The Waterbury Democrat., 1938-05-20


 The Grand Jury is, therefore, of the opinion that payment of these items in this manner was an illegal diver sion of funds. The entry thereof was made on the books in such 8 man. ner as to make 1t appear as delib- crate attempt to conceal the true nature of the transaction. The re- port of the city's auditors for the year 1881 makes no comment what ever in connection with this diver sion.
 Not only were there illegal diver sions of funds from the Surplus Resources Sinking Fund and from the various bond funds, but the Grand Jury has received evidence of innumerable transfers, apparent ly illegal and made upon the spe- cific order of the Comptroller, with out any authority having been voted in accordance with the provisions of the charter.
 Salaries Reduced
 The Grand Jury received evidence that the salaries of the city's school teachers, firemen, policemen and other employees suffered drastic re- ductions during the very years when the city administration was making expenditures totaling hundreds of thousands of dollars to lobbyists lawyers, truckers, contractors and favored individuals, for alleged services which, in no case so far dis closed, were commensurate with the large sums paid for them. It is ap- parent to this Grand Jury that the large expenditures without appro- priation, and in excess of legally made appropriations and with il- legally diverted funds, above des- cribed, were occasioned not by any normal increase in the cost of op- erating the city's usual services but by the uncalled-for and, in the opin- ion of this Grand Jury, corrupt pay ments to the groups herein men, tioned. In his messages to the Board of Aldermen, the Mayor reiterated the need for economy in the con- duct of the city's affairs. The lan- guage of his message of January g, 1893 is typical:
 'The policy of drastic economy must and will be continued" Pos sibly this was in explanation of a ten percent reduction just ordered in all city salaries, but it remains a fact that at the very time that mes- sage was delivered, enormous sums were being spent by the city for which the Grand Jury can find no justification whatever. It is fair to conclude that if the affairs of the city had been honestly operated and audited, the burden of salary reduc- tions on city employees would not have been so heavy and the city'S needy would have fared better.
 Auditors Audited
 In view of the enormous sums which were illegally paid either without the approval of the Board of Finance or without appropriation or as an over-expenditure of appro- priation, the Grand Jury naturally turned its inquiry to the auditors who had audited the books of the city for the years 1880 to 1888. For the years 1930. 1881 and 1892, the books of the City of Waterbury were audited by Miller, Franklin & Com pany, Inc, of New York City, which firm maintained accounting offices which were in charge of MT. George H. Kingsley. Sometime in 1881, the firm of George H. Kingsley & Com pany took over the auditing work of the Miller, Franklin & Company and thenceforth the auditing of the books of the City of Waterbury was done by George H. Kingsley & Com pany. At various times from 1881 to 1888, John w. Meaney, a partner in the firm of Geoege H. Kingsley & Company, and Enoch Borgnaes, 8 certified public accountant in the employ of the firm, have been per- sonally in charge of the Waterbury work. Largely through deceptive, if not actually dishonest, audits on their part was it possible for the HayeS-Leary administration to con- ceal from the taxpayers and the public for such 8 length of time the rampant corruption in the city gov ernment. The reports of audits as rendered by them and certified to by George H. Kingsley & Company are shamefully lacking in detail. They minimize rather than emphasize the increasing irregularities in the ad- ministration of the city's financial affairs. The audit costs have in- creased from $3,587.58 paid during the year 1881 for the audit covering the year 1880 to $26,981.79 paid to the Kingsley Company during the year 1887. The audit for which the last mentioned payment was made apparently covered no more ground and was in no greater detail than the audit for which the former sum was paid. In addition, during the years 1934-1937, the City of Water bury paid approximately $22,500. to George H. Kingsley & Company for certain services" rendered by Enoch Borgnaes personally, the details of which will be mentioned hereafter. The Grand Jury has examined the auditors reports for each year of the Hayes-Leary administration and in not one has there been discovered a direct statement that all disburse- ments were proper in nature and amount, whether they were made from duly authorized appropriations or whether properly chargeable to 8 certain appropriation, nor is there comment as to the many obviously illegal transfers and the large and increasing over-expenditures. It is reasonable to expect such informa- tion in municipal audits from rep utable firms. No qualified auditor, unless acting in collision with cor rupt city administration, could pos- sibly have overlooked such irregu- larities.
 B0rgnaes Released
 So valuable had Borgnaes become to the Hayes-Leary administration d Payments
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