A “secret” committee came out of hiding March 5 and said mayoral candidate Michael Welsh’s two local businesses, Classic American Corp. and Welsh Industries, have active federal and state tax liens totalling $126,931.

The DeKalb Citizens For Truth Committee said Welsh bounced checks to the city for his companies’ and his personal water bill as recently as Aug. 1992.

It also revealed his paycheck for being an alderman is being used to pay for delinquent Dependent Health Care Coverage for his family and he has some outstanding unreconciled expenses on trips to Municipal League meetings.

The spokesman for the committee, 3rd Ward Ald. Gary Wiggins, said he started the committee in Dec. 1992 after he began receiving questions from constituents concerning rumors circulating about Welsh.

“When I started this organization, the intent was to exonerate Mike,” Wiggins said. “But we’re just reporting what we have.”

Joe Wiegand, Welsh’s campaign manager, said he saw the situation differently. “In our opinion, it is Sparrow’s campaign which is really the organization that held the conference,” Wiegand said. “They are attempting to divert attention with garbage. When you have Alderman Wiggins presenting himself as a reluctant speaker for a secret committee, you see how transparent it is.”

Welsh said the press conference was “obviously a desperate attempt to retaliate for the disclosure of the real issue, which is Sparrow’s extensive travel and the questionable explanation of it.”

He said the tax liens are a business issue separate from the campaign. “As a business and employer, we are subject to the dynamics of the recession-era economy of the last two years,” he said. “Our business is still outstanding because of our dedication to our employees. We don’t lay people off when times are slow but do advance work.”

Both businesses bring $1 million to DeKalb from outside of the county, and both grow at a rate of 25 percent a year, Welsh said. “I acknowledge the government as a creditor. Things are looking good though in terms of economy for both businesses, and I make no apologies.”

The bounced checks to the city and the insurance premiums have been taken care of. “Welsh doesn’t owe the city any money at present,” Wiggins said.

According to documents provided by the committee, Welsh bounced six checks for his water bills since 1984, totalling $545.25.

“The water bill is not an issue,” Welsh said. “I pay my water bill like any other citizen of DeKalb.”

The committee found Welsh was behind as much at $2,378.01 on July 26, 1989 in his insurance premiums, and his entire city paycheck was going to pay for this insurance.

However, according to a letter to Welsh from Suzanne Lehto, personnel director of the city of DeKalb, the city made a mistake by not billing him for the insurance for a year.

“The city didn’t bill me for over a year,” Welsh said. “At the end of the period I owed over $2,300. I acknowledged that and worked out a plan with the city manager like everyone else they made this mistake with.”

For six months, $100 of Welsh’s check went for the insurance. “I wasn’t comfortable with that,” Welsh said. “I wanted it resolved, so I told them to throw my whole check in there (181.01 bi-weekly).”

Now the account holds an $800 balance and his check is still going toward the insurance, Welsh said.

Welsh and his family were at no time without insurance coverage because the city made the payments for him during the year, Lehto said in the letter.

Wiggins also said Welsh has outstanding travel expenses that haven’t been reconciled. “Travel expense is a hot topic,” he said. “Welsh has expenses that go back eight years that haven’t been reconciled.”

Wiggins said there are no reconciliation sheets for three trips Welsh took to Municipal League conferences, the last one in 1990. On three other occasions Welsh cancelled a planned trip. On two of those the city did not receive a refund check for the registration cost, totalling $150.

“There really isn’t an issue there,” Welsh said. “In my eight years as alderman, I have taken seven trips. I have not travelled to the extent the mayor has, and he (Sparrow) is needing to explain a lot of travel expense on his part.”

A committee member who chose not to remain anonymous, despite the “secret” committee, was John Morreale, a local precinct committee member. “I’ve been interested for a long time,” he said. “It would be misleading to think we are casual observers.”

Welsh said there was a definite connection between Sparrow and the committee. “Wiggins and admitted committee member Amy Polzin (1st Ward alderman) are both Sparrow appointees,” Welsh said. “This is a thinly veiled attempt for the mayor to take shots.”