Loading...
HomeMy WebLinkAbout10222018 City Council Laydown - Report on Investigation Requested by City Council✓J pF SF� / Q�ASKP MEMO OFFICE OF THE CITY MANAGER TO: Mayor Squires and Seward City Council Me ers FROM: Jeff Bridges, Interim City Man DATE: October 22, 2018 SUBJECT: Report on investigation requested by the City Council. Summary of Findings On September 25, 2018 at the Regular Meeting of the Seward City Council, a continuation of the Council Meeting of September 24, 2018, the following motion was adopted: "Direct the city manager to investigate the propriety of all the statements made by the finance director on August 22, 2018 to determine if in violation of the city's defamation and harassment policy and to determine if there was a violation of a confidentiality or personnel code, and to investigate the allegations of fraud against Towsley, and provide a report to the public". This impetus for this motion was a verbal exchange between City Finance Director Kristin Erchinger and City Council Member Suzanne Towsley which took place at an August 22, 2018 Special City Council Meeting. Attorney William Evans of the Anchorage law firm Seder, Wendlandt, Evans, and Filippi was hired to conduct the investigation. Through a series of interviews and his review of the records related to these issues, Attorney Evans conducted and completed the investigation. His full report is attached to this memo. In the issues were defined as follows: Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special Meeting constitute defamation in violation of the City of Seward's 2016 Defamation, Verbal Assault or Harassment Policy? 2. Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special Meeting breach any confidentiality or personnel rules of the City of Seward? 3. If Kristin Erchinger did complain that Suzanne Towsley had committed fraud, was there credible evidence to support her complaint? The conclusions of the investigation are as follows: 1. Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special Meeting constitute defamation in violation of the City of Seward's 2016 Defamation, Verbal Assault or Harassment Policy? Answer: No. Per the policy, defamation is the unprivileged oral or written publication of a false statement of fact.... The key issue is whether or not Ms. Erchinger's comments about "having filed a complaint against Suzanne Towsley for fraud" is a false statement of fact. The investigation revealed that Ms. Erchinger did complain to then City Manager Jim Hunt regarding issues with Ms. Towsley's time sheets which Ms. Erchinger considered to be fraudulent. Mr. Hunt in his interview stated that complaints were made to him by Ms. Erchinger regarding filing false time sheets by Ms. Towsley and that he did take corrective action, however, no records exist in Suzanne Towsley's personnel file of the complaints or any corrective action taken at the time. "It is, therefore, not surprising that Ms. Towsley would believe Ms. Erchinger's comments on August 22 to be both false and defamatory as there is no evidence that she had previously been made award of the complaints being lodged against her" (City of Seward, Report or Investigation p. 8, line 7-10). 2. Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special Meeting breach any confidentiality or personnel rules of the City of Seward? Answer: No. The comments made by Ms. Erchinger were made from information that is not protected from disclosure nor gained from confidential sources. This is true also for the statement regarding an alleged workplace violence incident that took place in 2014. This issue involved a city supervisor and a city employee who at the time was a minor. Although it was investigated at the time and the supervisor served a suspension for the improper behavior, no official records of the incident exists since they have been removed from the employee's personnel file. 3. If Kristin Erchinger did complain that Suzanne Towsley had committed fraud, was there credible evidence to support her claim? Answer: Yes. The complaints by Ms. Erchinger to Mr. Hunt appear to be supported by credible evidence. "It is important that this not be interpreted to suggest that Ms. Towsley actually committed fraud. It simply means that a reasonable person having the same information as Ms. Erchinger would have been justified, at the time, complaining of possible fraud". (City of Seward, Report of Investigation, p. 10, line 7-10). Since no investigation of the complaints regarding Ms. Towsley' time sheets was made at the time, and it is not possible to conduct an investigation now with the time that has lapsed, therefore, there is no way to conclude that Ms. Towsley was incorrectly filling out time sheets. I would like thank Mr. Evans for his diligence and expediency in this matter. 500 L Street, Suite 500 Anchorage, Alaska 99501 Telephone: (907) 677-3600 Facsimile: (907) 677-3605 www.alaskalaw.pro October 18, 2018 Clinton M. Campion Allen F. Clendaniel William J. Evans Attorneys at Law Lea E. Filippi Carolyn Y. Heyman John M. Sedor John C. wendlandt Via Email: jbridges@cityofseward.net Jeff Bridges, Interim City Manager City of Seward 410 Adams Street P.O. Box 167 Seward, AK 99664 Re: City of Seward; Report of Investigation Our File No. 5099-0001 Dear Mr. Bridges: This report documents the investigation and findings concerning comments made by Finance Director Kristin Erchinger during the public comment period of a Special Meeting of the Seward City Council held on August 22, 2018. The active investigation commenced on October 2 and concluded on October 16, 2018. The investigation involved in -person and telephonic interviews of several persons with personal knowledge of the events at issue. In addition to the interviews and a review of Seward's Charter, Code of Ordinances and policies were conducted. Information from personnel files, newspaper articles, email messages and written statements were also reviewed and considered during the course of the investigation. Description of Investigation: The scope of the investigation was determined pursuant to directions received by the Interim City Manager from the City Council.' Per the Council's direction, the investigation was to include: The propriety of all the statements made by the finance director on August 22, 2018 to determine if in violation of the city's defamation and harassment policy and to determine if there was a violation of confidentiality or personnel I Email exchange between Bridges and Ballou, September 25, 2018. Jeff Bridges October 18, 2018 Page 2 WENDLANDT' Attorneys at Law code, and to investigate the allegations of fraud against Towsley, and provide a report to the public.2 A complaint regarding this incident was filed by Council Member Suzanne Towsley on October 5, 2018.3 Ms. Towsley's complaint states: Please accept this complaint against the City of Seward Finance Director for violating the City Defamation, Verbal Assault and Harassment Policy, Page 2, Prohibited conduct, (4) "Defamation, which (sic) judicially defined to mean and here means the unprivileged oral or written publication of a false statement of fact that exposes the person about whom it is made to hatred, contempt, or ridicule, or subjects that person to loss of good will and confidence of others or so harms that persons reputation as to deter others from associating with him or her. Defamation is considered a legal offense and the City will not tolerate any acts of defamation." At a special meeting of the Seward City Council on August 22, 2018.4 Ms. Towsley amended her complaint the following day to include more details regarding the events of August 22, 2018 and to add additional instances of alleged defamation or harassment engaged in by Ms. Erchinger against other persons.5 2 Id. 3 Towsley Complaint, October 5, 2018. 4 Id. 5 Towsley Amended Complaint, October 6, 2018. The additional instances of alleged defamation and/or harassment committed by Ms. Erchinger against other persons as set forth in Ms. Towsley's amended complaint were not researched as part of this investigation. Given the factual basis for the determinations made in this investigation, the other alleged incidents, even if true, would not have altered the factual findings of this investigation. Jeff Bridges October 18, 2018 Page 3 Questions Presented: Attorneys at Law 1) Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special Meeting constitute defamation in violation of the City of Seward's 2016 Defamation, Verbal Assault or Harassment Policy? 2) Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special Meeting breach any confidentiality or personnel rules of the City of Seward? 3) If Kristin Erchinger did complain that Suzanne Towsley had committed fraud, was there credible evidence to support her complaint?6 Answers: 1) Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special Meeting constitute defamation in violation of the City of Seward's 2016 Defamation, Verbal Assault or Harassment Policy? Answer: No. At the special city council meeting on August 22, 2018, Ms. Erchinger took the floor during the public comment period to address an on -going dispute between her and Ms. Towsley.' Ms. Erchinger indicated there was "bad blood" between her and Ms. Towsley.$ Ms. Erchinger attributed the bad blood to having "filed a complaint against her for fraud" 6 The Direction by the City Council to the Interim City Manager requested an investigation into "the allegations of fraud against Ms. Towsley." Because the alleged fraudulent events occurred more than three years ago, it is not possible to determine whether or not Ms. Towsley actually engaged in fraudulent activity at that time. What is critical, however, for the purpose of this investigation and for evaluating the propriety of the comments made by Ms. Erchinger is whether credible evidence of fraudulent activities existed that would have justified a complaint by Ms. Erchinger against Ms. Towsley. I Seward Code of Ordinances mandates that "[a]ll regular and special meetings of the council shall be public meetings and the public shall have a reasonable opportunity to be heard." Seward Code of Ordinances Sec. 3.5(g). 13 Audio Tape of August 22, 2018, Special City Council Meeting. Jeff Bridges October 18, 2018 Page 4 �111ENDLAND� ��L�IP�,! Attorneys at Law back when Ms. Towsley was a city employee.9 No further details concerning the alleged "fraud" were provided by Ms. Erchinger at the August 22 meeting.10 Ms. Towsley denies committing fraud or having any knowledge of any fraud complaints being made against her. Her complaint alleges that Ms. Erchinger's comments violated the city's Defamation, Verbal Assault and Harassment Policy ("Defamation Policy") which defines "defamation" as: Defamation, which is judicially defined to mean, and here means, the unprivileged oral or written publication of a false statement of fact that exposes the person about whom it is made to hatred, contempt, or ridicule, or subjects that person to loss of the good will and confidence of others, or so harms that person's reputation as to deter others from associating with her or him. Defamation is considered a legal offense and the City will not tolerate any acts of defamation.11 The key issue, therefore, is whether Ms. Erchinger's comment about "having filed a complaint against [Towsley] for fraud" is a "false statement of fact."12 Did Ms. Erchinger, in fact, file a complaint of fraud against Ms. Towsley? If she did file such a complaint, her comment at the August 22 meeting was not "false" and, therefore, not defamatory.13 9 Id. Ms. Towsley was hired by the City of Seward in January 2009 in a split position between the Police Department and the DMV. In June 2009 she applied for and was selected as the Executive Liaison for the City Manager a position she held until April 2015. 10 Id. 11 2016 Defamation, Verbal Assault or Harassment Policy, p. 2. 12 Suggesting someone engaged in fraud would substantively be considered defamatory and likely to result in a damaged reputation and loss of good will in the community. Accordingly, the only issue is whether such statement is true or not. If it were false, it could be presumed to cause harm. 13 Not only must it be determined whether a complaint of fraud was actually filed against Ms. Towsley but also whether such a complaint was made in good faith based on credible evidence. In other words, Ms. Erchinger cannot claim the defense of truth in saying that she had previously filed a complaint of fraud against Ms. Towsley if the underlying complaint was wholly unfounded and unsupported by credible evidence. Put another way, if the original complaint of fraud was baseless and made in bad -faith, a Jeff Bridges October 18, 2018 Page 5 WENDLANDT ��d_NS° FILIPPI j The investigation revealed that Ms. Erchinger, and another employee in the Finance Department, complained to City Manager, Jim Hunt, that Ms. Towsley was engaging in conduct which could constitute fraud. Both Ms. Erchinger and a former payroll employee, Marsha Vincent, on separate occasions, advised Mr. Hunt that they believed Ms. Towsley was submitting false timesheets resulting in her being paid for hours she did not work. Ms. Vincent brought the issue to the attention of Ms. Erchinger. Because Ms. Towsley's work area was in the midst of the Finance Department, Ms. Vincent was able to observe when Ms. Towsley was present at her work station. Because it was audit season and the Finance Department was also implementing a new payroll system, Ms. Vincent and others in the department were working particularly long hours and would frequently be in the office both before and after the normal workday and could, therefore, observe when Ms. Towsley was in the office, even if it was outside of normal work hours.14 After hearing the concerns of Ms. Vincent, Ms. Erchinger reported the concerns to Mr. Hunt who was Ms. Towsley's direct supervisor.15 The allegations brought to Mr. Hunt's attention by Ms. Erchinger included issues involving Ms. Towsley other than the concern about the potentially false timesheets.16 When Ms. Vincent did not detect any change in Ms. Towsley's behavior, she again went to Ms. Erchinger and stated that she could not continue to knowingly process Ms. Towsley's payroll because she believed it was fraudulent and she did not want to be held responsible. Ms. Erchinger told Ms. Vincent subsequent oral or written publication that such a complaint was made could also be in bad -faith and unprotected. 14 It is important to note that the observations of Ms. Vincent and others in Finance could not, however, determine if Ms. Towsley was working off -site. 15 Seward Code of Ordinances, Section 3.05.015(d) limits the authority of Department Heads such as Ms. Erchinger to taking corrective action within their respective departments. Ms. Towsley, although located in the Finance Department area, was not in Ms. Erchinger's department. Accordingly, Ms. Erchinger reported Ms. Towsley's conduct to Ms. Towsley's supervisor, the City Manager. 16 Ms. Erchinger also complained about Ms. Towsley engaging in personal non -business related matters while at work. Ms. Erchinger wanted Ms. Towsley to be moved out of the finance department area because her presence was causing a morale problem among the Finance Department staff who did not feel that Ms. Towsley was working as hard as they were. This coincided with Ms. Towsley's request to be moved out of the area as well as she felt harassed by the Finance Department personnel. Jeff Bridges October 18, 2018 Page 6 Attorneys at Laub that she had already reported the matter to Mr. Hunt and advised Ms. Vincent that she should also take the issue directly to Mr. Hunt. Ms. Vincent then met with Mr. Hunt and told him that she believed Ms. Towsley was submitting fraudulent timesheets. She stated that as a tax payer and as an employee she was very upset about the situation and would not be responsible for allowing it to continue. Mr. Hunt advised Ms. Vincent that he understood and that the responsibility was on him to address the situation. Mr. Hunt did not provide any explanation for Ms. Towsley's conduct or in any manner indicate that she was permitted to work extensively outside of the office. Mr. Hunt's failure to address and change Ms. Towsley's behavior was an element in a complaint filed by Ms. Erchinger against Mr. Hunt which resulted in a mediation held on May 27, 2014. Among other issues, the mediation addressed Mr. Hunt's failure to deal with the complaints regarding Ms. Towsley as well as Ms. Erchinger's request that Ms. Towsley be moved out of her department's area. The Alaska State Commission for Human Rights ("ASCHR") Determination letter closing Ms. Towsley's sex discrimination complaint filed against the City also contains references to Ms. Erchinger's and Ms. Vincent's complaints against Ms. Towsley." In dismissing her discrimination claim, the ASCHR investigator determined: Investigation showed that the finance director received multiple complaints form her staff that complainant was often late for work, left work early, left work frequently when the city manager was out of the office, and regularly conducted personal business during work hours. The finance director also observed this behavior, and reported this to the city manager several times, explaining that complainant's behavior was impacting her staff which was working full days and sometimes working overtime. Investigation showed 17 On April 16, 2015, Ms. Towsley filed a sex discrimination complaint with ASCHR alleging that she was "subjected to rude, derogatory remarks and attempt[s] to discredit [her] professionally." She further alleged that she was threatened by "throwing objects at me and creating a hostile work environment." See ASCHR Complaint No. J-15-110. Jeff Bridges October 18, 2018 Page 7 Attorneys at Law that one staff member charged that complainant was also claiming wages for working her full schedule when she was not doing s0.18 Accordingly, based on the totality of the evidence, it is evident that Ms. Erchinger complained about Ms. Towsley to City Manager Hunt and that such complaints included allegations (i.e. filing false timesheets) which would be considered fraudulent conduct. Therefore, Ms. Erchinger's statements at the August 22, 2018 special City Council meeting were not "false" and do not constitute defamatory conduct in violation of the City's Defamation policy.19 It should be noted that despite Ms. Erchinger and Ms. Vincent complaining about Ms. Towsley's potentially fraudulent conduct to the City Manager, there does not exist any reference to the complaints or any subsequent corrective action in Ms. Towsley's personnel file. Nor is there any evidence that Ms. Erchinger's or Ms. Vincent's complaints were brought to Ms. Towsley's attention at the time. Mr. Hunt claims he addressed the issue with Ms. Towsley and claims he provided both verbal and written reprimands to her regarding the alleged conduct. Mr. Hunt believes Ms. Towsley's personnel file was in some manner cleaned of any of the reprimands he provided which he feels should exist in her file.20 It does not appear likely 18 See ASCHR Determination, J-15-110, June 26, 2015. 19 There does exist some technical discrepancy between what Ms. Erchinger said on August 22 and what she did when she complained to Mr. Hunt. Ms. Erchinger's comments on August 22 indicated that she had "filed" a complaint of fraud against Ms. Towsley. While the evidence indicates that Ms. Erchinger complained about Ms. Towsley engaging in fraudulent activities, there does not appear any evidence that any formal written complaint was made. Use of the word "filed" gives rise to the impression that a document was involved. This distinction, however, is not sufficient to convert Ms. Erchinger's statements into defamation. The damaging content of the statement is that Ms. Towsley was accused of fraud, not necessarily the manner in which the accusation was presented. Accordingly, while Ms. Erchinger's statement made the complaint sound more formal, it did not sufficiently alter the truth of the statement to render it defamatory. 20 At some point the entire Personnel file for Ms. Towsley disappeared. The City reconstructed the file from a copy of the file that had been provided to the City Attorney for use in defending the City against Ms. Towsley's sex discrimination complaint. The Jeff Bridges October 18, 2018 Page 8 I. W191 f ` IT, Attorneys at Law that Ms. Towsley was ever reprimanded or in any manner disciplined for any of the conduct complained about by Ms. Erchinger or Ms. Vincent. Had Mr. Hunt reprimanded or in some manner disciplined Ms. Towsley, a change in her work behavior should have been expected and detected. Both Ms. Erchinger and Ms. Vincent report that Ms. Towsley's work hours and associated behaviors did not change through the end of her employment. Accordingly, the most likely explanation is that Mr. Hunt never effectively addressed the issue with Ms. Towsley. It is, therefore, not surprising that Ms. Towsley would believe Ms. Erchinger's comments on August 22 to be both false and defamatory as there is no evidence that she had previously been made aware of the complaints being lodged against her. 2) Did the comments of Kristin Erchinger at the August 22, 2018 Seward City Council Special Meeting breach any confidentiality or personnel rules of the City of Seward? Answer: No. In addition to stating that she filed a complaint against [Towsely] for fraud, Mr. Erchinger's comments at the August 22 meeting also included a summary of a so-called "workplace violence" issue occurring in 2014.21 The Seward Code of Ordinances exempts from disclosure certain records which would otherwise be open to review by the public.22 Certain aspects of personnel records are protected from disclosure: City personnel records, including employment applications and examination materials, payroll and medical records which reveal the financial or medical status of any specific individual and, in addition, those records the disclosure of which would constitute an unwarranted invasion of privacy.23 version of the personnel file provided to the City Attorney did not contain any documented reprimands or discipline. 21 Audio recording of August 22, 2018 Special Session of Seward City Council. 22 Seward Code of Ordinances Sec. 2.05.010 contains the general provision making city records open to inspection by the public. Section 2.05.030 contains exemptions from the open records provisions for certain specified types of documents. Section 2.05.030(D) exempts certain portions of personnel records. 23 Seward Code of Ordinances, Section 2.05.030(D)(1). f Jeff Bridges Attorneys at Law October 18, 2018 Page 9 Also protected from disclosure are records or information prepared for or produced "during a legally convened executive session... 1124 This protection is, however, limited. Public records "which are otherwise subject to disclosure may not be protected from disclosure by mere submission during an executive session."25 Records "pertaining to juveniles" are also protected from disclosure.26 At the August 22 Special Meeting, Ms. Erchinger provided information regarding an incident occurring in 2014 involving a city supervisor and a city employee who was at the time a minor. The seemingly minor incident has generated significant political interest and social media attention as it has become linked to various promotion and hiring decisions that continue to roil various factions in the city. The comments made by Ms. Erchinger during the August 22 meeting do not appear to violate any confidentiality or personnel rules. It is important to note that no personnel records exist regarding this incident. Although an investigation took place and a two -week suspension was administered, no current official or personnel records exist documenting the incident.27 The comments made by Ms. Erchinger, however, do not appear to be necessarily derived from any personnel or confidential record. The information she provided is consistent in kind with other information regarding the incident circulating in the public and on social media. Accordingly, her comments, even if deemed to involve a long -closed personnel matter, do not appear to disclose information that 24 Seward Code of Ordinances, Section 2.05.030(F) 25Id. 26 Seward Code of Ordinances, Section 2.05.030(a)(2). 27 It was reported that City Manager Hunt determined that the investigation into the matter was not proper and, therefore, all records of the incident should be removed from the files. This does not appear to be appropriate conduct. Seward Code of Ordinances, Section 3.30.050(b) allows, under certain circumstances, for disciplinary records to be sealed in a confidential envelope and replaced in the employee's personnel file. Such sealed records are not to be referred to again unless there is a later occurrence requiring further discipline. There does not appear to exist any code provision that would call for or allow for the complete removal of a record of discipline after the discipline has been imposed and implemented. Jeff Bridges October 18, 2018 Page 10 Attorneys at Law would "constitute an unwarranted invasion of privacy" and as such do not appear to be protected or confidential.28 3) If Kristin Erchinger did complain that Suzanne Towsley had committed fraud, was there credible evidence to support her complaint? Answer: Yes. Mr. Erchinger's complaint to Mr. Hunt regarding Ms. Towsley's fraudulent behavior appears to be supported by credible contemporaneous evidence. It is important that this not be interpreted to suggest Ms. Towsley actually committed fraud. It simply means that a reasonable person having the same information as Ms. Erchinger would have been justified, at the time, of complaining of possible fraud. Ms. Erchinger was presented with evidence from Ms. Vincent that tracked Ms. Towsley's absences from the office and correlated her absences with her timesheets, ultimately indicating that she was working substantial hours when she was not physically present in the office. A review of the timesheets submitted by Ms. Towsley reveal that she did designate "flex" time on occasions when she had to work outside of normal business hours. The concern of Ms. Vincent and Ms. Erchinger's involved hours that appeared on Ms. Towsley's timesheet when she was not in the office and when no indication of "flex" time was noted.29 If an employee has been approved for an alternative schedule, that information is supposed to be provided to payroll. Mr. Hunt acknowledges permitting Ms. Towsley certain leeway to attend to child care needs. He stated he would not mind if she had to come in late or depart early in order to take care of her children. No formal adjustment 28 Although a juvenile was involved in the incident in 2014, the juvenile did not file a complaint and has indicated that he was not the victim of a workplace violence incident. Ms. Erchinger's comments are not inconsistent with his statements and do not reveal any new or confidential information concerning the incident. Ms. Erchinger also did not mention the juvenile's name during her comments on August 22. 29 Seward Code of Ordinances Section 3.15.055 defines the standard work hours for city employees and permits deviations from the normal work hours as permitted by the City Manager. Jeff Bridges October 18, 2018 Page 11 Attorneys at Law was made to Ms. Towsley's schedule as Mr. Hunt did not anticipate this flexibility to constitute a significant amount of time. Ms. Towsley acknowledges that she tried to avoid having to work in the office as much as possible, especially when the City Manager and the Assistant City Manager were out of the office. Ms. Towsley claims this was in order to avoid the harassment she experienced from the staff in the Finance Department. Accordingly, Ms. Erchinger was presented with credible evidence that Ms. Towsley did not appear to be at work for significant periods of time for which her timesheets claimed she was working. Despite presenting these concerns to Mr. Hunt, Ms. Erchinger was not presented with any explanation which would justify Ms. Towsley's significant amount of time out of the office. Therefore, Ms. Erchinger had a good faith belief that Ms. Towsley may have been filling out incorrect timesheets. The only way to conclusively determine whether Ms. Towsley was filling out incorrect timesheets would have been to investigate the situation at the time the complaints were made. It is not possible to conduct such an investigation at this time as it would not be practicable or even possible for Ms. Towsley to recall with specificity what she was doing on particular days in years past. Ms. Erchinger had credible documented information on which to base her complaint to Mr. Hunt regarding Ms. Towsley's conduct. Accordingly, her comments at the August 22 meeting were not "false" and, thus, were not defamatory. It appears that both Ms. Towsley and Ms. Erchinger were ill -served by the failure of the City to conduct a timely investigation into Ms. Erchinger's complaints. Sincerely, -ANDT, EVANS & FILIPPI, LLC