PORT ANGELES — Two longtime electric utility workers face Feb. 22 disciplinary hearings that could lead to their dismissal.
State Patrol Detective Krista Hedstrom said the two were untruthful during a five-month investigation into a bank account that funded employee get-togethers with proceeds from scrap metal, including copper and brass. The fund existed from at least the early ’90s through January 2015.
City Manager Dan McKeen said Friday he will preside over hearings for Light Operations warehouse worker Sean Hairell, who was placed Thursday on paid administrative leave, and for Light Operations Manager George Drake, who was not placed on leave.
Notices of intent
Human Resources Manager Abbi Fountain said Friday that Drake and Hairell received notices of intent to discipline Thursday after brief meetings that included Drake’s and Hairell’s union representatives.
She said action against Drake and Hairell could range from counseling to termination.
According to a State Patrol investigation, Drake and Hairell were untruthful about their involvement with the City Light Slush Fund at First Federal that was fed in part by proceeds from recycling scrap that was intended for the garbage.
The investigation concluded that no criminal activity occurred.
Jefferson prosecutor
At the request of Clallam County Prosecuting Attorney Mark Nichols, Jefferson County Prosecuting Attorney Michael Haas said Friday he has agreed to review hundreds of pages of investigative reports by the Port Angeles Police Department and State Patrol.
The police department investigation into discarded city light poles that employees allegedly took for their own use also found evidence that crimes occurred.
The State Patrol had investigated the slush fund account, which was at First Federal, as a potential third-degree theft.
Haas said he will decide by early March on whether criminal charges are warranted.
The poles, which were usable as firewood after their creosote-covered bases were cut off, were determined by city officials to have no value and were sent to the landfill or given to members of the public who asked for them.
“You can’t put a theft charge on something that has no value,” Hedstrom said last week.
The Port Angeles Police Department investigation found that employees taking light poles violated city policy.
Craig Fulton, public works and utilities director, said Friday the city was giving the poles away or discarding them.
“We have tightened up our policy,” he said, adding that he did not know how long employees were taking them for their own use.
In addition, according to the State Patrol investigation, city tools allegedly were taken home by utility workers.
City officials said last week they were concerned about the poles being taken, tools being used, an untrue rumor that had started that the fund paid for retired department equipment operator Vernon Daugaard’s daughters’ education and that “some city employees were evasive and misled the [State Patrol] investigators.”
Drake is a 26-year City Light worker and former lineman who was appointed by Fulton to the utility’s top position in 2013.
Drake was not at work Friday, according to his voice mail, and could not be reached for comment.
Hairell, a 10-year employee, said Friday he had no comment on the upcoming disciplinary hearing.
According to a 14-page summary of the State Patrol investigation dated Dec. 17, the slush fund bank account — also referred to as “the copper fund” — dated back to at least the early 1990s and contained up to $1,100 before it was closed Jan. 12, 2015, after the city police investigation began into the missing light poles.
Also at that time, employees stopped bringing city-owned tools and large equipment home for their personal use, according to one of 14 employee interviews in Hedstrom’s State Patrol report.
Reports dishonesty
In her conclusion, Hedstrom said Drake and Hairell, who was supervised by Drake, were dishonest about the slush fund.
Both were signers on the bank account.
According to interviews with utility department employees, the fund was fueled by proceeds from scrap metal and proceeds from employees who purchased pastries and other snacks.
According to the report, the fund was coordinated by Daugaard, who told the State Patrol it was “handed down to him in the early ’90s by Dave O’Donnell, another retired employee,” according to the report.
Daugaard said he would recycle scrap metal every three or four months and deposit the proceeds into the slush fund that was used to pay for such items as a barbecue at the shop.
He said the untrue rumor about paying for his children’s education was planted “to see how far it [the rumor] would go,” according to the State Patrol report.
Daugaard was not immediately available for comment Saturday.
Drake, 47, who earns $99,981 a year, denied knowledge of a First Federal bank account, according to the State Patrol report.
According to the report, he later said there was an account with his name attached to it and that when he was younger, he was told to sign the account.
“On Jan. 12, 2015, Drake, Hairell and Daugaard closed the account and signed the withdrawal receipt,” according to Hedstrom in the report.
“Contrary to Drake’s statements about having limited knowledge that this account existed, these were all actions that occurred in the last few years, one as recent as 2015.
“Due to the recent activity on the account, it appears Drake was not being 100 percent truthful while speaking to detectives.”
Hairell, 38, Daugaard’s son-in-law, was a signer on the slush fund account, though Daugaard told Hedstrom that Hairell did not want to be a signer.
Hairell earns $73,655 a year as a City Light warehouse-storekeeper, the person who orders equipment and supplies — and takes care of scrap metal.
Hairell said he would be “shocked” to learn if there was an account at First Federal in his name, according to State Patrol interview transcripts of the investigation obtained by the Peninsula Daily News.
Yet the State Patrol investigation determined his name was indeed on the account.
Lack of evidence
But the State Patrol investigation was hampered by a lack of actual evidence that would prove criminal activity occurred, Hedstrom said.
She said that up until 2012, it was a passbook savings account, which did not have electronic records.
There were no deposits into the account after it became a savings account in 2012 until it closed in 2015, during which it was tracked electronically.
“How can you prove that theft occurred if nothing was going into the account?” Hedstrom said.
There was plenty of hearsay from employees about the account, but that wasn’t enough to prove a crime took place, she said.
“I will say, the main roadblock in this investigation was the lack of records,” she said.
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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at pgottlieb@peninsuladailynews.com.
