No Misuse of Pipeline Safety Funds Found

An investigation by state auditors has uncovered no evidence to support charges by the former chief of the state pipeline safety program that $250,000 was illegally diverted into other activities of the state fire marshal’s office.

“The transactions that we audited were reasonable, proper and in accordance with applicable state regulations,” reported chief auditor Enrique G. Farias of the state Department of Finance in a report made public this week.

The charges were made by Walter J. Hernandez, veteran chief of the fire marshal’s division of hazardous liquid pipeline safety and enforcement, who was fired from his Civil Service post in April. Among other things, he allegedly took gifts and loans from oil industry executives involved in pipeline operations.

In appealing his dismissal to the State Personnel Board, Hernandez asserted that the firing charges were “pretextual” and that his superiors actually wanted him ousted because he was investigating “suspicious” diversion of funds from the safety program to unrelated operations of the fire marshal’s office.

Additionally, Hernandez, who admittedly had been suffering personal financial problems, charged that pipeline safety funds were improperly spent on payroll and equipment purchases.

In a report of the investigation, Farias said the audit found “no evidence that pipeline funds were diverted to other programs” and discovered no evidence of questionable payroll transactions or equipment purchases.

A spokesman for the Department of Finance indicated that the audit was requested by the State and Consumer Services Agency in the wake of Hernandez’s allegations. He said it was started June 6 and completed June 29.