Brian Krolicki back in the spotlight

Brian Krolicki proved last year that he’s a pretty good actor.

Not only did he risk being upstaged by twin red-headed girls, he had to work with a frog.

Still, Krolicki soldiered on in the name of publicity. After all, it was an election year. And besides having a college savings plan to hype, he had to market his own bid for higher office.

A legislative audit has found Krolicki broke a few laws, skirted some regulations and helped his friend and mentor cash in at the state’s expense as he finished his second term administering a college savings plan as state treasurer.

Krolicki was ready for the legislative audit subcommittee Monday, appearing cool, calculated and a bit schoolmarmish as he peeked over circular lenses pushed down to the tip of his nose.

“This has been balanced to the penny,” the Republican said.

Krolicki made sure of that. When you’re going to divert $6 million in state earnings and blow through the authorized marketing and legal budgets, you’d better be able to produce some receipts.

Krolicki, who is now lieutenant governor, made sure he followed just enough legal advice to be able to answer questions from auditors. You see, he was banking on a fellow Republican winning the race to replace him as treasurer last year. He literally shared a campaign consultant and bought joint television ad time with GOP candidate Mark DeStefano.

When Democrat Kate Marshall won the race, Krolicki was a little more unsettled. First he fought to keep his own office space, and perhaps, some of the college savings records.

When he finally agreed to schlep his stuff upstairs to his new office, Marshall uncovered a giant accounting mess. Using conventional methods, and with information available to her, she couldn’t make sense of the books and asked for an audit.

The good news, Krolicki told me Tuesday, is that the auditor informed him that there was no missing money.

“The legislative auditor shared that with me,” Krolicki said. “There is no doubt in my mind that all of the monies would be accounted for, but the accounting was done outside my office.”

Krolicki blames this on the dead.

Namely, the late Controller Kathy Augustine, alleged to have been murdered by her husband. Augustine, who had lengthy battles for relevance with the treasurer’s office, apparently outsourced the treasurer’s accounting role.

If Krolicki and his predecessor in the treasurer’s office, Bob Seale, were going to try to eliminate her controller’s office (which they still couldn’t do, even after Augustine was impeached), she was going to make the treasurer’s office less relevant.

Krolicki and Seale laughed all the way to the bank.

A quick bit of background: Krolicki worked in the treasurer’s office when Seale was in charge. And Seale was chairman of the state GOP when Krolicki ran for the office. Seale went on to work for GIF Services, an Atlanta-based investment consulting firm, and suddenly GIF began getting contracts from the state treasurer’s office.

First the company won a contract to oversee $100 million in long-term state investments. That grew to $621 million in short time. Company boss Steven McCoy and Seale donated some $50,000 to Krolicki’s campaigns. And sure enough, GIF was allowed to hold $3.4 million that should have been under control of the state. The total loss of interest to the state from all this money sitting in other people’s accounts is estimated at $38,000.

There’s also the $4 million the state paid to start the college savings program. That money has yet to be repaid. And while technically no money is missing, plenty of it went to attorney’s fees. Krolicki’s office went over the maximum amount by $96,000.

But the bulk of the money went for those commercials.

The treasurer’s office was allowed to spend $185,000 per year on marketing. Rose-Glenn Advertising of Reno spent $636,366 in one fiscal year and a whopping $1.5 million in fiscal 2006 — when Krolicki was on the ballot seeking the lieutenant governor’s office.

Krolicki attributes some of the overage to the difference from a January-to-December calendar year and a June-to-June fiscal year. Seriously. Mr. Accountant, you were nowhere near $185,000, any way you dice up the calendar.

Worse than that, Krolicki said Tuesday he didn’t know fund manager Upromise Investments was actually using state money, not its own money, to pay for the ads. Curiously, he also mentioned Upromise was under contract to spend at least $500,000 in Nevada on marketing each year. He never held them to that promise.

The most aggressive thing Krolicki did was dump the campaign last year, but only after drawing an ethics complaint for appearing in the ads. Upromise hasn’t spent a dime on commercials since.

How can they? Their star actor has taken on a new role, trying to sell his accounting methods to auditors, lawmakers and — now — the attorney general’s office.

Too bad he can’t bring the cute twins along.

Erin Neff’s column runs Sunday, Tuesday and Thursday. She can be reached at (702) 387-2906, or by e-mail at eneff@reviewjournal.com.