“My wife works for the county auditor, and she’s a member of the project team that’s working on this new project,” he said. “The oversight for this project is the county auditor, and the office of management and budget and the contract is between the board of county commissioners and the vendor. There is no conflict of interest on my part.”
“I don’t work for the treasurer,” said his wife Katie Joseph. “I work for the appointing authority that is the auditor.”
McManus has made the allegations as Montgomery County voters will choose between the candidates in the Nov. 3 election.
Because he is treasurer, Joseph is a member of the county’s data processing board. The board has 10 members from nine county offices. The board is responsible for approving the “purchase, lease, operation, or contracts for the use of any automatic data processing or record-keeping equipment, software, or services without prior approval of the board,” according to the county’s website.
One of the largest expenditures to come before the data board in recent years is an overhaul of the county’s finance system. Katie Joseph works in the county auditor’s office and is one of the project managers along with an employee of the county commissioners.
Data processing board minutes show in March 2018 Russ Joseph abstained from voting on a $4.3 million contract with a company to implement the new software. Katie Joseph was listed as one of the project managers. Russ Joseph was on the board at the time because he was the county clerk of courts.
Russ Joseph said he abstained from that vote as clerk of courts “out of an abundance of caution.”
“As treasurer, currently it is my duty to make sure that the finance project for the county is going to be successful," he said.
After Russ Joseph lost his 2018 election to Mike Foley he was appointed to the open county treasurer’s position by the county Democratic Party. He then voted on several change orders on the project, which was delayed by a year and its cost grew to more than $6 million.
In June 2020 before the board unanimously approved a $314,800 change order to the project, Russ Joseph “wanted to note a special thanks to (the other project manager) and Katie Joseph for thoroughly going through the scope to make sure we are getting what is really needed,” according to board minutes.
Most recently in September the data processing board unanimously approved $274,577 for software licenses for the program to go live in January 2021.
“I think it’s a clear abuse of power for an elected official to steer millions of extra dollars to a government project managed by his spouse,” McManus said “It’s even more disappointing that these votes came from the county treasurer, the one person charged with protecting the county’s tax dollars.”
Katie Joseph said the March 2018 vote followed two years of soliciting and reviewing vendor proposals and the effort of a 16-member project team. She said the role of the data board is to approve the technology. The actual expenditure of county funds is a separate vote by the county commissioners.
“(County commissioners) are the ones that appropriate the money and make the cash available to actually execute the contract and they’re the ones that sign the contract with the vendor,” Katie Joseph said.
The data board has members from both parties, including Republican Clerk of Courts Mike Foley — who McManus works for as chief deputy.
“I don’t think it’s right for any elected official, much less the county treasurer, to vote to give his wife an additional two million dollars in taxpayer money,” Foley said. “It’s a clear conflict of interest. With public funds, there has to be accountability attached to those dollars. Who is really going to believe that an elected official will hold his wife accountable if a project goes awry?”
Foley said he was “a bit shocked” Russ Joseph didn’t abstain, but said he never raised the issue before to Russ Joseph or other members of the data board.
Republican county Coroner Kent Harshbarger, vice chair of the data board, said he was unaware Russ Joseph’s wife was project manager on the program, but is not critical of it.
“Every member is free to abstain,” he said. “I believe the vote was unanimous so Russ participating or not is sort of a moot point.”
Harshbarger said he has expressed concern about delays and increased cost on the project, but he was satisfied with the answers he received.
Montgomery County Auditor Karl Keith, a Democrat, says the financial system overhaul is a massive project with many more decision makers than Russ Joseph and Katie Joseph — who works for him.
“All these change orders have been properly scrutinized and authorized,” he said.
“Usually if there’s a conflict or anything like that someone has some personal stake in it. There’s no personal stake here in any of this,” Keith said. “There is no conflict of interest here.”
Keith said the financial system overhaul was expected to cost $7 million or more, so even with the change orders is still within budget.
“It is a huge undertaking," Keith said. "This is one of those systems that the county replaces once in a generation because of how widespread it is, far reaching it is, so it’s not something that hasn’t gone through a lot of scrutiny and continues to be scrutinized and a lot of people are overseeing this.”
Katie Joseph said the launch of the new financial system was pushed back from this year to next to make sure it was done right.
“We were anticipating that by the time we were done with the implementation that we would probably spend between $7 million and $10 million on the new financial system and we’re still under that,” she said.
But Foley said the project “has been chronically mismanaged. Over $2 million of taxpayer dollars have been wasted because no one has been held accountable. Nepotism is a real problem in Montgomery County government, and this is just one example of how such a culture leads to waste, fraud, and abuse.”
Montgomery County Recorder Brandon McClain, chair of the data processing board and a Democrat, said that the votes on the project – like nearly all votes on the data processing board – were unanimous.
“There has never been a time when Russ Joseph’s vote would have been consequential, because all we require is a simple majority and measures are being passed without any objection or abstain,” he said.
McManus remains critical of Russ Joseph’s actions.
“It’s because of situations like this that our taxes are so high in Montgomery County," he said. "Residents are being asked to pay for this, and now we have another tax increase next year to pay for more. We deserve better than this.”
Keith said that if McManus was concerned about these contracts he works for Foley - who also sits on the data board and voted for the change orders - and should take it up with him. “If he’s got a problem with it he should talk to his boss,” Keith said.
Ohio ethics law prohibits a public official from “participating in any decision, or using a public position to secure any decision, that affects the continuation, implementation, or terms and conditions of a family member’s employment,” according to an information sheet released by the Ohio Ethics Commission.
Cases called out by the ethics commission usually relate to an official voting on matters impacting a family member who works in the same agency the official oversees.
Ohio Ethics Commission Executive Director Paul Nick would not comment on the propriety of this specific case, but said in general: “There’s a potential for conflict of interest if an official is acting on matters that could affect their spouse’s employment.”
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