After Election, Report on Embezzlement of County Funds Finally Released. It was just a "misapproriation."

Later that same day, the Consultant/BHI CEO e-mails the DED COO “Houston…We have a problem!” Page 93. 

and

" ... top-level DED management oversight was extremely weak." Page i

and

"Former DED Directors used a 2006 agreement with a public entity to escape oversight by County government and create a standing reserve fund for use by the DED Director. The fund's availability increased the risk of improper financial transactions. Essential segregation of duties was absent within DED, and top-level DED management oversight was extremely weak. Over an eleven year period, the DED COO took advantage of control weaknesses to divert at least $7.2 million from the County's Incubator Program without apparent detection or impact on program operations. In implementing the BioScience initiative, DED management used public entities to fund the development and operations of a BioHealth intermediary without executing a formal Memorandum of Understanding (MOU) or Contract. " Page 5

The IG Report:   https://www.montgomerycountymd.gov/OIG/Resources/Files/PDF/IGActivity/FY2019/mcded_mismanagement_final_report_19_nov_2018.pdf

The report states on Page 5: 
Four individuals served in the position of Director of the Department of Economic Development between 1995 and 2016:
• DED Director 1 served from 1995 until 2006 during the creation of the Incubator Program2 , and subsequently served as Maryland Secretary of Business & Economic Development, as a Senior and Executive Vice President with different banks, and currently with Scheer Partners Management, Inc. (Scheer), a commercial office real estate firm and a sub-contractor to DED with whom he has served as a Senior Vice President since 2011. Former DED Director 1 was replaced as department director during the government transition that followed the election of County Executive Isiah Leggett.  [That would appear to be Henry Bernstein] 

• DED Director 2 succeeded DED Director 1, and served until 2009,
• The Former DED Director served between 2009 and 2015,
[That would appear to be Steve Silverman] 
and
• A person we will refer to as the Former Acting DED Director, who had served previously as the Director of the Rockville Economic Development Inc. (REDI) and as the former Deputy Director of DED, served as Acting DED Director from January 2015 until the DED was dissolved and replaced in 2016 by a non-profit, public-private partnership, the Montgomery County Economic Development Corporation (MCEDC) created with the recommendation of the County Executive and vote of the Council.
[ That would appear to be Sally Sternbach ]

References to "former DED Director" in IG Report:

Page 8:
In a voluntary interview during August 2018, the Former DED Director described his management of DED as “Hands Off”. Other evidence we located indicates that the Former DED Director was not engaged in daily DED operations. In a June 2009 e-mail, the DED managers were advised to go through the Former DED Director’s calendar and send him “a BRIEF e-mail updating him on any issue(s) that may be discussed during his meetings for that week.” The purpose of the “bulleted” e-mails was to be sure that the Former DED Director was aware of what the staff reported they were doing in a concise fashion. This change followed an earlier message in which the DED COO had been directed to reduce the Director's weekly meeting with the department managers from one hour to one half-hour. Politically appointed Directors are often short-tenured, focused on executing the policy objectives of an administration, and may not be either willing or qualified to manage career staff in a governmental organization...

Page 9:
The Former DED Director acknowledged that he had provided his password to the DED COO and possibly to other staff members, although he could not specifically remember with which other staff members he might have shared his password. Access to the shared password would have given the DED COO the ability to log on to the County information technology system as the Former DED Director and conduct transactions, such as sending e-mails, under the Former DED Director’s name.

Page 14
During his tenure, the Former DED Director was in a position to detect the existence of the shell company.

Page 15
It is somewhat surprising that the Former DED Director never reviewed financial statements of the incubator programs since, as he told us, he had to become personally involved in managing issues related to licensees whose past due rent payments were putting a financial strain on the program.