http://www.timberjay.com/current.php?article=819

State auditor asked to investigate Dill conflict
By Marshall Helmberger

A Duluth-based group has asked the Minnesota State Auditor to investigate conflicts of interest and possible mis-use of public money by the Voyageur Trail Society and the city of Orr.

Minnesotans for Responsible Recreation (MRR) alleges in a complaint filed with the auditor on Tuesday that State Rep. David Dill engaged in a conflict of interest when he served as head of the VTSI while simultaneously serving as administrator for the city of Orr, which served as VTSI’s fiscal agent for state snowmobile trail grants. The complaint also cites documents that indicate Dill received a substantial salary from VTSI in addition to a $5,000 cash bonus in 2001, health insurance coverage totaling over $5,000 a year, and a $1,500 annual mileage allowance. Dill also received reimbursement for use of his airplane for club business, at the rate of approximately $140 per hour. The complaint cites documents that suggest Dill received at least $39,000 in 2001, and possibly more, from VTSI, which was primarily funded through state trail grants and pull tab operations.

The complaint also questions annual payments of $5,000 from VTSI trail grants to the city of Orr and the Orr American Legion. City officials have given various accounts of the reason for those payments. In public statements on the allegations this week, Dill stated that the money was used for economic development projects. The facts surrounding that payment are unclear, although the club recently requested repayment of last year’s payment of the money, because Dill was currently on leave from his city administrator job. Orr council member Jim Holman said he couldn’t remember the specifics of the arrangement. "It would all be in the minutes," he said.

The complaint also raises questions about the accuracy of reports the club filed with the Internal Revenue Service. "While the Voyageur Trail Society appears to employ David Dill and four other members, the Voyageur Trail Society reported no payroll tax on its 2001 IRS 990 form," stated the complaint. The VTSI reported net revenues of $152,822 in 2001, the most recent year for which reports were available. Of that, approximately 60 percent came from state grants while gambling operations netted about $65,000. The same report, however, lists only $34,784 in compensation, and reported paying no payroll taxes and only $1,500 in employee benefits, a figure which would not appear to account for Dill’s health insurance benefits.

MRR Executive Director Jeff Brown stated that Dill’s position as a paid trail administrator and program manager with the club, while also serving as the administrator for the city which was charged with overseeing the club’s operations, was an apparent conflict of interest. He cited a 2003 report by the legislative auditor, which recommended that local governments that sponsor snowmobile clubs be prohibited from assigning oversight responsibility for trail grants to a government official who simultaneously serves as an officer or bookkeeper for the grant recipient.

"For someone who regularly boasts that he is a snowmobile club ‘volunteer,’ it is surprising to see just how much personal financial gain Rep. Dill has enjoyed over the years as trail administrator of the Voyageur Trail Society snowmobile club," said Brown.

According to Brown, his complaint is part of his group’s ongoing effort to track the use of public money through the state’s grant-in-aid program, which annually provides several million dollars in funding to snowmobile clubs and related organizations across the state. "Some club members have come to consider these funds a source of personal income," said Brown.

Besides his current focus on VTSI and the city of Orr, Brown has been gathering information since January on St. Louis County’s activities as fiscal agent for dozens of similar clubs. Brown said he began his research after the St. Louis County Board okayed conversion of portions of the North Shore Trail to ATV use. Brown said Dill worked behind the scenes to influence the board on behalf of ATV groups.

MRR’s complaint comes while legislation the group is sponsoring is under consideration in the Minnesota Senate. That bill, SF 2761, would provide increased oversight and accountability in the public funding of snowmobile and ATV groups. It also calls for implementation of other recommendations contained in a 2003 legislative auditor’s report on the grant-in-aid trail funding system.

Holman said he couldn’t predict if the Orr City Council would cooperate with an investigation by the state auditor. "We’ll have to wait until our next meeting," he said. The council next meets on April 12.

Neither Dill nor a representative of the VTSI contacted for comment on this story had returned phone messages prior to deadline.