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Dawn shines on the Midway area Aug. 28, 2018,at the Nebraska State Fair in Grand Island. (Independent/Barrett Stinson)

In 2019, the Nebraska State Fair paid a total of $497,336 to one-time vendors.

That total consists of checks written to hundreds of people. Many of them are small amounts written to young people who earned honors at the fair.

Most of those payouts are legitimate. Some payments to one-time vendors, though, have come under question.

On March 11, the State Fair Board announced the staff had “discovered activity that is suspicious in nature and warrants further investigation.”

A person familiar with State Fair operations, though, said the investigation is not just looking at one-time vendors.

Among other vendors, $149,415 was paid to a company called RKBB Enterprises, LLC. That company was created in May 2019 by Patrick Kopke of Grand Island.

Kopke is the fair’s former chief of finance and administration. He resigned from the position after the State Fair board’s November meeting. During that meeting, Kopke said that unless the State Fair makes some changes in operations, it was only a year away from bankruptcy.

The State Fair said the investigation into its finances is moving along efficiently. Some of the work is being done by the Nebraska State Patrol and a Lincoln firm.

Late last week, State Fair Executive Director Lori Cox went on medical leave. Her attorney said when the board has its next official meeting, it will officially accept her voluntary resignation.

The person with knowledge of State Fair operations expects that meeting to happen soon. The fair board may meet via teleconference, rather than in person.

The State Fair board consists of 13 people, 11 of whom vote.

The person familiar with State Fair actions said the board called an executive session on the opening day of the 2019 fair. Accusations of theft and fraud were made. Some members of the group wanted to fire Cox that day.

In October, the board decided to renew Cox’s contract. Doug Lukassen of Kimball, who was the board’s treasurer, resigned at the end of that meeting.

Cox’s supporters, who total five board members, said they think she is being scapegoated. Six people are believed to favor Cox’s removal.

Last week, Cox said the State Fair staff began investigating its finances in December.

It was about that same time “that we discovered that the finance team’s computers were wiped down to the factory settings,” Cox said in a March 11 interview.

Three individuals worked on the finance team.

“But it was two of those three computers that were wiped,” Cox said.

Cox and her staff discovered financial irregularities Feb. 24. They notified the attorney general’s staff that day.

Last week, Cox said the staff had only investigated six months’ worth of data, but the investigation turned up more than six or seven vendors about which there is “significant concern.”

But a couple of vendors in particular the staff has a good indication about, “and we’re very worried about those,” Cox said two days before she went on medical leave.

One of the computers that was wiped belonged to Kopke. The other belonged to the fair’s controller, who was one of eight full-time employees who were let go in November.

On March 13, Cox released a statement saying the Nebraska State Fair is facing new challenges.

In the statement, she said the first phase of the internal investigation she initiated looking into actions by the State Fair’s former financial officer has been completed.

“The evidence has been turned over to external forensic experts and appropriate authorities for further action,” read the statement from Cox and her lawyer.

Attempts to reach Kopke for comment were unsuccessful.

On Feb. 21, State Fair Board Member Kevin Jorgensen of St. Paul visited Computer Concepts in Grand Island, which does computer work for the fair.

On Friday, Jorgensen said he didn’t go to the business to obtain one of the computers.

“I did not ask for a computer,” he said. “I was just verifying if our financial information truly was lost,” as the media had been told.

“As a board member, I felt responsible that we need to know if we have our financial records or not,” Jorgensen said.

Before he went to Computer Concepts, Jorgensen visited the local office of the Nebraska State Patrol to see whether that agency could get involved in the investigation. He also went to the Hall County Attorney’s office. The county attorney was not in.

“So I just went over to Computer Concepts and asked them questions,” Jorgensen said. “They said all of our information was on a server out there at the Fairgrounds. Basically, nothing was lost. And I was satisfied with that, so I left.”

On March 11, the State Fair said the suspicious activity was discovered as part of a review of its finances.

The fair has been in contact with the offices of the State Attorney General and the State Auditor and has hired a private firm in Lincoln to conduct further forensic review of the fair’s banking and financial transactions.

Fair officials are confident the information that was wiped off the computers will be retrieved.

The biggest vendor recipient of 2019 was Swanson Russell, which received $740,647.

Much of that money was used to purchase advertising for the fair. Swanson Russell, which has offices in Lincoln and Omaha, is an advertising agency. It also handles branding and marketing.

The cumulative amount of money paid to one-time vendors made them the second-biggest recipient of the 2019 state Fair vendors.

The members of the State Fair executive committee are chair Beth Smith, vice chair Dawn Caldwell, secretary Bob Haag and treasurer Boyd Strope.

The other members of the board are Jorgensen, Chris Kircher, Jeff Kliment, Kathleen Lodl, Chuck Rolf, Jeremy Jensen, Steve Wehrbein, Lanna Hubbard and Ryan Hassebrook.

The ex-officio members are Lodl and Hassebrook, who do not vote. Lodl represents 4-H and Hassebrook represents FFA.

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