What happened to nearly $1 million of pandemic assistance in Thurston County?

In 2022, the Thurston County Auditor's Office requested an investigation into a property management company based in Lacey. The concern was the illegal collection of nearly $1 million in federal Covid-19 pandemic funds for rental assistance.

The fraud put a stop to emergency aid in the county for months, but county leaders never pressed charges against the alleged perpetrator or demanded the money back.

Cascade PBS reporter Brandon Block wrote about the investigation. He told KUOW’s Kim Malcolm what happened.

This interview has been edited for clarity.

Kim Malcolm: Your article has someone named Lance Benson at the center of it. Tell us more about who he is.

Brandon Block: Lance Benson owns a property management company in Lacey, Washington, near Olympia, called Benson Management Services. He's well-known locally for his philanthropy. He runs a nonprofit called Dry Tikes and Wet Wipes that gives diapers to families in need. This has earned him the nickname "Diaper Guy."

Benson came to the attention of the Thurston County Auditor's Office. What did their investigation find?

Auditors looked into 80 payments to Benson's company. They called the landowners listed on each of those applications [for pandemic assistance]. What they found was that the majority of those landowners either lived in their home, so they weren't renting out at all, or they did not work with Benson. Even the ones that did work with Benson disputed the details of some of the applications. The conclusion auditors came to was that the people listed on these applications were not tenants at these properties.

So, they would not be eligible for any kind of assistance.

Correct.

What was the end result of the auditor's investigation?

Very little, as it turns out, as it concerns Benson at least. The auditors shared the results of this investigation with law enforcement at the city of Lacey, at Thurston County, and even up to the FBI, but no charges have been pressed at this point. I spoke to law enforcement. I talked to the Thurston County sheriff. He called this case a “train wreck.” He said part of the problem was that the nonprofit contracted to distribute the funds, Community Action Council, was not cooperative. They wouldn't act as a victim in the investigation.

County commissioners also blamed the nonprofit. This turned into a long, protracted dispute where the nonprofit initially denied that fraud occurred. The county fired them in a closed-door meeting. That was three years ago, and that's where things stand now.

Your article deals with a lot of complexity, but on the surface you ask a pretty straightforward question: Was fraud committed, and if so, by whom? Is the answer to that clear to you now?

It's, unfortunately, not clear. Fraud is a tricky term. As I'm often reminded by prosecutors, it's a legal term that needs to be proven in court, which it was not. And so, what I can say is that the evidence presented by the Thurston County Auditor's report, which I have obtained from them, I think pretty clearly establishes a pattern of suspicious payments to this company, and at the very least, merits further investigation. It's a little bit confounding why that never happened.

You spoke directly to Lance Benson. What did he say in response to your reporting and your questions?

He also blamed the nonprofit, a popular move, as well as some former employees that he says he's since fired. He said Community Action Council aggressively pushed money on his tenants. He said they told his tenants to apply even if they didn't need the money.

It's important to say he has not been charged criminally at this point. He has been the subject of a civil lawsuit in neighboring Lewis County, which sued his company in July [arguing he'd allegedly defrauded them]. Just last week, he agreed to pay restitution to settle that lawsuit in the amount of a little over $17,000.

And what about the nonprofit, Community Action Council? Any consequences there?

This has been the subject of an ongoing dispute with the county for the past three years over liability. It sounds like that was settled this past August. The county reached a settlement with the nonprofit's insurer for $275,000.

So, who is responsible for repaying these misdirected, stolen federal funds?

It's confusing. It's really not clear. Last year, I reported that the federal government demanded Thurston County repay over $600,000 connected to fraud. County leaders say they've since negotiated that number down, but my understanding is that repayment is actually unrelated to the potential fraud we're talking about today. So, it's really not clear.

One question I'm left with after reading your piece is why this didn't become headline news back when this investigation was underway.

I think part of the reason is that the county seemed to decide to blame the nonprofit for its lax fraud controls instead of going after Benson. That's become such a heated debate in the county that it seems like the county leaders seem to ignore what you might argue is the more important question here, which is who actually took this money, and why are we not going after them.

Listen to the interview by clicking the play button above.