The former director of Ottumwa Transit Authority has been indicted on four federal charges for allegedly making false statements to the federal government.
Pam Ward, former director of the Ottumwa Transit Authority (today called Ottumwa Transit) and 10-15 Transit, was indicted in the case, which was unsealed on Monday.
During a reaudit of OTA by the state in May 2011, inflated ridership numbers and charter violations were uncovered. Those figures were allegedly used to seek grants from the U.S. Department of Transportation.
“...One factor [the Iowa Department of Transportation] bases its distribution of [Federal Transit Administration] grant monies on is the number of riders utilizing a local transit provider’s services: the higher the ridership, the more FTA grant funding a local transit provider receives,” according to court documents.
The four counts relate to fiscal years 2010, 2009, 2008 and 2007, and allege that Ward “willfully [made] materially false, fictitious, and fraudulent statements” in the grant applications.
She has pleaded not guilty, according to court documents.
Ward has been released pending trial, though she has been ordered to surrender her passport.
Ward’s trial is currently set to begin March 11.
Ward declined to comment on the case, referring questions to her attorney.
“We believe she is not guilty and we intend to defend the case,” said Rick McConville, Ward’s attorney. “We don’t believe she’s violated any laws.”
According to the reaudit report, during fiscal year 2010, the OTA “overstated passenger counts by an estimated 50 percent over actual documented counts.”
Documents from fiscal year 2009 and prior could not be reviewed since they had been destroyed by the OTA “due to limited storage space.”
According to court documents, from fiscal year 2006 to 2010, Ward and others inflated ridership data submitted to IDOT.
“[Ward] knowingly submitted the false ridership data in order to fraudulently secure additional FTA grant funds for OTA and 10-15 Transit,” according to court documents. “These false statements resulted in obtaining excessive grant funds two years after the false data was reported.”
In December 2010, Ward received a letter from the FTA, outlining complaints about improper charter and school bus trips. The FTA provided “cautionary instruction to OTA regarding charter service.”
Violations included school bus trips to Pioneer Ridge Nature Center, Burlington, Oskaloosa and Pella.
The visit also found that OTA and 10-15 Transit vehicles were used for a wedding party in Ottumwa and transportation of John Deere employees to Boone, and transportation to a RAGBRAI event in Sioux City, all of which constituted charter violations.
Following the site visit, OTA was required to halt all exclusive school bus services and improper charter services.
Finance Director Bob Jay said that in August 2011, Ottumwa Transit and 10-15 Transit began repaying the state. Ottumwa Transit was required to pay $168,846, and 10-15 Transit was required to pay $211,250.
“They’re up to speed on payments,” he said. “They’ll be done in August.”
Jay said he did not have any documents or copies of grant applications because during OTA’s existence, it was an autonomous entity and all files were kept at the OTA office.
“We don’t have any copies because we had no authority,” he said.
City Administrator Joe Helfenberger said he could not comment on an ongoing criminal investigation.
City Attorney Joni Keith said since OTA was an autonomous agency run by an autonomous board, nothing OTA staff did went through the city. Therefore, the city will not be implicated in any criminal proceedings, she said.
The reaudit report included other accusations not included in the federal indictment, including that OTA tampered with timesheets and failed to keep proper records. Ward was fired from her position as OTA director less than a week after the reaudit was made public.
Since then, Ottumwa Transit has had three directors. The city is now in the process of accepting applications for a new director.