Skiatook Schools certainly paid too much for some items, but vendor Rick Enos still deserved a commission on items and should not have to pay back the $657,000 the state is demanding, Enos’s lawyer argued Friday in court.
Attorney Scott Keith argued that overhead and commission ranging from 20 to 30 percent, among other factors, were not taken into account by the state auditor’s investigation purchases of janitorial supplies and security equipment purchased for the schools, which Enos previously referred to as his “cash cow.”
Keith acknowledged the school paid well above market value for items, but asked that restitution be set at $475,000 during Friday’s hearing at Tulsa Municipal Courthouse. He also argued that Enos should pay half of the restitution amount, while co-defendant and former Skiatook Superintendent Gary Johnson’s attorney Rob Nigh asked for a 30/70 split with Johnson paying 30 percent.
“You have two individuals that have done wrong,” Keith said about the even split. “He is the one who held the keys to the gate,” Keith added about Johnson.
Tulsa County District Attorney Tim Harris pointed out that the judge could request compensation for up to three times the amount of the total loss. Harris also acknowledged that Enos had the larger benefit from his relationship with Johnson and the Skiatook Schools. “We’ll argue that Mr. Enos should carry the lion’s share of that,” Harris said about the restitution.
The main question was whether Enos and the school system’s relationship would have existed without Enos’ bribes to Johnson.
“That is the question,” State Auditor Wesley Edens said during Friday’s testimony. “That was our question, but not for that relationship would the school have been doing business with E&E.”
More than likely that business would not have taken place if not for the bribes, according to Harris. “In fact, the state of Oklahoma doesn’t think the relationship would have existed if it weren’t for the bribes… The whole relationship was built on a crime,” Harris told reporters after the hearing.
Judge Tom Gillert will make the final decision on the restitution amount and the split between co-defendants on Thursday morning.
Both defendants pleaded guilty to four counts of bribery each earlier this year.
Harris asked Gillert to set the restitution at $657,197.27 Friday, based on the state auditor’s comparison of how much Enos paid for items and the markup difference.
“I think it’s reasonable,” State Auditor Wesley Edens said. “While I am keenly aware that number could be higher or lower, it is reasonable… I am not saying that is a definite number. ” Only 75 percent of the items bought through Enos could be tracked “penny for penny, item by item.” Of the 75 percent, 37 percent was the actually cost E&E spent on items. The remaining 63 percent was commission. For every dollar Enos was paid there was a 63 cent markup commission, according to the audit report.
“I believe he told us his dad taught him to buy for a dollar and sell for three,” Edens said. Enos’ father owned a janitorial supply company.
During Edens’ audit investigation he and his fellow investigator Tom Dougherty visited Enos’ business location, where storefront sign read “E&E Tax Services.” There was no indication the office building was a custodial supply company, according to Edens. Enos’ invoices to the school were billed under the names “E&E Sales” and “Austin Security.”
When the auditors asked if Enos had any supplies on hand at the building, Edens recalled that Enos said he “keeps a limited inventory” and gestured to a half open box of toilet paper behind him.
“If he was really a re-distributor and more than just a middle man he would have had inventory on hand,” Harris said.
When the auditors asked about Enos’ confirming when or if supplies arrived at the school, Edens said, “His response was that he worked on trust.”
The auditors also asked Enos how long it took him to order and write one invoice that totaled about $8,000. “His response was ultimately a few minutes,” Edens recalled.
Keith argued that Enos’ history and knowledge of janitorial supplies gave him information and connections that could be of value to clients like Skiatook Schools.
“That information alone has value,” Keith argued. “During the five years it’s not like Skiatook would have a free ride on finding this information out.”
Edens and the state had a different view of Enos’ assistance and knowledge.
“I don’t think getting a better deal is what he did. I agree with your theory, but…” Edens said after noting that he was not sure the school received any benefit from Enos’ relationship with vendors based on his audit findings.
Keith repeatedly mentioned that the school would have to hire or pay someone to handle vendors for janitorial supplies and security equipment.
“They did, and his name was Superintendent Gary Johnson,” Harris said. “He was suppose to be watching over the hens in the hen house.”