BUFFALO, N.Y. (WIVB) — A new independent forensic audit searching for more missing money or evidence of criminal activity from the Erie County Clerk’s Office did uncover internal control problems and some inconsistencies in money transfers.
But the auditors with Weaver and Tidwell LLP did not find evidence of additional criminal activity after former deputy clerk Alexander J. McDougall pleaded guilty in August 2024 to grand larceny in the second degree and offering a false instrument for filing in the first degree. McDougall embezzled more than $320,000 from the clerk’s office to pay his rent and other personal expenses, and is serving a sentence of 1 1/3 to 4 years in prison.
The 74-page report by Weaver and Tidwell LLP still stirred the pot by including two cryptic emails McDougall sent to himself in 2022, with the subject headlines “extortion money” and “Mickey’s extortion money,” believed to be a reference to Erie County Clerk Michael “Mickey” Kearns.
McDougall sent himself the emails with no attachments or anything written in the body of either of them, leaving people to wonder and guess what they could have meant. And the rumors swirled. The two emails are part of nearly 800 McDougall sent to himself, all of which the auditing firm reviewed.
The firm mentioned the two ‘extortion’ emails on page five of the report, and suggested they may warrant another examination, which would be the fifth since 2023. The Weaver and Tidwell report cost taxpayers almost $170,000, which Kearns deemed a waste of taxpayer funds because the report, for the most part, only confirmed the findings in other audits and law enforcement investigations.
Publicizing the emails in the auditing report created another dark cloud over the Erie County Clerk’s Office, which has been under scrutiny since the county comptroller uncovered missing funds more than two years ago that led to McDougall’s arrest and conviction.
During an interview Thursday, Kearns characterized the release of the emails as an effort to implicate him personally of wrongdoing, “that is categorically false and it’s without merit.”
If there was any collusion, Kearns said, McDougall could have implicated him to get a plea deal and potentially avoid any prison sentence.
“That’s the bigger fish that they would want,” Kearns said. “Mr. McDougall didn’t say that at the time.”
None of the other audits or law enforcement investigations reviewed emails.
“Neither myself or anyone else was aware of these two emails,” Kearns said. “There’s only two and it’s just so strange, you know? That whole thing has really upset the office, and these emails with the word ‘extortion,’ we even said there’s no connection to this office.”
Kearns criticized the Division of Information and Support Services for releasing the emails to the county attorney without notifying his office, characterizing it as a “weaponization of county government.”
Kearns is rumored to be considering a run for county executive, but he didn’t commit to it when asked Thursday. He said he considered running for city mayor, but turned it down.
“I’m a threat to them, and they know it,” Kearns said about his political adversaries. “If people want to give, they can give.”
Kearns vehemently denied he extorted money from employees for his campaign war chest, if indeed that is what the two emails were meant to imply.
“No, I would never do that,” Kearns said. “I don’t threaten people. I don’t coerce people.”
“If Mr. McDougall didn’t send those two emails … this whole thing, it’s sensationalism,” Kearns said. “It’s a nothingburger.”
In addition to including the two emails, Weaver and Tidwell LLP accused the clerk’s office of impeding its audit by omitting data and causing unnecessary delays.
Specifically, Kearns did not give the firm carte blanche access to its record-keeping system, which he said contains sensitive and private information of local residents.
He also questioned why the firm never met with his forensic auditor, who has decades of experience. If a representative had, Kearns said he would have directed staff to provide the firm with whatever it needed, without giving third-party remote access to sensitive data.
The county attorney, Jeremy Toth, attempted to address the clerk’s concerns with a privacy agreement that directed the auditing firm to “commit to ensuring that all data management practices comply with the specified guidelines to maintain the integrity, confidentiality, and security of the data.”
Weaver and Tidwell LLP said in its report that the lack of access to the records prevented it from completing a thorough review.
But the firm’s representatives didn’t emphasize those concerns to a county legislator, who asked them in July when the report would be completed.
News 4 Investigates confirmed that Erie County Majority Leader John Gilmour asked representatives of the firm on July 25 if they had everything they needed to complete its report.
The Weaver and Tidwell representative mentioned they never had access to the clerk’s record-keeping system, but “to ensure that we could get things done, we figured out workarounds, is what we do. So, we moved forward, we were able to gather and piecemeal information we needed to address the issues put to us in the letter of engagement, the agreement.”
“So, at that point in time, you know, they don’t have to finish this off,” Kearns said. “They could say no legislator, honestly, we haven’t. We’ve been blocked. We need additional time. Can you help us get this access? They didn’t say that.”
Gilmour said he was surprised the firm made a big deal in the report about not getting access to the records, when its representatives didn’t relay the concern to him in a similar manner.
“They didn’t emphasize or make any big deal about it, that they were being railroaded or impeded in any way,” Gilmour said. “They had the people on the phone. If it was that big of a deal, they should have said so.”
Tim Mohr, a partner of the firm who signed the privacy agreement with the county, declined to comment.
“We only discuss reports and our work with our clients,” Mohr said. “We have no additional comments.”
Erie County Comptroller Kevin Hardwick also accused Kearns’s office of “viscerally” opposing giving the comptroller’s auditors access to a separate M&T bank account to compare those records with what’s in the clerk’s in-house record-keeping system.
Concerns that opening the record-keeping system for inspection would jeopardize the privacy of county residents and create security issues was “a bit of a stretch,” Hardwick said.
“I don’t think they were going to find the nuclear launch codes,” Hardwick said.
Hardwick said none of the audits was politically motivated. In fact, Hardwick said his office delayed its own audit until after the election.
“The motivation was we were doing our job, we were looking out for the taxpayers,” Hardwick said.
“Every step of the way (Kearns) paints it as political,” Hardwick said. “We made his department better by virtue of these two audits, and we continue to support him and his requests to the legislature to make things better.”
Where does the county legislature go from here?
That’s unclear.
But both Hardwick and Gilmour said the county needs to move on.
“In my opinion, it’s over,” Gilmour said.
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Dan Telvock is an award-winning investigative producer and reporter who has been part of the News 4 team since 2018. See more of his work here and follow him on Twitter.
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