Among the many business items on the Morton City Council’s agenda for its monthly meeting on Monday, April 28, were several items brought about as continued fallout from the nearly decade’s worth of embezzlement allegedly carried out by former Morton Clerk-Treasurer Tamara “Tammy” Clevenger.
Based on recommendations made by the Office of the Washington State Auditor, the council amended Morton’s city codes concerning cash management, receipt filing and depositing.
Clevenger is now facing federal wire fraud charges in connection with the embezzlement in which a total of $937,548 was stolen from the city during her time as clerk-treasurer from 2012 to 2022. The charges were announced last week by Acting U.S. Attorney Teal Luthy Miller.
Additionally, the council also approved dipping into the city’s Local Government Investment Pool (LGIP) funds to pay additional auditing fees that resulted from the State Auditor’s Office investigation into the embezzlement.
“We have a $100,000 bill for the auditor … The auditor’s office is not being kind in repayment plans,” Morton City Clerk LuAnn Ward said during Monday’s meeting.
Originally, the auditor’s office was demanding the fees be paid within six months, which Ward negotiated to a year. But even with that extra time, given the financial hole the city is still in following the embezzlement, Ward stated paying the fees in a year would have still bankrupted Morton.
“We have an LGIP account, which is an emergency savings account. After lots and lots of work, balancing the numbers and doing all kinds of math every which way, we felt like taking the money out of the LGIP account and paying it off that way was in the best interest of the city,” Ward said.
She added the payment uses approximately half of what the city has saved in its LGIP account so far. Ward also said the city will slowly set aside money in the future to refill its LGIP account, and if Clevenger returns any of the embezzled funds, those will go into the LGIP account as well.
These extra fees come as the City of Morton is currently in a legal battle with its insurer — the Association of Washington Cities Risk Management Service Agency — over the denial of the city’s insurance claim to cover the embezzlement losses.
While city staff filed their claim in order to cover the full amount of losses incurred by the city from the embezzlement, the Association of Washington Cities Risk Management Service Agency claims it can only provide Morton with $21,000, according to Ward.
“Obviously we’re working on that to see if we can get more, but right now that’s all they’re agreeing to pay,” Ward said.
Morton City Attorney James Buzzard has already been fighting the insurance company’s claim denial in court.
“I recommend the city find specialized counsel that deals directly with insurance companies on a regular basis to fight this stupid denial,” Buzzard added during Monday’s meeting.
Following the meeting, he explained the Association of Washington Cities Risk Management Service Agency is essentially cherry-picking which parts of the city’s insurance claim it actually considers fraud losses.
Clevenger allegedly stole money through a variety of methods, according to charging information from the U.S. Attorney’s Office.
Between February 2013 and December 2021, Clevenger allegedly stole at least $625,857 by writing checks to herself and depositing them in her bank account.
She also allegedly used checks that had been pre-signed by the former mayor for use in emergency situations. Morton’s current mayor, Rick Mead, was elected in 2023. Additionally, fake vendor invoices were used to make it appear the checks had been written for a service rendered to the city.
Between November 2015 and December 2021, she allegedly stole at least an additional $311,727 straight from Morton residents’ payments for city services and also made unauthorized cash withdrawals using the city’s ATM card.
Clevenger’s actions used interstate wires to commit the fraud with the transfer of funds between various bank accounts. One example is the transfer of $5,808 in funds from Washington to Umpqua bank servers located outside the state.
Both the FBI and IRS assisted with the investigation, and if Clevenger is convicted, wire fraud is punishable by up to 20 years in prison.
Clevenger is the second former City of Morton official to be charged within the last year for financial fraud committed during their employment in Morton.
Former Morton Police Chief Roger Morningstar was charged Dec. 18, 2024, in Lewis County Superior Court with two counts of second-degree identity theft and one count each of third-degree theft and abuse of office for allegedly using a city credit card to make unauthorized personal purchases between June 19, 2022, and June 10, 2023.
Morningstar has pleaded not guilty to all charges, and trial is scheduled to begin on May 6.
Morningstar, who was hired as Morton’s police chief in 2016, resigned from the department in lieu of termination on June 2, 2023, after he failed a polygraph exam related to an internal investigation into complaints of sexual harassment, misused public funds and untruthful statements on his application to the department.
Before his resignation, he had been on administrative leave since the City of Morton opened its internal investigation on May 15, 2023.
The Washington state Criminal Justice Training Commission revoked Morningstar’s peace officer certification on Dec. 6, 2023, after he failed to request a hearing to defend against the allegations.
