democrat who helps oversee the transportation part of the state budget. "Obviously, that's not the way we expect state agencies to budget. And we commend DOT. They're the ones that identified the problem and came forward and brought it to us."

Finch raised questions about whether the division is spending its money wisely. He found that it spent $3.5 million last year on overtime, more than 10 percent of its total budget. He said that Fearing's assistant, Tanya Neeland, claimed more than 113 hours of overtime in a four-week period.

Finch said that Fearing had gotten Neeland's husband, William, hired and that he was listed incorrectly on the division's payroll. State personnel records say he is assigned to the Currituck terminal, but Finch said he instead works out of the division's shipyard in Manns Harbor, where Neeland's wife also works. Finch said spouses working together violates division rules. Fearing also hired Tanya Neeland's sister for a temporary job.

Fearing, Neeland and other division employees referred questions to the division's public information officer, who is on vacation and could not be reached.

Oversight called lax

Finch also saw that spending on a $563,000 contract to clean up dredging material from the Southport terminal was showing costs approaching $1 million. Fearing and Neeland were managing the cleanup, and other contracts totaling millions of dollars, without appropriate oversight, Finch said. He also said Fearing made improper purchases on a state credit card, and Neeland was allowed to approve time sheets for herself and her husband.

Trogdon and Westmoreland said no money was misspent on the Southport contract; the overage was merely a bookkeeping error. They said Finch's claim regarding the contract illustrates one reason he became disliked among staff: He shot from the hip with allegations of misspending and cronyism that he had not verified.They said that the overtime, personnel moves, credit card charges and other financial transactions are getting serious scrutiny.

"We'll keep investigating, and we'll get answers and we'll take appropriate action," Trogdon said.

Finch said that's all he's asking. He doesn't want the job back.

News researcher David Raynor contributed to this report.

dan.kane@newsobserver.com or 919-829-4861

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