RICHMOND, Va. — The alleged spending mishaps at the Richmond Department of Elections which ultimately led to the resignation of General Registrar Keith Balmer could cause some legal troubles for the city or elections office.
Records obtained by CBS 6 revealed the security company that was contracted by the elections office has demanded the city pay more than $100,000 in overdue bills. If not, it will take legal action.
However, the City Attorney's position is that the City of Richmond is not responsible for the contract; rather, it's a matter for the Office of Elections to address.
A recently released investigation report by Richmond Inspector General James Osuna substantiated allegations that Balmer and his deputy registrar Jerry Richardson wasted government funds by contracting HPI Unified Inc. for security services without the proper authorization and despite that the city already had a different security contract in place.
WATCH: Richmond's top election official resigns after fraud investigation
Osuna said the City Code generally only allows the procurement director to enter contracts for services, which was not done in this case.
According to investigators, Balmer partly used HPI for personal body guards to accompany him at outside events.
In Balmer's formal response to the investigation report, which was dated Dec. 3 — the day before he submitted his resignation, he acknowledged armed security guards came with him to several engagements, including meetings, the Monument Avenue 10K and an elections conference at the Homestead Resort and Spa in Western Virginia.
While addressing reporters Wednesday following the announcement of his resignation, he explained why he thought the security was necessary. Balmer said his concerns started after an incident between two employees.
“One of my employees was violently assaulted at a conference a year and a half ago, and it frightened everybody. And I went to go visit her in the hospital, and [the other employee involved] was arrested, and he was also, at the time, on the payroll. So these are two employees who were in a relationship, and this was a domestic situation that played out at a conference in front of just hundreds of people, and that sent us down a rabbit hole, I would say, of just being really worried about security," Balmer said.
Balmer also went on to cite an "overall sense of unease" while preparing for a presidential election.
“We were worried about threats and retaliation regarding certain employees," Balmer said.
But Osuna said those alleged threats were never reported to Richmond Police and were not specific to any one individual. He determined Balmer did not have reasonable grounds for personal protection.
In Balmer's rebuttal, he blamed his deputy director for contracting HPI without his knowledge or approval, saying, "At no point was I aware of the financial implications of these services. I never saw an invoice, nor did I realize that we were being billed hourly."
The contract was initiated in January, but Balmer said he did not know of its existence until four months later. In his rebuttal, he said he was "shocked" to learn of the expenses and then terminated the contract and reprimanded his deputy registrar.
In total, investigators said HPI invoiced the city $200,000 between January and May of this year. Some of those charges, they said, were for alcohol purchased for elections employees.
“The security company did invoice with alcohol, but to my knowledge, those invoices have not been paid," Balmer told reporters Wednesday.
In May, HPI's lawyer Jesse Baez sent a demand letter to the City Attorney's Office, citing $111,833 in unpaid invoices.
The letter, obtained by CBS 6 through a Freedom of Information Act request, said in part, "The delay in payment, attributed to internal breaches of protocol by city officials, does not absolve the City of Richmond from its financial obligations to our client."
At the time, Baez said the company had already fulfilled its contractual obligations "with the expectation of timely compensation as agreed upon."
Then on Dec. 2, shortly after the release of the inspector general report, Baez sent a follow-up email to city attorneys saying the unpaid invoices are causing "growing frustration" and a "significant financial burden" for HPI.
Baez said he had provided the city with requested information and documentation months ago, and that the city should have been able to address any of its unanswered questions by now.
He threatened litigation if the matter continued to remain unresolved.
CBS 6 reached out to Baez for further comment, but he declined.
On Dec. 5, City Attorney Laura Drewry sent a letter to Baez, responding to HPI's demand.
Drewry said no contract exists between the City of Richmond and HPI, because the city's procurement director never signed an agreement with HPI.
"Rather, the agreement is allegedly between your client and the Office of Elections. You should pursue payment directly from that office, not the City, as there is no valid or enforceable contract between your client and the City," Drewry wrote.
Further, Drewry said the charges in the invoices "do not constitute reasonable expenses of the General Registrar" and therefore would not be valid for reimbursement even if a proper contract existed.
After receiving the city's response Friday afternoon, CBS 6 reached out to Balmer for comment and has not yet heard back.
Starlet Stevens, Chair of the Richmond Electoral Board which oversees Balmer, said she was not sure how the matter should be handled moving forward.
CBS 6 is committed to sharing community voices on this important topic. Email your thoughts to the CBS 6 Newsroom.
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