Fact check: Has Galloway ‘recovered’ wasted Missouri taxpayer money as ad claims?
Did Missouri State Auditor Nicole Galloway recover $350 million in misused taxpayer money? Or did she uncover it? There’s a difference.
Galloway’s gubernatorial campaign aired an ad this month that displays in large text a quotation, attributed to Fortune magazine, that says she “recovered $350 million in wasted or stolen taxpayer money.”
This line comes from a September feature that lists Galloway, 38, as one of the top “40 Under 40” in government and politics.
The $350 million figure has been heavily promoted by Galloway’s campaign as the Boone County Democrat challenges Republican Gov. Mike Parson.
The number, from a 2019 annual report, is the approximate cash value of waste, fraud and abuse that the auditor’s office has identified in state and local government since Galloway assumed the post in May 2015.
According to a chart provided by Galloway’s office, the total is actually higher than what appears in the ad — nearly $369 million from May 1, 2015 through the 2019 calendar year.
However, the use of the word “recovered” in the ad’s large font will likely make Missourians think that this money has been returned to taxpayers or their state and local governments.
But that’s not the case in most instances.
Galloway has been careful not to make this misleading suggestion in the past.
In a 2018 campaign spot, Galloway said she “identified over $300 million in government waste.” She uses similar phrasing in her 2019 annual report, saying her office’s audits have “identified more than $350 million in government waste, fraud, abuse and mismanagement.”
The distinction between identifying wasted money and recovering it is important.
In cases of government waste, which account for the bulk of the audits conducted, taxpayers won’t get the money back after it’s already been spent.
It’s gone.
If you listen carefully to the her most recent ad, you’ll notice that the narrator says “uncovered” while the text displays “recovered.”
Galloway’s campaign spokesman Kevin Donohoe brushed off a question about whether the ad misleads voters.
He did not directly comment on the decision to use the Fortune quote with the word “recovered” in the ad. Other media outlets have reported the $350 million with more accurate language in the past, but the campaign opted to display Fortune’s phrasing.
“Auditor Galloway is one of the most effective state auditors in Missouri history, uncovering more than $350 million in wasted or stolen taxpayer money and helping to bring 63 criminal counts against corrupt politicians in both parties,” Donohoe said in a statement.
“Auditor Galloway’s record as an independent watchdog who takes on the political establishment led her to a resounding victory in 2018— even while other Democrats lost.”
When Galloway’s office identifies government waste, it makes recommendations to state agencies and local governments on how to avoid it in the future. But the auditor does not have enforcement power.
Nor does the office track whether the recommendations result in savings if they’re implemented, so there’s no way to put a specific dollar figure on the long-term impact of the audits.
The office does follow up some audits, particularly when a government entity receives a poor rating, to see if recommendations have been implemented.
In 2019, Galloway’s office conducted 14 follow-up reports on 227 recommendations to various governmental entities.
It found that 83 had been implemented, while 107 were either in progress or partially adopted. Another 37 had not been implemented at all.
But no dollar figure is tied to these status reports.
While wasted money might be irrecoverable, audits that lead to criminal prosecution are opportunities for restitution.
That’s the case in Galloway’s most financially significant audit — of Putnam County Memorial Hospital, which exposed a fraudulent billing scheme perpetrated by the hospital’s CEO David Byrns in 2017.
The venture involved billing insurance companies for lab services that weren’t conducted at the hospital.
Galloway’s audit placed the cost of fraud and abuse at nearly $105 million— mostly money stolen from insurance companies. It’s the largest dollar figure for any of Galloway’s audits and represents more than 28 % of the cumulative $369 million figure used by her office.
Federal prosecutors in western Missouri filed a fraud indictment against Byrns in 2019. The case was transferred to a federal court in Florida and Byrns pleaded guilty in October.
U.S. Marshals have seized roughly $3.8 million of Byrns’ assets and placed it in the Department of Justice’s Seized Asset Deposit Fund. A related case against other defendants, which also involved hospitals outside of Missouri, remains pending.
This story was originally published September 17, 2020 at 6:00 AM with the headline "Fact check: Has Galloway ‘recovered’ wasted Missouri taxpayer money as ad claims?."
