Ohio Town Reels From Finance Chief's Theft

GALION, Ohio – When the former finance chief in this industrial town attempted suicide by shooting himself in the head last year, he left behind a note that contained a startling confession: He had been stealing money from the city.

An investigation revealed that William Bauer pocketed at least $87,000, and mismanaged Galion's finances so badly that he left the town mired in $11 million of debt.

The town's 11,000 residents are now paying the price for Bauer's misdeeds.

Gone is the D.A.R.E. anti-drug program at the local school district, a victim bill increased from $69 a month to more than $100 a month.

Bauer, who was left blind by the suicide attempt, pleaded guilty in April to five counts of embezzlement and is to be sentenced Aug. 16. He faces up to 50 years in prison and a fine of more than $1 million.

The big question -- what did Bauer do with the money he stole? -- doesn't have a satisfactory answer. The guilty plea averted a trial, meaning most of the federal government's evidence against Bauer, including the suicide confession note, hasn't been made public.

He told authorities that he had a gambling addiction and credit card problems, Police Chief Brian Saterfield said. But Bauer did not leave behind a paper trail showing exactly how he spent the money.

"It was just devastating," said Saterfield, noting that the city's debt is now about one-third of its annual $30 million budget. "He left us in a terrible bind."

Bauer and his attorneys did not return messages seeking comment.

Galion, about 50 miles north of Columbus, is an industrial town that peaked with railroad traffic in the early 1900s. The city has worked hard to preserve the 19th-century architecture of its tree-lined downtown. American flags hang from many red-brick buildings.

Bauer grew up in Galion and entered city government in 1985 when a former city auditor hired him as an account clerk. Within a year, he was promoted to finance director.

Described by former co-workers as a man with an outgoing personality, Bauer was well-known in the community and ran the city's popular softball and youth-baseball leagues. Married twice, he has three adult children and a young daughter.

"We felt violated. This was a guy we trusted," said City Council President Dennis Little, who admits feeling heat from taxpayers who question how Bauer's antics could have gone unnoticed for so long.

"Could we have questioned him harder about city finances? I guess," Little said. "But we assumed he was doing his job right. He was a professional, and there were never any red flags."

Paul Marshall, who heads the state board overseeing the city's recovery, said Bauer was skilled at masking his accounting tricks. Bauer continually wrote checks that exceeded the available balance in the city's primary checking account, and then shuffled money among other accounts to cover it up, Marshall said.

"It was a house of cards, and eventually the whole thing collapsed," Marshall said.

Little and other city officials speculate that Bauer knew he was close to being exposed. Bauer shot himself the night before he was scheduled to make a presentation in front of a citizen's advisory committee on capital improvement projects. Authorities found him the next morning at a park after his wife reported him missing.

Changes have been made to prevent future accounting problems, Little said. The new finance director must have at least one other official OK all checks and purchase orders.

"Hey, as long as the city has learned a lesson from all this, I'm OK with it," said Walt Keib, 63, a retired school administrator who was appointed to City Council a few months ago. "I'm tired of blaming. Let's focus on correcting and fixing."

The city is dealing with the problem by cutting services and trying to raise taxes. The City Council is about to ask voters to approve an income tax increase in November. Under the proposal, taxes for a household earning $31,513 would go from $473 to $630.

State Auditor Betty Montgomery has placed Galion in fiscal emergency, appointing a board to create a plan to get the city out of debt. Marshall said it generally takes five years for local governments to pull themselves out of a fiscal emergency. He is not sure how long it will take Galion to recover.