Software 'Conflict' Becomes an Issue
Sheriff's Office Pleased With System
According to Chief Deputy Neil Godfrey, the sheriff's office is pleased with Southern Software's system. Click here to read the story.
Southern Software started providing computer programs and technical support to the Moore County Sheriff's Office in 2003. But things -started to get complicated in 2006.
That was when Larry Caddell, who is Southern's CEO and owns 40 percent of the company's stock, won election to the Moore County Board of Commissioners. A further complication came in 2008, when Nick Picerno, who once owned the company and still serves as its board chairman, also became a commissioner.
Caddell and Picerno point out that the county is paying Southern Pines-based Southern Software about $24,000 a year - a tiny amount in an $85 million annual county budget. But in recent months, the two men's connection to the company has come under intense scrutiny and criticism, mainly from opponents of the -county's plan to issue $50.5 million in bonds to build a new jail and public safety office complex on land adjoining the existing jail in downtown Carthage.
Allegations of conflict of interest have erupted in blogs and comments on The Pilot's website and letters in the Public Speaking section of the newspaper. Some have insinuated that part of the reason Caddell and Picerno are -pushing for the new jail and offices for the Sheriff's Office is that it will translate into more money for their company.
Both adamantly deny that and express outrage at having their -character brought into question.
"We do $10 million in business a year," Caddell said in an interview last week, "and $24,000 is not a lot of money. Like I am lining my own pocket by building a bigger jail. That is just a lie. This is a witch hunt. I haven't done anything -illegal."
Picerno chalks this up to an attempt to sidetrack efforts to build a larger jail, which he said is sorely needed.
"We have a group that is upset about having a jail shoved down their throats," he said. "I understand that. Nobody wants a jail next to them. Four years ago, before I came on the board, the board decided that that was the best place to build the jail. None of these people ever came to the county in 18 months to fuss about the location of the jail or the financing.
"But that has nothing to do with Southern Software. Now we have all these lies and innuendo. We are improving the security of the jail. We are moving the sheriff out of the cramped basement of the courthouse, and we are moving 911 out of the basement of -another building. We are -improving the safety of this county."
One of the reasons opponents are so upset is that three of the five commissioners, including Caddell and Picerno, rejected a proposal to let the voters decide the bond issue in a November referendum.
"Two of the commissioners who voted it down ignored a request to recuse themselves," Southern Pines attorney Jamie Clark wrote in a letter in Public Speaking in Friday's edition. He represents a group that opposes the jail.
"They are affiliated with Southern Software, which sells software to jails and law enforcement agencies," Clark wrote. "Their company donated its software to the Moore County Sheriff's Department, and if the county builds this state-of-the-art jail, it will provide a perfect showcase for the company to demonstrate its software, which it sells to other sheriff's departments for $350,000 plus a $25,000 annual maintenance fee."
Clark said such decisions "should be made by the citizens of Moore County and not by two men who will personally profit from the project."
'But Is It Ethical?'
County Attorney Misty Leland says the county's dealings with Southern Software with Caddell and Picerno on the board have been perfectly legal. Besides its involvement with the Sheriff's Office and jail, the company has also provided the billing system software for the Public Works Department since 1993.
"I personally did immense research when Larry first came on the board," Leland said. "A lot has gone into it."
That may be so, but some critics - including Board of Commissioners Chairman Tim Lea - say that at the very least there is the appearance of conflict of interest.
"It is not about the money," Lea said. "It's the principle. It's taxpayers' money we're talking about. This may be legal. But is it ethical?"
When Caddell, the former mayor of Carthage, was elected as a county commissioner, a state law allowed local governments to do business with a company in which an elected official has a direct financial benefit - as long as the value of the contract did not exceed $25,000 and as long as the population of any town in the county did not exceed 15,000. Last year, the state legislature increased the allowable money amount to $40,000, though the population limit remains the same.
Frayda Bluestein, with the School of Government at the University of North Carolina at Chapel Hill, considered an expert on this issue, said the exemption in the law is intended to help small areas where there may be limited access to certain services.
'Not About the Money'
Caddell said he was well aware of the law when he came on the board.
"I would just as soon give it away," he said. "It is not about the money. We made it $24,002 (the contract). We aren't anywhere near the maximum allowed. Moore County is our home. We wanted to have our own county [as a customer]. That was important to us. We all live here and work here. If a town ever hits 15,000, I guess we won't get a dime as long as I am on the board. I knew that going in."
Caddell quickly points out that the company has provided a great deal more in terms of software and services to the county than what it is getting paid for - and that the county would pay a lot more for this kind of system from another vendor.
The county had been paying the previous vendor about $37,000 a year for a system that did far less than what the county now has, according to Chief Deputy Neil Godfrey.
Caddell said that for nearly two years, before the county received a $29,000 grant, the Sheriff's Office "was basically running the mobile computer-aided dispatch (CAD) system for free."
The Sheriff's Office wanted its system to interface with Emergency Medical Services and the 911 center. But there was no way all of that could happen with Caddell sitting on the board. So the company simply donated about $350,000 worth of software and equipment to the county in 2007, Caddell said.
"We wanted to take care of our own county," Caddell said.
According to Godfrey, the county would have had to pay about $212,000 for the CAD alone, and another $136,000 for the mobile system, including EMS and the 911 system.
"It would have been a much more substantial expense for the county," he said
Caddell said that is why he finds it so discouraging that -questions are now being raised about whether something is -illegal or inappropriate, given what the company has done for the county.
"I know politics is a full-contact sport," Caddell said. "If you want to come after me, fine. But to come after Southern Software and its employees is not right. Leave my company out of it. It has only done good here. We have done this to help our county.
"We certainly don't charge by the bed as far as the jail is concerned. I am not trying to take advantage of the -system. Our own sheriff will tell you that this system has helped solve crimes. And now to end up as the goat, it is disheartening. You aren't just talking about Larry Caddell. You are -talking about all of our employees. People say there is a hint of conflict of interest. It just isn't there."
Trying to Derail Jail?
Picerno asserts that all of the allegations are nothing more than an attempt to derail the jail project.
"If we are doing something illegal, we would be the first inmates in that new detention center," he said. "We've tried to do the right thing, and we are being punished."
Once the Sheriff's Office has new quarters and an expanded jail, Godfrey said, it is unlikely that it will mean paying more money to Southern Software. He said the county has enough concurrent licenses for the system and that the number of jail beds has nothing to do with it.
"We are pretty well covered for the future," he said.
Some critics also charge that the company wants to use Moore County as a showcase for its products to aid in selling them to other departments.
"They have old offices and an old jail," Caddell said. "I have 1,000 other showplaces. If someone calls Neil and wants him to let them see it, that is his call."
But Lea, who has worked in the health care software business and is now a consultant, thinks Caddell is being disingenuous by saying that the only -benefit his company receives is the $24,000 the county pays it a year.
"There's a value when a vendor wants use a site to showcase their products," Lea said. "That might be one of the reasons Larry donated the software to the -county. I am happy and excited that the county was able to receive this donation. To say that the only value they receive is the monthly or annual maintenance fee is simply not true."
Lea said he wants the county to be as transparent as possible in all its dealings, which he said is why he proposed approving the 2010-2011 budget in a series of five separate motions - including one that covered Southern Software.
'A Judgment for the People'
He wanted a separate vote on the budget for Sandhills Community College, another on the budget for the public schools, one on line-item changes, one on Southern Software and one "to tie it all together." He said he felt that the SCC budget should have been handled separately since Caddell is a college trustee and votes on that budget. He said the board could have excused Caddell from voting on that "to avoid the appearance of a conflict of interest" on that as well.
Leland said that under the law, Caddell has no more legal conflict of interest on the college budget than on the Southern Software issue.
On the Southern Software matter, Lea said he felt that the board should at least have discussed whether it was appropriate for Caddell and Picerno to vote.
"If we broke out Southern Software, the board would have to vote to excuse Larry and Nick from voting," he said. "I had no problem with that if they did."
Lea said he simply wanted the public to be fully aware of what was going on and what the board was approving.
"We all ran on transparency," he said. "Do they have a right to vote on the budget? There is already a contract in place. That is part of the budget. That is something called a gray area. Is it ethical? You have people being paid money by the county they are elected to represent and vote on the budget. It is money coming from the people paying the taxes.
"The board's position was to be as transparent as possible. We wanted to be more open. All five commissioners agreed to it. Then they ramrod this through (in one vote). Something is wrong with the process. It is not about the dollar amount. It is taxpayer money that is being spent. I know people want to make this a personal issue. It is about ethics and whether we are adhering to it as the people who pay the bills expect us to."
Caddell, Picerno and Jimmy Melton voted to approve the budget as one action. Lea and Cindy Morgan dissented.
"Tim wanted to drag me and Southern Software through the mud," Caddell said. "We have never done it that way [splitting the budget into multiple motions] in the history of Moore County."
Lea said the entire matter has nothing to with whether he is concerned about the perception of a conflict of interest.
"I am trying to adhere to the law," he said.
According to Bluestein, with the UNC School of Government, there was nothing illegal about the way the board approved the budget, since no contracts were singled out.
"Legally, it's not a problem," she said. "If a contract is already in place, the statute obligates them (the county) to pay. It's not a discretionary decision. If they are renewing a contract, it would be appropriate for the person to be excused from voting. It's a legislative judgment on the part of the board. It's a legitimate concern to raise. The board has the discretion to go forward under the exemption or to not allow the person to vote."
Bluestein agrees, though, that situations like this can sometimes get sticky.
"If there is an appearance of a conflict of interest," she said, "it is a judgment for the people of the community."
More like this story