The Vermont Democratic Party has filed a police report alleging that a former staff member embezzled more than $18,500 from the party over the course of six months.
Former operations manager Brandon Batham is accused of fraudulently skimming more than $15,000 through the party’s payroll system between January and June 2019.
The state Democratic Party announced earlier this month that seven instances of financial misuse by a party employee had been discovered, reaching a total of $2,938.31. A source familiar with Batham’s resignation in mid-July confirmed at that time that he stepped down related to embezzlement allegations.
A statement from the party Sunday details a broader pattern of misuse of party funds than had previously been disclosed.
A dispatcher for the Montpelier Police Department confirmed Sunday that police had opened a case, but could not speak further about its status because it remains under investigation.
The party alleges in a document posted to its website Sunday that beginning in February, Batham wrote himself additional paychecks and “bonuses” between pay periods, according to the party. The checks totaled $12,845.83.
Batham also gave himself an “unauthorized raise” in March, which totaled $2,783.28, party officials say.
In addition to the payroll fraud, Batham is also accused of skimming $2,931.38 from the party through the party’s debit card and fraudulent reimbursements. He allegedly filed false mileage reports and sought reimbursement for personal items, according to the party’s memo.
The party is reviewing an additional $500 worth of expenditures.
In his role, Batham did not have the power to sign for party finances, the party says. But he was responsible for preparing checks, processing payroll, and accounting functions.
The party’s executive director is responsible for oversight of financial operations, VDP says on its website, but also says that oversight had not worked properly in the early part of this year.
“Unfortunately, this did not happen effectively during the first four months of 2019, so the safeguards were not used to prevent these events,” the party said in a statement.
Former VDP executive director Josh Massey left his position in April after less than a year on the job. He refused to comment on the situation Sunday.
The fraud was first noticed by State Party Chair Terje Anderson, who, while serving as acting executive director, became suspicious of a reimbursement form Batham filed on June 30, according to the party’s statement.
Anderson, who became acting executive director in May, had previously sought more information about the party’s finances, but Batham had, according to the party, delayed sharing that information.
After Anderson’s suspicions were aroused, he reviewed expense forms dating back to January, and found a total of $2,931.38 in fraudulent transactions, the statement says.
Party leaders confronted Batham with a five-page document detailing their findings concerning those transactions on July 17. Batham, according to the party, admitted that he had misused the funds, stepped down from his position, and pledged to repay the money.
Alleged misuse of the party’s payroll wasn’t discovered until two weeks later, when Anderson was able to access the payroll accounts Batham had previously managed.
Batham did not immediately return a phone message requesting comment Sunday afternoon.
The party made a report to police detailing the alleged fraud on Aug. 8. Party spokesperson Christopher Di Mezzo said that though officials were prepared to announce the information publicly at that time, the party held off at the request of police.
Anderson did not immediately respond to a phone call seeking further information about the situation Sunday.
In a memo to supporters Sunday, Anderson and other party officials said it is “a difficult and painful time” for the Vermont Democratic Party.
“We will be doing everything possible to move beyond this very discouraging set of circumstances and to regain or retain your trust,” they wrote.
The party said it will work to recoup the funds.
“The Vermont Democratic Party will continue to cooperate completely with the investigation and prosecution of the case,” the party said. “We will also explore all possible avenues to legally recover the stolen funds.”
The party has made changes to its systems for financial oversight. Now the party’s treasurer, Billi Gosh, is responsible for signing checks. Gosh is also informed of all expenditures over $100.
Later this year, an external auditor will review finances of the party over the past three years, looking for potential instances of misuse and to examine the party’s financial controls, officials say.
The Federal Election Commission sets standards for internal controls that include carefully controlling credit card use, limiting the number of people signing checks and recording receipts as mail is received.
According to campaign finance disclosures filed with the FEC, the Vermont Democratic Party spent $249,754 on operating expenses between the beginning of January and end of June of this year.
The party had $77,241 in cash on hand at the beginning of 2019, and $60,757 at the end of June, according to federal filings.
