LANSING, Mich. (WLNS) – The man hired by the Lansing Board of Water and Light to ensure the utility was spending its money legally and wisely was fired for misusing the company’s credit card – to the tune of thousands of dollars.
In April 2023, after two months of internal investigations and less than 11 months on the job, the Board of Water and Light Commissioners voted unanimously to fire Internal Auditor Frank Macciocca for thousands of dollars of what they considered unapproved spending using a BWL credit card.
The commissioners offered Maccioca the post in April 2022 – one of three positions that report directly to the Board. He accepted in early May and began drawing a salary of $190,000 a year.
An addendum to his contract included a stipulation the BWL would cover educational expenses to brush up on auditing, continuing education classes to keep up his licenses and the membership and licensing fees associated with his professional work. The addendum also included $20,000 in transition costs to Lansing from Lancaster, PA where he worked as an attorney. The contract addendum also paid his professional association memberships and fees, including his bar memberships in Michigan, Pennsylvania and Wyoming.
On May 26, 2022 – with the approval of then-Board Chair David Price – Maccioca was issued a company credit card, referred to as a Purchasing Card or P-Card. He used that card until Feb. 21, 2023, to purchase thousands of dollars in what the board considered unauthorized food, travel and educational expenses.
An undated internal memo from BWL Commissioner and Finance Chair Dusty Horwitt laid out the findings of misuse and BWL policy violations by the auditor. Among those claims: he used the card to pay for his tuition at MSU violating the tuition reimbursement policies of the utility. The policy requires an employee to pay for tuition out of pocket, and then submit those charges for reimbursement.
The memo also points out Macciocca used the card to pay for hundreds of dollars of parking expenses and food while attending classes at MSU.
“Macciocca charged multiple meals to his P-Card when he dined alone and with his assistant,” Horwitt wrote in preparation for an April 20 meeting of the Commissioners. “These expenditures were unnecessary to conduct BWL business and appear to be little more than personal expenditures. He suggested on P-Card receipts that some meals were with Commissioners when no Commissioners were present. He charged travel expenses to his P-Card multiple times without prior authorization of travel that is required by BWL rules.”
Documents obtained exclusively by 6 News show the man hired to review spending for the BWL charged ratepayers $31,407.09 with a total of 243 transactions over just 8 months.
Among the items Macciocca charged to ratepayers were MSU graduate-level auditing classes, Cooley Law School courses, and professional membership fees, which were all part of his contract. But an 8-page internal accounting of all charges on Macciocca’s credit card obtained by 6 News shows Macciocca spent thousands of dollars in meals and drinks at restaurants that the BWL found were improper.
The un-dated Horwitt memo highlights 10 specific violations of BWL policy and BWL spending:
- June 11, 2022: not approved (meal with a colleague – Corporate Secretary)
- July 11, 2022: not approved (unauthorized travel to Chicago)
- August 11, 2022: not approved (unauthorized travel to Chicago, unauthorized MSU class)
- September 11, 2022: not approved (meal with assistant, meal associated with MSU class, meal alone)
- October 12, 2022: not approved (meal with an assistant, meal falsely implying two Commissioners – Chair James and I – were present)
- November 11, 2022: not approved (parking and meal associated with MSU class, meal alone and with an assistant)
- December 11, 2022: not approved (meal alone, meal associated with MSU class, unauthorized travel to Florida)
- January 11, 2023: not approved (meal falsely implying I was present, meal alone)
- February 11, 2023: not approved (unauthorized travel to Florida, parking associated with Cooley Law class)
- March 11, 2023: not approved (unauthorized travel to Florida, meal with assistant, meal alone)
Hundreds of pages of documents reveal the extent of Macciocca’s spending.
For instance, records show the two unauthorized trips cost ratepayers a combined $5,409.32. One trip was to Chicago. The other was to Walt Disney World Resorts to attend a conference in February 2023.
BWL ratepayers also foot the bill on $371.12 in parking, almost exclusively at MSU. And he spent $216.97 on Panera Bread food at the Broad College of Business at MSU.
Overall, Macciocca’s card was charged $3,561.18 in food expenses. That included $781.12 at the Rusty Mug restaurant and bar across the street from the BWL’s REO Town headquarters, $603.38 at Bravo in Lansing Towne Center in Lansing Township, and $141.78 at the Blue Owl Café, around the corner from the REO Town Headquarters.
“This is a particularly egregious example of a public official abusing their position,” said John Peliserro, a senior scholar at Santa Clara University’s Markkula Center for Applied Ethics. He studied local governments and ethics and reviewed the records at the request of 6 News.
For months, none of the Commissioners would respond to 6 News inquiries on this matter, going so far as to dodge our cameras and to have BWL security escort one from her car and into a public meeting at a public building.
Consistently, the appointed leaders have repeatedly declined to comment on a “personnel matter.”
“The board considers this matter closed,” a BWL spokesman told 6 News on Tuesday morning.
Horwitt, who as chair of the BWL Commission Finance Committee was responsible for overseeing Macciocca’s expenses, resigned from the Commission in July. 6 News reached out to him by email, as well as stopped at his last known address in the city only to be greeted by a message that the number his apartment listing rang to was not working.
Macciocca declined to comment for this story. He has returned to Lancaster, PA. and is employed as an attorney there.
“This is the auditor that was hired by the board to oversee the proper use of funds, and for that individual to violate the public trust should raise very important questions in the minds of the citizens of Lansing about who the proper stewards are of local taxpayer dollars,” Pelissero said.
BWL commissioners hired the Miller Canfield law firm to investigate Macciocca’s card use. The investigation, which cost the BWL another $29,390, found the former internal auditor had violated BWL policies and procedures and paid for improper items with his card. BWL has declined to release the final report citing attorney-client privilege.
With the finding in hand, the Commissioners held a special meeting and approved a separation agreement – which Macciocca did not sign – which allowed the auditor to walk away from the utility with a neutral recommendation for future employers.
Commissioners did not require Macciocca to pay the money back, nor did they refer their findings to the authorities for a potential criminal investigation.
Peliserro says the board’s failure to answer questions is unfortunate.
“I think one of the most important questions that comes up here is: Why the city and the utility board aren't being more transparent about what happened, what's being done, and why they're not trying to collect the funds that were misappropriated,” Peliserro says. “Transparency is a very important virtue. Ethical virtue that should be in place, especially in governments.”
Under our City Charter, the Commissioners of the Lansing Board of Water & Light have broad authority to hire and manage 3 staff that report directly to the Board. They hire those that they feel are best for the job, and in many cases make great hiring decisions. In this case, when they discovered the issue they consulted with legal counsel and terminated the employee. They also took immediate steps to ensure better financial oversight in the future. I am confident that they work to hold staff and each other accountable and have further confidence that they made the right moves to ensure broader financial oversight and that something like this cannot happen in the future.Andy Schor, Lansing Mayor
The BWL announced a special meeting at 5 p.m. Thursday to hire a new internal auditor.
The Commissioners will then hold a joint meeting with the Lansing City Council at 5:30. Both meetings will be at the REO Town Depot, 1201 S. Washington Ave.