Auditors in Prince George’s County looking into more than $1 million in spending at the publicly owned Show Place Arena in Upper Marlboro said in a draft audit to top officials that they have identified numerous irregularities.

The draft audit, examined by The Washington Post, raised questions about the arena’s operations and more than $200,000 in expenditures authorized by its top manager, William Chambers. Auditors have singled out Chambers for the use of his official car, payments to businesses and community groups, and pay they say he received for days he was not at work.

With the audit underway in the summer, Chambers, arena finance chief James Bennett and operations director William Mullikin were placed on administrative leave with pay. They then retired. Nancy Weiman, the arena’s marketing director, is on administrative leave with pay while the investigation continues.

In interviews, Chambers adamantly denied any wrongdoing. He said that the funds were used to pay for legitimate business expenses and that he views the audit as part of an internal power struggle over control of the arena, which hosts equestrian events, business expos and concerts.

Bennett denied any wrongdoing, adding in an interview that he “was never accused of anything.” Mullikin and Weiman declined to comment through their attorneys.

Chambers and his colleagues at the arena have won support from a longtime ally, Maryland Senate President Thomas V. Mike Miller Jr. (D-Calvert). In a letter to the agency that runs the arena, Miller praised Chambers’s work and criticized the audit. He said he would label the probe a “witch hunt . . . but that would be unkind to witches.”

The letter was addressed to Betty Hewlett, who heads the Prince George’s parks and planning agency that operates the arena. Miller reminded her that he was instrumental in obtaining state aid for the arena and threatened a state takeover.

“It seems clear to me that the internal auditors do not know enough about how to run and manage an arena of this size to even be able to conduct a fair and responsible audit,” Miller wrote. The arena, the letter continued, “has exceeded all expectations,” which “could not have happened but for the incredible leadership of William Chambers and his outstanding management team.”

The arena has operated at a loss for several years, according to county records, and lost $2.8 million in fiscal 2010, about $416,000 more than in the previous fiscal year. In Prince George’s, the county’s public golf courses and ice rinks and the Landover sport and learning complex also operate at a loss, according to the records.

It is not uncommon for public facilities to lose money because they are deemed a public amenity that governments are willing to subsidize, and they sometimes generate other income for the government and the community through the use of local hotels, restaurants and related businesses.

The investigation is continuing, officials said, and the draft audit will be reviewed by a three-person committee of the Show Place Arena’s parent agency and other top agency officials. If the committee chooses, it can make recommendations to top officials about ways to address issues raised by any agency audit.

Anonymous tip

The audit began over the summer after the arena’s parent agency, the Maryland National Capital Park and Planning Commission, received an anonymous tip about the arena’s operations. The commission oversees parks and planning in Prince George’s and Montgomery counties.

Agency auditors began scrutinizing more than $200,000 in payments Chambers authorized to business groups and community organizations as well as thousands of dollars in complimentary liquor and food to groups.

The payments included $26,690 to the Maryland Chamber of Commerce; $100,540 to the Baltimore Washington Corridor Chamber; and $64,100 to the Calvert County Chamber of Commerce, the auditors said.

The auditors said they were concerned that some expenditures were “not for the legitimate business” of the commission. “We believe these payments were made to promote and benefit Mr. Chambers and his wife directly and indirectly rather than for the legitimate business of the [park and planning] commission,” the auditors said.

Chambers’s wife, Kelly Chambers, is executive director of the United Way of Calvert County, which has held an annual black-tie celebration at the arena. According to the auditors, the nonprofit received several thousand dollars in free champagne, wine and beer at the annual events held at the arena between March 2006 and March 20011. Kelly Chambers did not return calls for comment.

Chambers said in his interviews that payments to the groups covered memberships and sponsorships designed to help generate business for the arena.

The auditors also examined salary records for at least $28,000 paid to Chambers on days auditors said he attended school board meetings in Calvert County, where he is school board president. They also reviewed Chambers’s use of his official car to travel to and from school board meetings.

Chambers said that he always took leave when he attended school board meetings and that he used his official car because he often engaged in arena business after school board meetings.

The auditors said Chambers failed to seek permission, as required by commission policy, to hold a paid position on the Calvert County Board of Education, which pays members $5,500 annually and its president $6,500 annually. Chambers said that he had in the past filled out the required forms and that it was no secret that he was a school board member.

Claims of bias

Chambers said he has not seen a copy of the audit but has written to Hewlett challenging the findings and asserting that the auditors are biased.

He said that payments were legitimate expenses and that at times free food and drinks were offered as a way to lure events or thank groups for bookings at the arena. “That is how it’s done,” said Chambers, who was paid $109,200 a year before he retired.

Hewlett, chairman of the Prince George’s park and planning agency, declined to comment, saying it would be inappropriate for her to speak while the audit is ongoing. Maryland National Capital Park and Planning Commission general counsel Adrian Gardner said in a statement that he was not commenting on individuals or the unissued audit, but he said his office understands “that the investigators’ scope is much broader, and potentially more serious, than a handful of hot dogs misplaced with a Coke and a smile.”

“The taxpayers expect us to get to the bottom of the allegations, and they can rest assured the commission is working on just that.”

Chambers said he was baffled by the turn of events, particularly because he said he had received excellent evaluations by several supervisors.

“I have never been sat down by anyone . . . I was suspended for an anonymous complaint after 32 years,” he said. “I felt this was a de facto way to make policy changes” that would restrict the arena management’s independence.

Bennett, the finance chief, said he retired after he was questioned by auditors about Chambers. “I was told there was an investigation going on, but nothing specific,” he said.

Bennett said he, too, had received excellent evaluations and did not receive an explanation of why he was placed on administrative leave with pay. “It was open-ended. I was to be suspended until the audit was over. Who knew when that was going to be,” he said.

Kathy Snyder of the Maryland Chamber of Commerce, Walt Townshend of the Baltimore Washington Corridor Chamber and Carolyn McHugh of the Calvert County Chamber praised Chambers.

“It was all for getting the Show Place Arena to be recognized,” Townshend said. “Bill was always generous with his leadership and his time. He probably belonged to eight or nine chambers [of commerce] all across the area.”