The Blaine County Prosecuting Attorney’s Office will not bring criminal charges against former Hailey Police Chief Jeff Gunter over allegations of theft and credit card misuse, according to a report obtained by the Idaho Mountain Express on Tuesday.

Gunter retired in February after being placed on administrative leave by newly sworn-in Hailey Mayor Martha Burke, for reasons never shared by the city. At that time, he was under investigation by the Idaho State Police, according to an Oct. 28 letter addressed to Burke from the Prosecuting Attorney’s Office detailing the events.

ISP detectives began investigating Gunter, 60, of Bellevue, last January after Burke and other city officials received an anonymous complaint on Jan. 10, 2020, alleging “various breaches of duty and criminal misconduct” by the former chief, according to the report written by Blaine County Prosecuting Attorney Jim Thomas.

The anonymous complaint alleged missing or stolen cash from the Hailey Police Department’s evidence room and the misuse of the department’s credit cards, Thomas said.

After Burke shared a copy of the complaint with Gunter, Thomas wrote, colleagues and staff found his behavior “to have become erratic and very odd.” Between Jan. 10 and Jan. 24, 2020, Gunter made several attempts to discover the author of the complaint, purchased a new shredder with a city credit card and “spent a day in his office with his door closed shredding unknown documents,” according to Thomas’ report. The former chief also permanently deleted all emails during those two weeks, ISP detectives found.

On Jan. 24, Mayor Burke initiated a formal investigation into Gunter’s conduct with a request to the ISP. Gunter was placed on paid administrative leave by the city on Jan. 28 at the start of the investigation. Less than a month later, he announced his retirement, citing needs to focus on family and personal health.

At the time of his leave, Gunter had a salary of $106,470, according to a budget report from the city of Hailey.

Missing money

From late January until early June, ISP detectives interviewed Gunter’s fellow Hailey police officers, staff and citizen witnesses. Detectives searched Gunter’s work computer and conducted detailed audits of the Hailey Police Department’s credit cards and evidence room.

On Jan. 28, then-acting Police Chief Steve England went to investigate the contents of the department’s evidence room, which Gunter had been supervising single-handedly since October 2018. England could not locate an envelope inside an evidence cabinet that apparently contained a large sum of seized cash, Thomas stated.

“In fact, the cabinet was no longer sealed with evidence tape,” he wrote.

No one knows much confiscated money the envelope contained. Former Assistant Chief Dave Stellers—who served as the evidence room custodian before Gunter until his own retirement—told detectives last year that he’d kept it sealed throughout his tenure. Stellers assumed it contained something “in the thousands,” he told investigators.

What is known is that Stellers sought and received certification from the Idaho Chiefs of Police Association for the department’s evidence-collection procedures, Thomas said. Gunter, on the other hand, disassociated from the organization in 2018, eschewing accreditation “for unknown reasons.” As custodian, Gunter also ended Stellers’ practice of sealing the vault with an initialed piece of evidence tape, according to the report.

Prior to his retirement, Stellers told England about the money, saying that “he was uneasy about Gunter’s attitude towards the evidence,” Thomas wrote in his report. Stellers also mentioned his concerns to Thomas personally. He ended his interview with investigators by stating that he did not take the cash, according to the report.

The money is still missing. But, “without documentation of the amount of cash that was present [in 2018] … it becomes impossible to assess the value of the alleged theft,” Thomas said in his report.

“There were at least three individuals at differing times who had access to the alleged cash money,” he wrote. “[A]lthough the money is missing, there is insufficient evidence to prove beyond a reasonable doubt that Chief Gunter took the money.”

“Broad latitude”

One less-serious allegation levied against Gunter during interviews with the ISP was that the former chief had stolen a city-owned snow blower for personal use at home. The piece of equipment had been missing from the station “for several years,” according to several law enforcement officers.

Gunter claimed that he returned the snow blower to the city of Hailey Maintenance Department prior to his leave.

“From the [ISP] investigation, it appears Chief Gunter regularly took broad latitude in the use of police-issued equipment with no repercussions from city of Hailey officials,” Thomas’ report states. “However, there is insufficient evidence to prove theft beyond reasonable doubt.”

Fraud allegations

Between November 2014 and November 2019, Gunter made or approved $41,255.73 in purchases using city credit cards, according to Linda Czemerys, a forensic accounting consultant working for ISP. Most of that can be attributed to expenses of the Hailey Police Department, including travel, training and supplies, England told investigators after reviewing an itemized list.

Other purchases England couldn’t remember or explain.

Some were logged without a receipt or a reason, appeared personal in nature, or were sent to Gunter’s home address. During those five years, Gunter made “possible personal purchases” totaling $4,242, according to ISP’s forensic audit of Hailey Police Department credit card accounts supervised by the former chief. He had $1,441 in goods delivered to his home address, including Amazon Prime and Office 365 subscriptions, a Dell laptop, a widescreen LCD monitor, a GPS navigator, a snow rake and a Magic Bullet blender. Another 40 transactions were made and reimbursed by the city of Hailey without Gunter presenting a valid receipt. Those purchases totaled $3,845, though not all were made by Gunter personally, Czemerys’ audit shows.

But according to Thomas, it’s impossible to determine whether the former chief’s purchases were for legitimate police business or at-home use.

That’s because Gunter himself served as a gatekeeper in the city of Hailey’s claims process, which requires employees to submit receipts or explanations for charges.

“Rarely would any charges be disputed, and then ultimately it was Chief Gunter who provided the authorization [of every charge],” Thomas stated. “The claim was then sent to the City Council to be approved on a consent agenda during regular council meetings.”

Furthermore, he stated, the approval of Gunter’s purchase claims by City Clerk Mary Cone, City Administrator Heather Dawson and the Hailey City Council created a presumption that his purchases were “valid expenditures,” making criminal prosecution impossible.

A “lack of institutional controls”

Ultimately, Thomas noted in his report a “general lack of institutional controls over the manner in which the Hailey Police Department credit cards were used by Gunter” and a “lack of accurate documentation” by the city of Hailey.

That, he said, would make it harder to prove wrongdoing in court.

“If tacit or explicit authorization was given, the employee may lack the requisite criminal intent, as they believed their actions were justified and permitted,” Thomas wrote.

Neither Burke, nor other city officials have spoken publicly about the reasons behind Gunter’s administrative leave. In response to a public records request from the Mountain Express, the city acknowledged that it received Thomas’ report, but would not disclose the document, citing an exemption for employee files in Idaho code.

“The City has a specific duty to refrain from publicly discussing personnel matters,” Dawson wrote in a Jan. 2, 2021, email to the Express. “Personnel records are exempt from public disclosure and will not be released by the City.”

Instead, the Idaho Mountain Express obtained the investigation report directly from the Prosecuting Attorney’s Office via a separate records request on Jan. 5. A few hours later, the city issued a press release regarding the investigation’s conclusion.

According to Tuesday’s statement, staff began a review of the city’s internal controls and practices last year after allegations were first brought against Gunter. The city said that it filters expense claims through “at least six city employees” before they reach the council for approval.

That system is no different than the one in place during Gunter's tenure, Dawson told the Express on Thursday. The review, she said, spurred "a higher level of diligence" from city staff in the claims process. 

“We have a strong system of checks and balances in place, by which we take very seriously the management of our taxpayers’ interests,” Burke, who had served on the Hailey City Council for more than two decades before taking the Mayor’s Office last January, said in the statement. “We hope that in the conclusion of this matter our community can gain a renewed level of trust in our government and its processes.”

Following city review, the Hailey Police Department is seeking reaccreditation from the Idaho Chiefs of Police Association, the city said, and has steps “to assure that all evidence has been and will continue to be properly maintained.”

Gunter began serving Hailey in 1990 as a patrol officer and was named chief of police in 2007. Following his retirement, former Assistant Chief Steve England took over as the city’s new police chief.

Neither Gunter nor his attorney Joe Filicetti were ever interviewed during the investigation, Thomas wrote, “despite repeated requests by Idaho State Police detectives.”

“I have not seen the prosecutor’s review,” Filicetti said in an email to the Express.

This is a developing story. For more, see Friday’s issue of the Idaho Mountain Express.

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