Treasurer requests probe of missing records

By Jeff German (contact), Steve Kanigher (contact)

Saturday, March 17, 2007 | 6:51 a.m.

Nevada law requires the state treasurer's office to preserve records for one year to 30 years, depending on the nature of the documents.

But when Treasurer Kate Marshall took office Jan. 1, records - many no more than weeks, or even days old - could not be found.

Frustrated by the scarcity of documents and e-mails in her office, Marshall on Friday asked Attorney General Catherine Cortez Masto to investigate the "potential destruction of public records" that may have occurred under her Republican predecessor, Brian Krolicki.

In a two-page letter, Marshall asked Cortez Masto, a fellow Democrat, to include the alleged purging of documents in an ongoing probe into discrepancies last year in the $3 billion Nevada College Savings Plan, overseen by the treasurer's office.

"My attempts to gather all pertinent documents and materials to resolve irregularities in the revenues and expenditures of the Nevada College Savings Plan have been hampered by the lack of historical information and documents in the treasurer's office," Marshall wrote.

Marshall said holdover staff members told her they were directed "by the previous administration to destroy documents as part of the transition and without any regard to the record retention laws.

"While many of them either chose not to destroy the documents and/or to purchase their own 'flash' drives to save data in the event documents were erased, this information is clearly disturbing," Marshall wrote.

Unlawful destruction of state records is a felony with a maximum sentence of five years in prison and a $10,000 fine.

Krolicki, now lieutenant governor, strongly denied that there was any attempt to destroy documents as he left the treasurer's office after eight years.

"I adhered to the letter and intent of all laws for retention of physical and electronic records in my office," he said. "I'm proud of the office. We left it well."

But Marshall told Cortez Masto that when she took over, "there were absolutely no files or documents" in the treasurer's personal office or the chief of staff's office.

There also were no e-mails in the office beyond last October, when Krolicki's office switched to a new Internet server used by other state agencies, she said. The old file server, Marshall added, was apparently "purged and erased" and used for other programs.

Krolicki and several senior staffers who followed him to the lieutenant governor's office in January transferred e-mails accumulated from October through December under the new filing system to the lieutenant governor's office, Marshall wrote.

She said they made the transfers "without apparent regard to whether the information within those e-mails pertained to the responsibilities and operations within the treasurer's office."

Marshall had previously asked the state's technology department to help her transfer those e-mail files back to the treasurer's office.

Krolicki said he is assisting the person heading up the project, James Elste, the department's chief information security officer, with that task, which is likely to be completed next week.

Elste said Krolicki and his staff have been cooperative. "From my perspective, everybody's been helpful," Elste said.

Krolicki described his assistance as an "extraordinary gesture of transparency" not required by any statute."I have been completely open," he said. "I am an open book."

But in her letter to the attorney general, Marshall said Krolicki's actions may have compromised the treasurer's operations.

"Unfortunately, the fact that documents may be missing has placed this office in the position of being unable to ensure that all such records were properly transferred," she wrote.

"If any records or documents are found missing in the future, I can only surmise that they may have been contained in the files or e-mails that were either removed from this office or destroyed."

Cortez Masto's office already is investigating what Marshall describes as "discrepancies" in some college savings plan contracts handed out under Krolicki.

Krolicki has downplayed the matter as simply an "administrative contract issue" and argues the fund was properly managed during his tenure.

Reporter J. Patrick Coolican contributed to this report from Carson City.