Tipsheet

How These City Employees Turned Taxpayer Cash Into Instagram Profits

A Houston agency is in the spotlight after its employees allegedly used taxpayer funds to purchase tools and then sell them on Instagram, showing once again that being a corrupt government official can be quite lucrative.

Several reports detail how Houston Public Works, the agency that builds and maintains the city’s infrastructure, allowed employees to use city-issued purchasing cards to buy more than $346,000 in tools. The alleged scheme involved duplicate purchases from Home Depot and Lowe’s.

Randy Macchi, the department’s director, told KPRC, “There was a scheme, a couple of employees that we’re aware of that, for a series of years, were using a P-Card to make purchases of tools and then selling those tools on their own and pocketing the money.”

A maintenance manager had already been receiving tools from the department’s McKinney warehouse while also using a city card to buy large quantities of the same items from retailers. Credit card statements showed that the employee bought the same Milwaukee drill set 190 times since December 2022.

Reporters found social media post showing three new Milwaukee drill sets listed for sale with an original price of $700. The employee was selling it for $450. The manager told reporters that the tools were broken, stolen, or given to subordinates. However, there were no records backing up his claim.

Amazingly, the abuse was not hidden from supervisors. City policy requires managers to approve P-card purchases made by subordinates, which is exactly what happened with this scam. The maintenance manager had worked with the city since 2016 and was pulling in over $105,000 per year. The city paid him $44,864.20 while he was under investigation in September. He resigned in January.

At least one other employee allegedly involved in the same activity also resigned.

Macchi insisted that “There will be accountability all across the board” and that “he certainly was not cleared of any wrongdoing.”

This is not an isolated incident. Indeed, it’s part of a larger pattern in Houston’s P-card oversight. An Ernst & Young efficiency review found that city employees were splitting costs among p-cards to push purchases above the specified spending limits. They also used cards at prohibited companies, including Amazon and PayPal.

Houston Mayor John Whitmire said it is “revealing as to why Houstonians are so frustrated and why I will not go to them and ask for more resources until we, in my judgment, gain their confidence that we’re using their money wisely.”