Don't Let Dixon's Recovery From Massive Ripoff Obscure Oversight Lessons
Plans are underway in the town of Dixon, a hundred miles west of Chicago, for a third — yes, a third — statue of its most prominent native son, former President Ronald Reagan.
This one will depict "Dutch" as a summer lifeguard, where, according to local lore, he helped save 77 lives from 1926 to 1932.
These days, Dixon is dealing with a different kind of rescue — one that is saving the community of 15,000 from drowning financially.
Two years ago investigators discovered Dixon had been pillaged by the largest and longest-running local government embezzlement scheme in memory.
Beginning in 1990, Dixon’s trusted comptroller, Rita Crundwell, pilfered a stunning $54 million in tax money to support an extravagant lifestyle that featured pricey show horses, homes, vehicles and jet-setting.
Crundwell got a 20-year sentence for her larceny, but Dixon dodged the bullet.
An investigation by the Better Government Association and NBC 5 reveals a fortuitous confluence of positive developments has enabled Dixon to recoup most of the money — more than $43 million.
Dixon Mayor Jim Burke / YouTube
It’s a financial roller coaster Mayor Jim Burke couldn’t have imagined a couple of years ago.
"We got lucky," he told the BGA. "It’s almost like this whole thing worked out to be a giant savings account for us. But we sure as hell don’t want this happening again."
Neither do we. Not in Dixon, and not anywhere else.
Dixon is a classic good news/bad news story.
The good news: Residents will finally see tangible benefits from the taxes they’ve paid — the new streets, police cars and other infrastructure projects that got deferred because Crundwell was stealing the necessary resources.
The bad news: The cozy conditions that facilitated the embezzlement.
Burke is the first to admit Crundwell got away with it because everyone trusted her, and there weren’t any internal safeguards in place.
So now, Dixon officials who were asleep at the switch for years get a bailout: $30 million from the settlement of a lawsuit against their auditors and bankers; $9.2 million from a sale of Crundwell’s horses and property; and nearly $4 million from an early buyback of bonds.
It’s great for Dixon’s taxpayers, but bad precedent.
Most rip-offs don’t have happy endings, so everyone on the financial side of government — from the State of Illinois and the City of Chicago to small municipalities and mosquito-abatement districts — has to remember their obligation to protect the public’s tax dollars.
The glaring weakness in Dixon was that Crundwell, and no one else, managed receivables coming in and expenditures going out.
That’s an invitation to abuse, and it’s easily prevented with a few simple controls, like at least two people monitoring the flow of money, and a change of auditors every few years.
Dixon has a new finance director who’s putting those safeguards in place — safeguards they never considered before because, as Mayor Burke put it, "we had Rita."
And that’s the takeaway: When tax dollars are at stake, no one can be completely trusted, and everyone needs scrutiny.
Or to borrow one of Ronald Reagan’s favorite lines, in describing his approach to arms negotiations with the old Soviet empire in the 1980s: "Trust, but verify."
That aphorism should be emblazoned in BIG BOLD LETTERS in every government office in Illinois.
Andy Shaw is President & CEO of the Better Government Association. He can be reached at email@example.com or 312-386-9097.
Photo credit: Rita Crundwell / Boone County Sheriff