The Day the Money went Missing

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I don’t know the exact day the money went missing but in 1953 Lake Worth was involved in the biggest scandal in the history of its existence. Even now there is no comparison to this event as this was a combination of theft and trust involving our City Clerk and an attorney who had a long-term relationship with the city. Afterall, attorneys are the good guys, right?

Today, instead of trusting some outsider, we simply put a match to millions in bad contracts and bad decisions that can always be justified by some lousy politician or bad city manager.

So one dollar in 1953 equates to the following worth today:
$8.15 using the Consumer Price Index
$6.85 using the GDP deflator
$11.60 using the unskilled wage
$13.80 using the Production Worker Compensation
$19.90 using the nominal GDP per capita

If we use the figure of $8.15, one dollar then is worth 8.15 times as much today.

In 1953 someone absconded with $239,000 in Bond money. It was the Bond lawyer who had a long relationship with the City of Lake Worth who never turned over the bonds to Lake Worth as procedure dictated. We paid for bonds that we never received in our possession. The City Clerk was in charge of the transactions and ultimately responsible. He believed that the bonds were in safe keeping with the bond attorney. He failed to follow proper protocol.

$239,000 is worth at least 8.15 times as much in 2010 (can not measure yet for 2011) or close to $2 million dollars that simply, poof, disappeared. In simple terms, it was STOLEN.

Edward Ewing was the City Clerk of Lake Worth. Truman Lifsey was the Bond Counsel who had a small office in Palm Beach with one secretary. Mr. Lifsey subsequently died and the “theft” was revealed by the city clerk who was responsible, all along, for these bonds and delivery of same.

Procedure then was to send the bond counsel the money; he would then purchase the bonds and then deliver them to the City. The Audit from J. P. Cochran of October 31, 1952 stated that “Investments were verified by actual examination and count.” As it turned out, the Auditor did not have a complete schedule of all bonds that the City owned.

City Clerk Ewing eventually went to jail and we never got back the money or the bonds as far as anyone recalls.

We know without really knowing that lots of money has gone "missing" over the years with slick accounting tricks moving it from one account to another with no explanation and with millions of dollars placed on Consent Agenda for approval. Just another reason why we need an independent Internal Auditor.