Memo: State AG should look into possible whistleblower claims of Hopewell treasurer wrongdoing

HOPEWELL – Hopewell’s outgoing city attorney has recommended that the Virginia attorney general’s office look into claims by an alleged department employee that the city’s treasurer improperly removed herself from a state agency’s list of delinquent taxpayers without attempting to settle her own tax debts.

The allegations against Shannon Foskey were brought up in a letter sent last week to Commonwealth’s Attorney Rick Newman and cited in an April 18 memo from now-former city attorney Danielle Smith to City Manager Dr. Concetta Manker. According to the letter, Foskey illegally took her name off a state Department of Motor Vehicles “holds list” that prevents citizens who owe back personal property taxes from doing such DMV transactions as license and registration renewal until the payments are verified as settled by the locality's treasurer.

The letter also stated that Foskey admitted to paying back the taxes only after being confronted by others in city government about it, and even then, it claimed she only settled on one year's worth of back taxes she reportedly owes.

“This situation was entirely self-serving for Ms. Foskey,” the letter to Newman read. “In addition, it was not fair to other Hopewell taxpayers.”

Neither the letter nor Smith’s memo mentioned the amount or classification of any back taxes Foskey owed. Nor did they mention the exact date when her name was removed from the holds list.

The Progress-Index obtained copies of both the letter and Smith’s memo, and has verified their authenticity.

Newman’s letter was signed by “Anonymous Taxpayer.” Smith’s memo notes an allegation that the letter was written by a current Foskey employee, and The Progress-Index has been unable to independently confirm that. If so, the writer could be protected by Virginia's "whistleblower" law.

Section 2.2-3011 of the Code of Virginia prohibits retaliation by an employer against a worker who brings up allegations of office misconduct as long as that employee is acting “in good faith and upon a reasonable belief that the information is accurate.”

“Please do a thorough investigation of the current accounting practices,” the letter concluded. “I am sure you will find many issues that need to be resolved.”

How does the holds list work?

According to state guidelines, a locality's treasurer has the ability to add a citizen's name to a list of delinquent taxpayers who cannot transact business with DMV until they have settled on their debt. The taxpayer's name is forwarded to a collection agency for handling, and the list is updated weekly. When the back taxes are paid, the transaction is entered into Hopewell's MUNIS electronic ledger, and the person's name is taken off the list.

There are six employees in the treasurer's office including Foskey. Only Foskey and another designated employee have the power to remove names from the list, but everyone in the office has viewing access to it. The list is updated weekly.

In one of those weekly updates, Foskey's name reportedly appeared on the list. In a later one, it was noticed that her name was no longer on the list, yet there were no record of her making any payment in the MUNIS system. The other worker designated to edit the list reportedly claims to not have removed Foskey's name.

Shortly after the letter was sent to Newman, Foskey reportedly told her colleagues that she had taken care of the unpaid taxes.

A history of issues between treasurer and advisors

The allegations are the latest in a series of missteps involving Foskey, who is technically a city employee but really is one of five constitutional officers elected directly by Hopewell voters (including the Circuit Court clerk, commonwealth’s attorney, commissioner of the revenue and sheriff). The treasurer is traditionally responsible for receiving payments for city fees and services, and making sure the city's ledger is balanced.

Last month, the Robert Bobb Group – an independent consulting firm hired by Hopewell last year to put the pieces of its financial policies back in order – recommended that city administration take over the accounting duties normally handled by the treasurer after claiming that Foskey’s “misclassified” transactions led to Hopewell bouncing some checks. The group also criticized Foskey for reported reticence to sign an agreement with the city to temporarily reassign her accountant to the Hopewell finance department – a document she ultimately signed.

Foskey pushed back against RBG’s accusations, blaming a lack of “internal controls” on Hopewell’s part that have led to historical communication discord between her office and the city. She said she was always amenable to recommendations made for the betterment of the city.

Because of the reticence perception, RBG has recommended Hopewell ask the 2025 Virginia General Assembly to amend the city's charter giving city administration permanent control over entering transactions.

Since its initial contract was signed, RBG has uncovered many more shortfalls in Hopewell's money-management system. That has pushed the original contracted sum of $988,000 to more than $2.3 million.

A 'personal matter' but also a possible sign

In the memo written on the city attorney's last day of employment, Smith noted that Foskey’s tax issues “are a personal matter, and the treasurer may make the payment arrangements in order to bring all of the taxes forward.” She added, though, that the optics of the situation are not favorable toward Foskey.

“It is noted that it is not ideal to have a treasurer who is financially encumbered with outstanding obligations and who is trusted to handle the payments for the citizens of Hopewell,” Smith wrote. “However, if there are more improper accounting practices and financial irregularities that are discovered during the information gathering stage, it may be indicative of fraud on behalf of the treasurer.”

Smith said the allegation that Foskey personally took her name off the DMV holds list is “of great concern” to her and also should be one for City Council. She recommended that council do the following:

• determine if Foskey did, in fact, owe back taxes for personal property between 2019-24, and if she is delinquent on another taxes, such as real estate;

• investigate how the author of the letter knows that Foskey took her name off the list: and

• inquire about who is responsible in the treasurer’s office for removing names from the list and has that been regularly done for citizens satisfying their debts.

“It is fraudulent behavior and an intentional act by someone who has been placed in a position of trust by the citizens of Hopewell and given the scale of the information discovered, may be tantamount to misfeasance or malfeasance,” Smith wrote in the memo. “It is my formal opinion that the above information should be referred to the Attorney General’s office for further evaluation of criminal misconduct.”

Treasurer's lawyer: 'Nothing to see'

The Progress-Index spoke over the phone with Foskey and her attorney Saturday afternoon, although the lawyer Jason Dunn did most of the talking.

On the allegation that the letter writer was a possible whistleblower, Dunn said neither he nor his client knows if it came from an employee.

“It was signed by an anonymous taxpayer, and most of Shannon’s employees do not live in Hopewell,” he said. "It just could have been some employee who has sour grapes with [Foskey] judging by its content."

Regardless, Dunn said, the letter should never have been made public.

“There is nothing improper that she did,” Dunn said of Foskey. “She can decide who can come off that list. She has that discretion.”

When asked about Foskey’s working relationship with the Robert Bobb Group in light of what the company had recommended earlier, Dunn advised her not to answer.

“She’s pretty easy to work with,” Dunn said.

He also advised her not to answer questions about any emotional toll the issue has had on her, saying only that she was “frustrated” with how everything has developed.

“There’s really nothing here to see,” he said.

Following the interview, The Progress-Index was able to confirm that Dunn, a Virginia Beach-based lawyer whose firm specializes in delinquent tax collection and had contracts with 13 Virginia localities for his services − including Hopewell.

The day after the interview, Foskey sent The Progress-Index what appears to be an electronic receipt for a total of $912.25. The timestamp on the receipt said the payment was made at 9:58 p.m. on March 26.

"Once the payment was made, I received my decals from the [commissioner of the revenue]," Foskey said in a message accompanying the receipt. The commissioner operates a DMV Select office inside the Municipal Building that can handle some of the same transactions as a full-service DMV office, including license-plate renewals.

Related: House overwhelmingly passes fiscal distress bill that only applies to Tri-City, surrounding area

Related: State urges Hopewell to get financial house in order: 'This cannot continue'

Related: Hopewell council votes to increase real estate tax rate by 4 cents. Citizens don't like it

Bill Atkinson (he/him/his) is an award-winning journalist who covers breaking news, government and politics. Reach him at batkinson@progress-index.com or on X (formerly known as Twitter) at @BAtkinson_PI.

This article originally appeared on The Progress-Index: Apparent whistleblower claims wrongdoing by Hopewell treasurer