The persistent cloud over Jefferson County government darkened last week as news emerged about former treasurer Mark Paschall’s alleged improper investment of public money in the waning days of his tenure.
Paschall already is under indictment in an alleged kickback scheme. Now he is accused of sinking $64 million into investments banned by a recent change in state law.
It’s a disturbing development, particularly since the so-called collateral mortgage obligations were purchased through a brokerage that seems to have gotten an inordinate amount of county business.
Tracking Paschall’s exploits over recent years takes serious attention. He has roiled the local political waters with questionable use of campaign money, distributing religious booklets from his public office and, most recently, allegedly attempting to extract part of a $25,000 bonus he planned to give to a top aide.
This time, though, a substantial amount of public money is involved, and there is risk for significant loss.
The county has demanded that the brokerage at issue, Capital Securities of America Inc., repurchase the securities. The state treasurer got behind the request but, by Friday afternoon, the company still had declined to do so.
County officials estimated they’d lose $500,000 if they sold the investments on the open market. If the matter goes to litigation, as it likely will, taxpayers will be on the hook for legal fees, too.
That’s unacceptable, particularly if Paschall bought the securities against internal advice and when his investment specialist was out of town, as has been alleged. The brokerage involved is thought to have made between $100,000 and $150,000 on the deal.
Though law enforcement officials have been tight-lipped about whether they’re investigating, we surely hope they are. It also would benefit the public if the county launched a thorough review of Paschall’s actions as treasurer during his entire four- year stint, which ended Jan. 1, to see if there are any other irregularities.
The taxpayers deserve answers.
