Evening star., 1903-07-22
DEFENSE OF AUDITOR
Statement by the Friends Of
Mr.. ]. T. Petty.
TREASURY AUDITING
CLAIM THAT FRAUDS MIGHT
HAVE BEEN DETECTED THERE.
Influence of Experts Report on the De-
cision Of the Commissioners
Permit Accounts.
TREASURY AUDITING

A decidedly interesting story in connec-
ton with the recent examination of affairs
in the District auditors Office by two
Treasury Department experts Is being talk
ed of today at the District building.
1t is stated by friends of Mr.. Petty that
Mr.. ]. l.. Chase. who represented the office
of the auditor for the State and other de-
partments, in the Investigation into Mr..
Petty's accounts. is the official at the
Treasury who has passed many thousands
of dollars of blind vouchers in Watson's ac-
counts and rendered settlements to the Dis
trict Commissioners in which no attention
was called to any possible Irregularities. In
one of these settlements. they say. covering
a period Of three months in the year 1892,
vouchers We're passed in which there were
represented checks TO the amount of more
than 5000. which has been fraudulently
cashed by Watson at the Central National
Bank. or wrongfully deposited in the Trad
ers' National Bank. These were treasury
checks drawn for the reimbursement of the
half-and-haf permit fund handled through
the Treasury Department
Friends of Mr.. Petty declared today that
1t seemed rather hard for the District of1-
cial to be criticised by a treasury official
who had himself detected nothing wrong
with the permit accounts. This point has
been raised all along in Mr.. Pettys behalf
that the Treasury Department officials
should have detected something wrong and
might have done SO easily as he If they
had called into question single voucher
or an item of the account. Instead of this
the permit fund was handled in manner
which indicated that nothing was wrong.
The Watson method of defalcation was
SO cunning and the method of handling
| the fund, which was prescribed by the
Commissioners, was SO clumsy, 1t is added.
%la& %14 stow, FNy 1ny,
sta ted in the treasury officials report.
There are those who claim that Mr.. Petty
should not be condemned SO harshly for
not discovering the shortage. when the
Treasury Department failed to call into
question single check cashed by Watson
at outside banks especially when these
| checks were marked and intended for pay
ment purposes only.
One Accounting Cited.
One of the settlements which was made
by Mr.. Chase in connection with the audit
ing of the accounts Of the District permit
fund, it is stated covered the period from
July 1, 1902, to September so, of the same
year. This settlement is officially known as
miscellaneous, No. 22,9s7," and was
signed by Ernest G. Timme auditor for the
state and other departments: by q. w.
Esterly. deputy auditor. The settlement
is initiated as having been prepared by
j. l.. c." stated to be Mr.. Chase OF Au-
ditor Tmme's office.
The settlement Is further initiated by
'E. T. B." who. it alleges, is Mr. Bush
nell, the chief of the division. The settle
ment states that the auditor has examined
and settled an account between the United
States and C. c, Rogers, disbursing officer
of the District of Columbia, on account of
appropriations for the permit fund, Dis
trict of Columbia.
The settlement shows that a balance Of
So 7O992 was due the United States
count of expenditures from the fund.
inr he nrtn ha
ment in question less than $S,5l212
worth of checks on the United States treas
ury We're fraudulently cashed or converted
by James NJ. A. Watson, who in the end
got away with more than $4,000 worth Of
Districts funds
An Itemized Statement.
The checks passed by the Treasury De-
partment during the period covered by the
audit prepared by Mr.. Chase, and which
represented a goodly portion Of the Watson
stealings, are as follows
Audit 4959S, check 1854. dated July A.
| 1902, for s1,197.75. Cashed at the Central
National Bank. July Is. 1902.
Audit 51241, check 1i6lVl, dated August
30. 1892 for s1,412,2s. Cashed at the Cen
tral National Bank, August %, 1902
Audit ol41s. check 147430. dated August
26. 1902. for s2,o75so. Misdeposited in
Traders National Bank, September >, 1902
Audit 515S6. check 14742S, dated August
81, 1902. for 81 10. Cashed at the Central
National Bank, September =, 1902.
Audit $3.50 check 14S}5S, dated Septem-
ber 20, 1902. for 81 So. 50. Cashed at the
| Central National Bank, September %, 1902.
The above enumerated audits were what
| is known as blind audits." There was
nothing in them giving the details of the
| expenditure. Mr.. Pettys friends claim that
| had one of these blind aud!ts been called
| into question, instead of beng collectively
| passed by the Treasury Department, then
| there would at least have been no loss of
| the $4,000 and more that is alleged to have
been taken by Watson, and which is MISS
| ing from the half-and-half permit fund,
| participated in by the United States, the
District of Columbia and property owners
Influence Of Experts Report.
1t has been stated that the report of the
| treasury experts has had much to do with
determination that Mr. Petty cannot serve
as auditor.
In view Of this statement Mr.. Petty's
| friends are disposed to call attention to
! the fact that the treasury experts them
| selves failed utterly to discover anything
| wrong with the permit fund accounts and
| did not question a single treasury check
| cashed at the banks over Mr.. Pettys In
| dorsement auditor.
OF course, the treasury had nothing to DO
| with the whole cost funds, which were
| handled entirely by the auditor. The
| failure of the treasury, however, to find
! any fault with the half-and-half fund,
| and the connection Mr.. Chase had with
and afterward in criticisng the District
auditor for loose methods forms OF
| the many interesting chapters in the pres
ent District tangle.