A state employee kept pirated movies and video games on his government computer and used illegal software routinely to share them with co-workers and managers, according to a report (PDF download) State Auditor Beth Wood made public Thursday.

Corey Palmer, a systems analyst at the Employment Security Commission of North Carolina, installed the software-ripping program AnyDVD on his work computer and duplicated copyrighted material, in violation of federal law and ESC policy. He kept “dozens” of copied DVDs and “numerous containers of blank DVDs” around his desk, according to the audit.

The ESC’s chief mission is to administer the state’s unemployment insurance program.

In an interview with auditors, Palmer said that he had maintained a share drive of downloaded movies on the ESC network “for others to use to pass the time when waiting for vendors.” He also admitted to transferring “movies directly to a specific manager’s computer.”

Palmer estimated that he kept “a bunch” of movies on his computer. Asked to clarify, he said “more than one and less than a thousand.”

Upper management knew about Palmer’s behavior prior to the audit. IT Services Manager Stan Nessing told auditors that Deputy Chief Information Officer Pat Young “brought to his attention the possible misuse of computers assigned to [Palmer] two years ago.”

Nessing didn’t think the information was “substantial” enough to pursue. “He said that he does not restrict use more actively because he cannot ‘wear a cop’s hat and then be liked by the employees,’” the audit says.

‘A stalemate’

In addition to the system analyst, auditors fingered an applications manager, Michael Kazura, who had four software programs installed on his work computer devoted to DVD ripping, a file that contained a copyrighted film playing in movie theaters, and 33 illegally ripped movies and television shows.

Kazura denied knowing the software was installed on his computer. He claimed that anyone could have loaded the software onto his machine because every employee in his division has administrator rights.

“If I knew it was there, I would have erased the d–n thing,” the report quotes Kazura as saying. “Nobody could ever prove who put it there. We are at a stalemate. I can’t prove how it got there and you can’t prove who put it there.”

After reviewing the activity log for Kazura’s computer, auditors concluded that Kazura’s user ID was the only one to access a folder where the copied movies were stored. That folder was deleted after the investigation began.

Kazura wasn’t Palmer’s supervisor, but a manager within a separate division of the IT department, according to the State Auditor’s office. His salary was $91,320 as of December 2009.

No porno movies

The ESC terminated Palmer in October and, the following month, placed Kazura on disciplinary suspension without pay for 10 workdays.

“The auditor’s report highlighted a serious matter and our management team took appropriate and fairly immediate disciplinary action,” said ESC Chairman Lynn R. Holmes in a statement. “The ESC’s management team has worked over the past several months to implement additional controls.”

The auditor’s office and ESC declined to provide Carolina Journal with a list of pirated media and software on the employees’ computers.

“If we have that information, it would be in our work papers, which are confidential by statute,” said State Auditor spokesman Dennis Patterson. “The only public information on the audit is the report itself.”

Asked if any of the films were pornographic, ESC spokesman Larry Parker said, “No they were not. And because it was not in the audit report, we do not have a list of the titles.”

David N. Bass is an associate editor of Carolina Journal. Executive editor Don Carrington contributed research to this report.