SARASOTA – Fred Sherrod ran a small department within Sarasota County utilities, but he wielded authority far beyond his pay grade.He encouraged his preferred vendors to break up big bills into a series of smaller ones, then charged them to his credit card in increments under $3,000 — the maximum the county allows for a single credit card purchase.
Sherrod’s credit card records show more than 200 charges of $2,999 to $3,000 over five years.
As he submitted bill after bill, Sherrod’s supervisors missed or ignored signs he was breaking the rules. Instead of reining in his spending, in 2007 Sherrod’s bosses boosted his monthly credit card limit from $20,000 to $50,000 and set up his work telephone to process credit card transactions, county records show.
Sherrod’s charges continued until he was fired in April, after Sarasota County officials began reviewing internal purchasing practices following the unrelated arrest of another employee.
Auditors from the Sarasota County clerk of court identified Sherrod as one of 25 county employees suspected of misusing their credit cards in ways that eliminated competitive bidding. Sherrod was No. 1 on the list, charging 50 percent more than the next biggest spender.
Sherrod has denied any wrongdoing. He told investigators he did not purposefully manipulate bidding rules but was simply paying for services the way he had been trained. He said many other county employees and administrators used their credit cards the same way.
And for five years, his performance evaluations show, his supervisors gave him good reviews and never questioned his methods.
“Up until the time I got fired, I thought I was doing a good job for the county,” Sherrod, 49, told sheriff’s deputies in a recorded interview. “I thought I was doing everything the way the county wanted it done.”
Dave Cash, Sherrod’s boss at the time of the credit card charges, said he never saw any proof that Sherrod was breaking the rules
His secret? His county-issued credit card.
Over five years, Sherrod used his credit card to control how government work was awarded, skirting county rules that called for competitive bidding.
With little or no oversight from his supervisors, Sherrod racked up $2 million in credit card bills — more than any other county employee — and sent much of that business to his associates, records show.
Sherrod paid an electrician he once employed to do $479,000 in electrical work for the county. He paid another $380,000 to a private investigations firm he once owned.
In interviews with the Herald-Tribune, Sherrod said all the money he paid out was for legitimate work. And a Sarasota County Sheriff’s Office investigation completed last month found no evidence to the contrary.
But a Herald-Tribune review of thousands of pages of emails, invoices and other public documents found that Sherrod violated county policies for years by breaking up bills in a way that short-circuited the county’s competitive bidding process.
Instead of seeking bids on work worth more than $50,000, Sherrod chose the companies he wanted to hire and charged it in small increments to his credit card.
The businesses he liked prospered. Everyone else lost the chance at hundreds of thousands of dollars’ worth of government contracts.
Sherrod’s monthly credit card bills contained abundant evidence of the violations.He would not answer specific questions about Sherrod’s charges or how he reviewed his employee’s credit card purchases.
“It was a long time ago and I just don’t know exactly what I was seeing or not seeing,” Cash said. “It is unfortunate that it could have been caught back then if there was some pattern going on. And why it wasn’t, I’m not sure.”
The private eye
Sherrod, a graduate of Sarasota High School, worked as an electrician for a decade before he tried to make his fortune as a business owner.
He started a surveillance company with a friend in 1995 and sold it two years later.
Then he opened Frederick J. Sherrod Controls and Instrumentation in 1996 and for more than a decade did repair work for Sarasota County’s utilities department.
In March 2006, after selling the company, Sherrod took a lower-paying county job that gave him oversight of a small division in the utilities department.
He had been with the county for four months when his bosses asked him to set up a camera surveillance program to catch thieves stealing manhole covers and other metals from county facilities.
Instead of bidding out the work, Sherrod hired Delta Associates — the Sarasota private investigations firm he had started in 1995.
David Berry, Sherrod’s former business partner, was still running the company.
The surveillance work began a five-year business relationship between Delta and Sarasota County that brought Delta $380,000 in county business. Sherrod charged it all to his credit card in increments of $3,000 or less, county records show.
Services that cost more than $50,000 a year are supposed to be put out for a competitive bid to make sure taxpayers are getting a good price and to give others in the industry a fair chance at government work.But Sherrod never asked that a bid be prepared, and his boss at the time, Cash, says Sherrod never mentioned that he had once owned Delta.
Sherrod denied showing favoritism to Delta, saying he chose the company because it provided the range of services he needed to catch the scrap metal thieves.
“You can’t just look in the phone book, or Thomas Register, and find a vendor that provides all these services under one roof,” he said.
Invoices show that Sherrod kept Delta Associates on the payroll continuously from July 2006 until he was fired in April.
During that time, the county spent $250,000 on surveillance that led to one arrest — for the theft of roughly $100 in copper wire.
Delta collected another $100,000 for an assortment of other work requested by Sherrod.
Sherrod once paid the company $500 to tail a disgruntled employee for a day. Sherrod had disciplined the employee, then hired Delta to make sure he did not follow through on threats of violence.
And Delta was paid $6,000 to follow chemical trucks for a few days because Sherrod suspected the company of overbilling the county.
The bills were all recorded on Sherrod’s county-issued credit cards, but were never questioned by his supervisors, nor stopped by periodic audits that showed annual credit card use in county government had topped $17 million.
Cash, now the county’s executive director of Operations and Maintenance, was Sherrod’s boss when the anti-theft surveillance began. But Cash says he was not aware of how much Sherrod was spending.
“There was never any intent to do it on a large scale or spend any large amount of money on it,” Cash said. “I was not aware that much spending was occurring with that vendor, no.”
Berry, the longtime Sarasota private investigator who owns Delta, said the business he got through Sherrod was not a special favor. “I know it looks strange that we knew each other this way, but trust me,” Berry said. “He knew I was going to do an expeditious, forthright job.”
Under the radar
As Sherrod grew the county’s surveillance operations, he also identified a go-to electrician to work for the county when problems arose.
Again, Sherrod chose someone familiar — Tim Harlow, who once worked for Frederick J. Sherrod Controls and Instrumentation.
When Sherrod went to work for the county in March 2006 Harlow started his own business, Tim Harlow Controls. Within months, he went from making $45,000 working for Sherrod’s private company to grossing more than $200,000 a year through county contract work arranged, in part, by Sherrod.
Harlow, 51, does not have an electrical contractor’s license, yet he became a fixture in the county’s utilities department, hired by at least a half-dozen different county employees for a wide variety of work.
He was paid $850,000 from 2006 to 2011, county records show. More than half of that was charged by Sherrod on his credit card in increments of $3,000 or less, avoiding the requirement that the work be put out for bid.
Had the work been bid out competitively, Harlow likely would not have even qualified because he lacked a contractor’s license.
During the sheriff’s investigation into county spending practices, deputies questioned Harlow and accused him of breaking state contracting laws and lying under oath, investigative documents show.
Harlow would not comment for this story.
State records show he had been covered by another firm’s electrical contracting license for about a month in 2009. His attorney said Harlow did not know he needed to get his own contractor’s license.
The state attorney’s office has not yet decided whether to press criminal charges against him.
When asked why he picked Harlow, Sherrod said he was comfortable with him. “I knew Tim’s capabilities,” Sherrod said. “If you can get one vendor to do the majority of jobs, why wouldn’t you do that?
“There’s a lot of value that’s placed on ease of doing business.”
Questions and answers
Even as Sherrod was asking his bosses to raise his credit limit in 2007, records show that he paid Harlow $6,500 for a single day’s work that was broken into four separate invoices.
Still, Cash lobbied for Sherrod’s monthly credit limit to be more than doubled, to $50,000.
“I feel this increase is appropriate,” Cash wrote in an email at the time. “I will continue to monitor the activity on his card to make sure his spending is accounted for.”
Over the next three months, Sherrod spent $87,000 on the credit card, including $33,000 for the surveillance work by Delta Associates.
Sheriff’s deputies who investigated Sherrod’s expenses concluded that no one person was to blame for what they called the “gross lack of administrative oversight” of credit charges.
The fact that so many people broke the rules made it more difficult to prove criminal intent, according to the sheriff’s office.
The sheriff’s investigation lasted four months, and turned up several other examples of bad management.
In May, a month after Sherrod was fired, his former assistant mentioned that he had rented two units at a mini-storage business on Clark Road.
County officials went to find out what was in them, and found dozens of laptop computers that Sherrod had apparently purchased.
The computers were paid for by Sarasota County, but not listed on any of the county’s inventories. Managers in the utilities department said they knew nothing about the storage units, or where all the computers had come from. Investigators ultimately decided Sherrod had done nothing wrong. He had bought them used, for a few hundred dollars apiece, for spare parts. Sherrod said he put them in a rented storage locker because every time he found space in a county building, someone claimed the spot and made him move.
The computers — worth thousands of dollars — might have gone forgotten if not for Sherrod’s assistant.
Investigative records show Sherrod groaned when detectives first confronted him about the storage lockers full of computers they “discovered.”
“It’s not like you’ve uncovered some kind of grandiose secret,” Sherrod told the detectives. “That was just part of doing business.”
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