PORT ANGELES — Light Operations Manager George Drake of the city public works department will be suspended without pay for one week and Warehouseman-Purchasing Agent Sean Hairell will be suspended two weeks without pay for their part in misleading State Patrol detectives during an investigation into a now-closed “City Light Slush Fund.”
City Manager Dan McKeen meted out the punishments.
“At a minimum, I felt they were evasive and not forthcoming with all the information,” McKeen said Friday.
He said Hairell and Drake both have apologized for their actions.
Drake will lose $1,900 in pay for being docked a week and Hairell $2,800 for missing two weeks.
Hairell was on paid administrative leave related to the investigation from Feb. 11 to March 16.
McKeen and Public Works Director Craig Fulton said Hairell and Drake were otherwise exemplary employees.
McKeen also said time off without pay constituted “serious disciplinary action” that would include a letter placed in their personnel files.
“I don’t expect that there will be any issues in the future with either employee,” he added.
McKeen conducted disciplinary hearings on Drake and Hairell on Feb. 22, after which McKeen ruled out termination for either employee.
State Patrol Detective Krista Hedstrom said Drake and Hairell were untruthful during her third-degree theft investigation into what was a decades-old unauthorized First Federal account.
It was named the “City Light Slush Fund,” and was known by some employees as the “copper fund.”
The account was fueled by proceeds from recycled metal from discarded, city-owned fuses that otherwise would have been thrown away, Hedstrom said.
Instead, they were dismantled and cashed in, with proceeds deposited into the account for city employee get-togethers.
Money was withdrawn to pay for their coffee and doughnuts, a barbecue grill that was kept at Light Operations, and parties for city employees including supervisors.
Some get-togethers featured prime rib, according to interviews Hedstrom and State Patrol Det. Joi Haner conducted with 14 current and former Light Operations employees.
While Drake’s and Hairell’s names were on the bank account, at first Drake denied it, while Hairell said he would be “shocked” if that were the case, according to transcripts of their interviews obtained by Peninsula Daily News.
Drake, Hairell and Equipment Operator Vern Daugaard, who dismantled the fuses and has since retired, signed off on the account when they closed it Jan. 12, 2015, according to the State Patrol’s investigation.
There was no evidence any employees personally profited from the fund, Hedstrom determined.
She said in a recent interview that she is wrapping up her investigation.
Hedstrom was still trying to determine the value of the fuses that were recycled, and also was trying to obtain bank account records that were not part of her Dec. 17 investigative report on the case.
“This whole thing sounded like it started way before half these people even started working there,” she said.
“They came into it and it was something that was always done and so nobody questioned it.”
Clallam County Prosecuting Attorney Mark Nichols forwarded hundreds of pages of State Patrol interviews and Hedstrom’s 14-page investigative report to Jefferson County Prosecuting Attorney Michael Haas for possible criminal charges.
Haas assigned the case to Deputy Prosecuting Attorney James Kennedy.
Kennedy said Friday that based on the information he has, he is unlikely to recommend criminal charges — but for now is withholding judgment on the seriousness of what occurred at Light Operations.
“It’s kind of bizarre, the whole case is,” he said.
What was bizarre, he said, was the behavior of some of those interviewed by Hedstrom and Haner.
“I want to withhold any pronouncement on how serious it is or not because I don’t know for sure if what I’m looking at now is the whole case or what I’m looking at now is scratching the surface,” Kennedy said.
“The suspicion, the deceptions and the finger pointing . . . that you see demonstrated by some of these people seems a little out of place given the accusation of small amounts of recycled goods that basically were being cashed in for company picnics.
“That’s what makes it bizarre. Why would people go through the lengths to hide it and lie about it? It’s a weird case.”
McKeen said that if new information comes out as a result of the additional investigative work, “obviously we’ll take that new information into account going forward.”
Fulton said all discarded fuses are now thrown out and none are recycled.
“They go in the garbage, and that’s where they stay,” he said Friday.
He said employees also take up donations for snacks and parties that were funded with proceeds from recycled fuses.
A police investigation into employees taking discarded cedar city light utility poles for their own use led to the State Patrol investigation of the bank account.
It determined that no criminal activity had occurred but that city policy on disposal of the poles had not been followed.
“The fact that both City Utility and [Clallam County Public Utility District] in practice treat their surplus utility poles as a cost and logistics burden and not as an item with any surplus value precludes a criminal report,” Deputy Police Chief Brian Smith said in an April 29, 2015, investigative summary.
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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at pgottlieb@peninsuladailynews.com.
