State: Wine board rejected probe of missing funds

<p>UKIAH -- A state audit shows leaders of Mendocino County's fledgling Winegrape and Wine Commission ignored recommendations that a former director's "misappropriation" of about $200,000 be turned over to authorities for investigation and possible prosecution.</p><p>Instead the commission's executive committee quietly negotiated a settlement with former President John Enquist that was publicly announced earlier this month. Enquist paid back a total of $217,803, which commission leaders said Aug. 7 represented all missing money plus costs associated with its recovery.</p><p>Enquist didn't "admit liability" under terms of the deal with his former employer, and faces no criminal or civil complaints.</p><p>"As far as we're concerned, the matter is settled and we're moving on," said Paige Poulos, new commission president.</p><p>In doing so, the commission rejected earlier recommendations from auditors for the state Department of Food and Agriculture that the Enquist case be turned over to authorities for further investigation.</p><p>"Due to the seriousness of the issues raised, the commission should contact the proper authorities so that investigations into these issues may be performed," state auditors urged.</p><p>Poulos said Wednesday that the commission leadership's decision not to seek criminal or civil investigations was made after much internal debate.</p><p>"We felt the best thing we could do for our members was to seek full recovery, and that's what we accomplished," Poulos said.</p><p>Poulos said new accounting safeguards have been put into place and the commission's finances are being handled by an outside agency.</p><p>"We are confident this can never happen again," Poulos said.</p><p>The state audit was conducted earlier this year at the request of some commissioners after suspicions arose about Enquist's handling of commission finances. Enquist, a former Sonoma County wine leader, has guided Mendocino's wine promotions over the past decade.</p><p>State auditors found that Enquist over a two-year period diverted $191,755 in commission revenue into accounts of the Mendocino Winegrowers Foundation, a scholarship arm of the local wine industry. The audit disclosed that $103,219 had been used to pay balances on six credit cards held by Enquist, which he asserted were for business-related expenses.</p><p>Auditors said neither the commission nor the foundation has ever issued corporate credit cards.</p><p>The lack of internal controls allowed Enquist to juggle the flow of money between the commission and the foundation without adequate review, auditors concluded.</p><p>Enquist, in a statement issued after the commission announced its settlement, acknowledged the missing money that was returned.</p><p>But Enquist contended that he had used it "to repay past debt for two financially troubled Mendocino wine industry organizations that were the foundation for the new commission."You can reach Staff Writer Mike Geniella at 462-6470 or mgeniella@pressdemocrat.com.</p>