Wednesday, December 5, 2012

Report: Alleged eavesdropping, favoritism in Sun Valley

2011 inquiry prompted investigation into city’s affairs


By BRENNAN REGO
Express Staff Writer

Sun Valley Mayor Dewayne Briscoe says that changes he has made at Sun Valley City Hall have improved morale and efficiency.  Express photo by David N. Seelig

  On Oct. 5, 2011, a Sun Valley city employee blew the whistle.
    Former Finance Manager and Treasurer Michelle Frostenson told then-Mayor Wayne Willich that she had detected problems in the city’s financial affairs.
    Her complaint triggered an investigation conducted late last year by independent Boise-based attorney Patricia Ball, an investigative consultant.
    After Ball looked into City Hall’s closet, she recommended a more thorough examination of the city’s purchase and personnel practices.
    Blaine County Prosecutor Jim Thomas released Ball’s report on Thursday, Nov. 29—two days after releasing reports on subsequent investigations.
    The Ball report triggered a forensic audit of the city’s finances for the two years spanning 2009 through 2011. Current Mayor Dewayne Briscoe’s administration commissioned the audit in April, and it was received by the mayor and City Council on Aug. 24.
    The audit found numerous failures to follow written city policies on purchase records, expenditures, personal use of city vehicles, adherence to work schedules and compensation.
    The city referred the audit to Thomas, who sought the aid of the Office of the Idaho Attorney General and conducted a criminal investigation into alleged misuse of public funds by city employees.
    Last week, Thomas released the forensic audit and a report by the attorney general’s office along with a letter in which he concluded that criminal charges could not be supported because of sloppy record-keeping by the city and apparent approval of employee activities by supervisors, including Willich.
    The Ball report included numerous allegations that were later investigated by the attorney general and Thomas.

The Patricia Ball report
    The “Patti Ball Report” was commissioned by Willich’s administration on Nov. 23, 2011, nearly two months after Frostenson first voiced her complaints to him. Frostenson’s initial complaints included allegations of violation of city policy by former City Administrator Sharon Hammer, including misuse of public funds to pay for personal expenses.
    The results of Ball’s investigation were compiled in a report dated Dec. 20, 2011.
    According to the report, the city had requested that Ball broaden the investigation to include a preliminary evaluation of “potential violations of conduct” within the Fire Department, namely by then-Fire Chief Jeff Carnes; his wife, Building Official Assistant Tina Carnes; and their son Nick Carnes, a paid, on-call firefighter.
    Ball’s investigation cost the city just under $29,500.
    The report includes several allegations of violation of city policies and procedures:
l An alleged eavesdropping incident by former City Administrator Sharon Hammer on a City Council executive session.
l An alleged friendship between Hammer and a subordinate that may have resulted in preferential treatment of the subordinate in the form of monetary bonuses and obtaining city-owned housing.
l Possible nepotism in the Fire Department that may have resulted in irregular purchases on city credit cards and in timecard padding.
Sharon Hammer allegations
    On Nov. 11, 2011, the City Council met in executive session to listen to Frostenson’s allegations against Hammer. Ball investigated allegations by then-City Clerk Kelly Ek that Hammer engaged in eavesdropping during the meeting. According to the report, Hammer admitted to getting tea three times outside the City Council Chamber’s front door while the meeting was happening.
    “Hammer admits hearing some substantive conversation from the meeting,” the report states. “She admits that she ‘stood by the door for approximately 30 seconds to 1 minute brewing tea’ and returned to get hot water ‘two more times,’ standing there ‘for no more than one minute each time.’”
    The report also states that Hammer “abused her position of authority” by asking a subordinate staff member—police Officer Connie Morris, whose workstation was within earshot of the not-too-soundproof Council Chamber—to listen in and report back to Hammer.
    However, Ball reported that she was not able to unearth enough evidence to support a finding that Hammer “improperly” eavesdropped on the executive session, because Hammer and Morris remained in “areas of the building” open to the public.
    “Although not a technical breach, it is clear that Hammer violated the spirit of the concept of the Executive Session by lingering in the hall to listen and in having Morris relay the information she heard from the closed session,” the report states.
    Ball concluded that Hammer’s behavior was “inconsistent with the ‘moral sense of stewardship’” set forth in the city’s mission statement.
    Another matter investigated by Ball was a rumor involving a friendship between Hammer and Building Inspector Eric Adams, her subordinate.
    “Concerns were raised whether Hammer was engaged in a relationship with [Adams] resulting in Adams being provided preferential treatment in compensation and obtaining workforce housing,” the report states.
    According to the report, that alleged preferential treatment included two $5,000 bonuses given to Adams and approved by Hammer and Willich and the granting of a city-owned condominium to Adams, “even though he already owns property.” Ball determined that the second bonus may have been paid “in error,” but did not elaborate further.
    “Hammer exposed herself to allegations of preferential treatment by engaging in social relationships with a person over whom she controlled compensation and other personnel decisions,” the report states.
    Though Ball acknowledges that Sun Valley is a small town with a limited social circle, she states in the report that it is “imperative” for a city administrator not to engage in activities that could present a conflict of interest.
    Other allegations brought against Hammer by Frostenson listed in the report included use of a city vehicle and city-paid fuel for a personal trip to Boise, a violation of timekeeping requirements “tantamount to falsification of timecards” and failure to report vacation taken, resulting in Hammer’s receiving “cashed out” vacation payments to which she was not entitled. The report states that Hammer’s actions were approved by Willich.
    The Idaho attorney general’s report—made in 2012 pursuant to a request by the county prosecutor and also released last week—also alleges that Willich told its investigator that he had given Hammer permission to use a city-owned Ford Expedition to commute to work so she could have it with her at all times to respond to emergencies as an emergency medical technician. However, Willich said that it would “not be good” if she had driven the car to Boise on a personal trip. In addition, the attorney general’s report states that Councilman Nils Ribi provided the investigator with photos of Hammer with the city vehicle on an apparent camping trip.
    In an email to the Idaho Mountain Express, Jim Donoval, one of Hammer’s attorneys, called Hammer’s alleged falsification of vacation reporting “simply fictitious.”
    The City Council terminated Hammer’s contract with the city without stated cause on Jan. 19 upon the recommendation of Mayor DeWayne Briscoe, who had just taken office. However, she is still collecting money from the city, $343 per week in unemployment benefits from the Idaho Department of Labor, paid directly by the city every quarter.

Carnes family allegations
    The city of Sun Valley hired Jeff Carnes in 1976. On Jan. 13, 2005, the city hired Carnes’ wife, Tina Carnes, to work as a building official assistant. On June 11, 2007, the city approved hiring of their son, Nick Carnes, as a paid, on-call firefighter.
    Ray Franco, then-assistant chief and current acting chief, used to be responsible for processing the Fire Department’s timecards.
    “In November or December of 2008, Franco was preparing timecards for payroll submission when he saw that Nick Carnes had reported 240 hours for one month,” the Ball report states. “Franco states that Nick Carnes did not work those hours. Franco states that no one puts in more hours than Franco and he works 160 hours per month. Franco refused to approve it; the Chief approved the time.”
    The report further states that in January 2009, Franco was “advised” that Tina Carnes would be taking over the timecard processing.
    “Franco believes that it is a conflict of interest for Tina Carnes to be preparing timecards for her son and then having her husband approve them,” the Ball report states.
    Franco told Ball that Fire Department employees, including himself, were “terrified” of losing their jobs if they reported their suspicions about the alleged falsification.
    In an emailed response to questions from the Idaho Mountain Express, Carnes family attorney Robert Fallowfield said that when Tina Carnes was asked by then-City Administrator Virginia Egger to take over payroll accounting at the Fire Department, she inherited a “cumbersome hand-written process.”
    Fallowfield said that records indicate that department personnel, including Nick Carnes, were overpaid for their hours during some periods and underpaid during others. “[T]he end result for Nick … was that he was underpaid, not overpaid,” Fallowfield said.
    Briscoe said in an interview with the Idaho Mountain Express that the city has discontinued the practice of keeping records—including timecards and supporting timecard documentation—at the city’s Elkhorn Fire Station. He said the city’s records now are all kept at City Hall.
    Other alleged misuse of city money by the Carnes family listed in the report includes the purchase—on a city credit card—of a $400 snowmobile helmet for Nick Carnes, $2,500 in new parts for Nick Carnes’ personal snowmobile (which Nick Carnes reportedly rented to the city for use as a backcountry rescue vehicle) and the “accidental” use of a city credit card to purchase personal “Green Monster” work boots for Nick Carnes.
    “Franco states that any privilege Nick Carnes wants, he is given. ‘He has a carte blanche,’” the report states. “Franco states that he has reviewed bills and is aware that Nick Carnes uses the chief’s city credit card to buy personal items.”
    According to the report, Franco asked Hammer why Nick Carnes was allowed to use a city card when “others didn’t get to use it.” Franco told Ball that Nick Carnes’ being the only one to get a $400 helmet was “weird.”
    The Idaho Attorney General’s Office report included portions of an interview with Jeff Carnes, in which he said Willich had approved the purchase of the snowmobile parts because Nick Carnes used the machine for Fire Department winter rescue training. Jeff Carnes also said the “Green Monster” boots were well suited for department use.
    However, the attorney general’s investigation cited the forensic audit’s conclusion that “there was a severe lack of control with respect to credit card usage in the Fire Department.”
    “[O]ur investigation revealed instances of inappropriate credit card purchases because either they were unrelated to City business or they were excessive purchases in that the department was purchasing gear and equipment that was of greater quality than necessary … ,” the forensic audit states. “Many of these items that were purchased with the City credit card and determined to be unrelated to City business or excessive are also not in the possession of the City, further bolstering our finding that these purchases were unrelated to City business … .”
    Fallowfield said that neither Jeff nor Nick Carnes used a city credit card to buy personal items. He also said that all emergency-response employees keep some of their gear at home or in their vehicles.
    The Ball report stated that Fire Department Captain Mal Prior—now the interim assistant chief—“reported to Hammer this past summer [2010] that the Carnes’ (sic) were possibly misusing the City credit card,” the report states. “To his knowledge, no action was taken by Hammer, because Nick Carnes continued to use the card after [Prior’s] meeting with Hammer.”
   According to the report, Prior also contended that Costco purchases made from Volunteer Firefighter Association funds were “diverted” to the Carnes household.
  The report stated: “City firefighter Todd Taan Robrahn reported to Franco that on two occasions in the summer of 2010, he witnessed Nick Carnes take Association purchases from CostCo and divert them to his house. Todd witnessed Nick actually stop at Nick’s house and drop food off that he did not buy separately.”
    According to the report, Franco told Ball that the association shut the Costco card down.
    Fallowfield said Nick Carnes was with Sun Valley volunteer firefighters when they bought items for association events, but that he never signed the checks used for payment.
    Jeff, Tina and Nick Carnes resigned on Sept. 21.
    The report also stated that “Franco states that Hammer was aware as City Administrator what Nick Carnes was doing. She did nothing about his reported actions … . ”
    It also states that “Frostenson asserts that during the last City audit, approximately November 2010, she requested authority from Hammer to obtain access to the [Fire] Department timecards and records. Hammer denied her request.”
    
Fire station break-in
    On two occasions between February and April, the Elkhorn Fire Station appeared to have been broken into, resulting in the loss of city files.
    “[Someone] logged in and extensively deleted emails and other correspondence,” Briscoe said in April. “It would appear documents stolen and things deleted would be things examined in a forensic audit.”
    He also said it appeared that specific dates were targeted, covering the past few years, and that stolen or deleted records included work-hour and payroll records for Fire Department staff.
    Briscoe said Tuesday that “the city considers the case closed,” though Sun Valley police were unable to determine a culprit.
    “I was disappointed at the lack of depth of the Police Department investigation of the possible break-in at the Elkhorn Fire Station and the inadequate follow-up on any clues as to which personnel might have been involved,” he said. “There has been no follow-up to the investigation by the Police Department.”
    Sun Valley Police Chief Cam Daggett said Tuesday that he did not have a response to Briscoe’s comment “at this time” but that he would “pull the reports” related to the case and respond Wednesday, Dec. 5.
    Assistant Police Chief Mike Crawford said Tuesday that information on the case was turned over to the Attorney General’s Office as part of its investigation.

Criminal charges
    Blaine County Prosecutor Jim Thomas stated in a letter dated Nov. 21 to Briscoe and the City Council that he would not file criminal charges against past or present city of Sun Valley employees, due to insufficient evidence.
    However, Thomas called city management “lax” during Willich’s administration. He said managers demonstrated “apparent conflicts of interest” and a failure to follow stated city policies and procedures that led to a “culture of entitlement” at City Hall.

Policy changes
    Briscoe—who edged out Willich by 22 votes in November 2011—said his administration has been working hard to make changes in that culture since he was sworn in on Jan. 3, 2012.
    “The first thing I noticed when I took office was that the parking lot [at City Hall] was empty on Fridays,” Briscoe said in August. “The first thing I said was, ‘We have a five-day work week.’” Last week, he said, “Now the parking lot is full.”
    Hammer stated in a Dec. 27, 2011, memorandum to Willich and the City Council that, according to the city’s policy, it was her conclusion that she had the authority to make “final determinations of the application of all Sun Valley Personnel Policies And Procedures.”
    “Neither the Sun Valley City Attorney, the Sun Valley Mayor, or the Sun Valley City Council has the authority to question or over-rule such findings,” she wrote.
    In the memorandum, Hammer cited the previously existing personnel policy, which stated that “[t]he City Administrator shall make the final determination of questions of interpretation of these policies and the application of these policies.”
    Briscoe said Thursday that that section is not included in a recently adopted new city personnel policy because it was “misinterpreted by Hammer.”


Who is Patricia Ball?
Patricia Ball is an attorney who provides investigative legal consulting services out of her Boise-based law firm Management Northwest. According to Management Northwest’s website, she specializes in conducting workplace investigations on policy or legal violations, including suspected embezzlement, fraud, theft, harassment, discrimination and misappropriation.


Read the reports
To read the reports on the 2011-2012 investigations into city of Sun Valley finances and personnel policies, go to the Idaho Mountain Express website, www.mtexpress.com, and look  for “Extras” on the left side of the home page.


 Brennan Rego: brego@mtexpress.com






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