Dr. Kardasz -
Read the following report and consider:
1. Which typology of unethical behavior was exhibited by the accused?
2. Which decision making process might have prevented the accused from making the wrong decision?
Typologies of unethical behavior - http://kardasz.org/CorruptionTypologies.html
Decision making processes - http://kardasz.org/Decision_Making_Tools.html
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Investigator outlines more details of Denison probe
By Terry Dillman Of the News-Times
A bank account, donated vehicles, a property agreement, laptop computers, and a dead horse figure prominently in conclusions drawn by a state ethics commission investigator looking into allegations of misconduct by Toledo Police Chief Don Denison.
After a lengthy preliminary review of complaints filed by Toledo area residents Mary Johnson and Lowell Neal in January, Oregon's Government Standards and Practices Commission decided in April to proceed with a more in-depth investigation into six of the 80 allegations lodged against Denison. Don Crabtree, GSPC's investigator issued two reports - a 14-pager on his findings about Neal's allegations, and 17 pages detailing his findings from Johnson's complaints.
Neal's complaint and Crabtree's findings pertaining to it appeared in the July 5 edition of the News-Times.
Johnson's more extensive complaint focused on a variety of issues. The GSPC staff sifted through Johnson's allegations, ending up with only five under the commission's jurisdiction.
Outside bank account
Denison provided oversight for the Explorer Scout, Star Tech, and Challenge Camp youth programs in the Toledo area. Star Tech provides participants with experience and training in computer use and repair, and Challenge Camp is an annual two-week event on property owned by James and Betty Denison.
According to the report, City Manager Pete Wall told Crabtree that Denison "made all the decisions" in managing those programs. Wall also said the police chief "did not, at any time, submit a written notice to him disclosing ... a conflict of interest with regard to any of his actions."
Funding for youth activities derived from private donations and public funds from the city and Lincoln County.
"It appears that some funds were used to buy and sell state and federal surplus property," Crabtree noted. "Some money from surplus property transactions and surplus equipment were used to support youth activities."
Prior to June 22, 2004 Denison managed funds for the Explorer program under the police department's forfeiture/seizure accounts, with the city finance department maintaining and auditing account records. On that date, he opened a personal business account under the name "Toledo Police Explorer Program - Don Denison," using his personal Social Security number. Although Denison and Maria Waldrip were both authorized to sign checks from the account, it "required only one signature on checks."
During a June 8 discussion, Waldrip told Crabtree she did not sign any checks drawn from the account.
"It is unclear whether the idea for the account was Mr. Denison's or that of the city manager Mr. Wall," Crabtree stated. "They both refer to discussions they had before the account was opened." What is clear, according to the report, is an admonition from Wall and City Treasurer Polly Chavarria, advising Denison such an "outside" account "must not be linked to the city." No city money could go into the account, and checks from the account "were to require two signatures."
Crabtree cited Denison's "understanding of these conditions" in an April 4, 2004 e-mail message to Wall.
In May 2005, when Wall and Chavarria "discovered that city/county funds had been deposited into the 'outside' account, they ordered it closed." They returned the account balance to city-managed accounts and into city financial records.
After reviewing pertinent documents, Crabtree "identified several transactions and actions ... relevant to provisions of GSPC statutes. Denison signed five checks (a total sum of $872.74) in November and December 2004 made payable to four different relatives for "travel expenses" and "labor." Crabtree focused on an itemized list of travel-related expenses Denison submitted to the city finance department "on or about" Dec. 8, 2004.
"Most of the expenses were incurred by both Mr. Denison and Mr. (Oliver) Johnson during the course of acquiring and transporting surplus equipment," the report noted.
Crabtree found itemized expenses for Johnson "were the same as" those Denison had already paid Johnson in November from the outside account. A city check for $1,146.77 issued to Denison Dec. 16, 2004 included the $472.74 already paid. Prior to closing the outside account, Denison deposited $550 on May 26, 2005. Denison's written explanation to the finance department "indicated the deposit included payment for a computer and the return of the duplicate reimbursement."
Conclusion: Each of the five checks issued to relatives constitutes a violation of ORS 244.040(1)(a), and failure to notify the city of "an actual conflict of interest" in writing those checks resulted in "five distinct violations" of ORS 244.120(1)(c).
Denison's two-check $472.74 reimbursement to his father-in-law from the outside account, followed by obtaining a personal reimbursement from the city for the same $472.74, then returning the money six months later as part of a$550 deposit into the outside account "resulted in Mr. Denison gaining an interest-free loan from the city for approximately six months," and added another "distinct violation" of ORS 244.040(1)(a).
Donated vehicle sales
Denison solicited and accepted vehicles as donations to help fund the Explorer program, selling them through Oregon's surplus property sales program.
"Most of the donated vehicles" belonged to either Denison or his relatives, Crabtree noted. "When a vehicle was sold, the surplus sales office sent the proceeds to the city after deducting a service fee." Denison "submitted a statement to the finance department, designating what to pay to the donors, and the balance remained in support of youth programs." Vehicle donors received "on average" 80 percent of the proceeds.
Crabtree's report listed payment requests totaling $7,704 from seven vehicles sold by Denison and two relatives between March 1, 2004 and June 9, 2006.
Conclusion: "Five memorandums prepared by Mr. Denison requested payments to him and/or relatives," the report stated. Failure to notify his "appointing authority" in writing about the conflict of interest in making the requests resulted inn five separate violations of ORS 244.120(1)(c).
Property use agreement
City Manager Pete Wall provided background information on the agreement between the city and James and Betty Denison for the use of their property for the youth Challenge Camp and other activities.
According to Crabtree's report, Wall "indicated he has never met James or Betty Denison, nor did he discuss the agreement with them. He has never been out to the property."
Denison approached Wall in 2003 with the idea of an agreement. Wall, City Attorney Jim Ruggeri, and Denison "discussed the proposal and drew up an agreement" that Wall and Denison's parents eventually signed. Denison "acted as the intermediary," taking the agreement to his parents for signatures, then returning it to the city. Wall signed the document Aug. 14, 2003, and the Denisons signed it two days later. The effective date for the original two-year agreement was July 1, 2003, subject to annual renewals after 2005.
Crabtree referred to excerpts from the agreement stating the city would make "certain limited improvements" to the property "for the benefit of the camp and the owners" - citing brush removal, pasture improvements, mowing, and recreational equipment installation. The property owners also "acquire ownership over any improvements, recreational equipment, storage buildings, or other improvements remaining on the property" when the agreement ends.
Wall told Crabtree that Denison "managed and oversaw all of the activities that occurred under this agreement" and "managed the expenses." As far as Wall knew, volunteers provided most of the labor, and he "did not believe city personnel or equipment had been used out at the property."
The city finance department provided copies of receipts and documents Denison submitted indicating the cost of equipment and materials for improvements made on the property.
During Crabtree's preliminary review, Denison "provided his explanation" of the agreement, and "described its uses."
The 60-acre site located about 18 miles outside of Toledo features a horse pasture, tree farm, and 12 acres historically used as a campsite. In addition to Challenge Camp (initiated in 1999), church groups, scouting organizations, the Sheriff's Posse, and Denison's "extended family" use the campsite each summer.
The city's Explorer Post raises funds for the Challenge Camp, and the city provides "soft costs" such as staff time.
Denison said he is "the ultimate decision-maker" regarding improvements on his parents' property. According to a summarized list he submitted, those improvements include annual mowing, re-seeding grass, removing blackberry plants, widening the roadbed, sloped ground for an amphitheater, eight picnic tables, benches, a fire pit, river bank stairs, fence relocation and repair, a four-stall horse paddock, and a skid-mounted storage shed.
Crabtree's report listed 19 items and services - provided between 2000 and 2005, with a combined value of $20,260 - "purchased with city funds or obtained as state or federal surplus by the city." The largest expenses covered a tractor with a brush hog (acquisition value $6,640), tractor shipping ($5,100), and tractor repair ($4,126.97). According to the report, Denison referred to the property as "the SWAT training and Challenge Camp facility."
Lt. Dave Carey, patrol commander with the Lincoln County Sheriff's Department, told Crabtree the county's Interagency SWAT, Interagency Narcotics Task Force, or the Sheriff's Posse never trained at the property. "He recalls Mr. Denison indicating that the property would be available for that purpose, but he never pursued the matter because he did not believe it offered any training potential," Crabtree added.
The investigator interviewed Sheriff's Deputy Chris Miller - a former Toledo police officer who served on the SWAT team while at Toledo and remained on it after joining the Lincoln County Sheriff's Office in September 2005 - and Ken Real, a former Toledo police officer now with the Newport Police Department. "Both told me they knew of no police training, including SWAT, being provided on the property," Crabtree noted.
Conclusion: "When Mr. Denison used his official position to gain the agreement between the city and his parents, then made decisions regarding maintenance, improvements, and equipment acquisitions for the property, he committed one violation of ORS 244.040(1)(a)," Crabtree declared.
Denison also had a conflict of interest when he participated in discussions with city officials about the agreement with his parents. Normally, failure to declare such a conflict in writing is a statute violation. In this case, Crabtree cited insufficient evidence, because "in his discussions with the city manager, the content of the conversation" focused on the agreement and the city's use of his parents' property, which verbally satisfied the disclosure requirement.
Laptop computers
Two used HP Pavilion laptops purchased in 2003 for $3,210 had glitches resulting in the loss of "critical data." After warranty repairs, Denison "decided to have his children test the two laptops at home" by using them for schoolwork and computer games "to test the reliability." Denison told Crabtree he currently uses one of the laptops for police work, taking it home to do department work during off-duty time. He acknowledged the children's games and schoolwork remained on one of the computers, but "it did not interfere with" its use for official business.
When Denison tried one of the laptops in a patrol car as a way of providing officers with "a mobile data terminal," others discovered the personal files on it.
Sergeant Mark Fandrey, former officer Ken Real, and Toledo Fire Chief Will Ewing all reported seeing the information. Fandrey said he deleted the personal information after Real complained about it, then set the laptop aside because he and other officers "do not use laptops in their work."
Conclusion: Denison "admitted, and others confirmed" that he took one or more laptop computer from the police department "for his children's personal use," resulting in a single violation of ORS 244.040(1)(a).
Horse burial
Veterinarian Dennis Smialek, working for the Newport Animal Clinic headed by Steven Brown, DVM, euthanized a horse belonging to the Denison family on June 11, 2004. Using a city backhoe operated by city employee Dale VanNatta, and a police escort, Denison buried the horse on a farm off Christiansen Road near Toledo.
According to the investigation report, Denison cited the burial as an emergency occurring during a weekend.
He also said the city has a fee schedule of rates charged to citizens for use of city equipment, providing a list indicating a cost of $40 for a backhoe and $25 for the operator as outlined under Toledo Resolution No. 1150. "While it was not his intention at the time,' Denison cited funds he has donated to the city explorer program and Challenge Camp - $750 on Dec. 17, 2003, $417 on April 21, 2004, and $30 on June 30, 2005 - as "sufficient reimbursement" to the city for what he estimated as about 40 minutes of equipment and operator time.
Brown said the horse "was lame and had difficulty standing." The normal practice for disposing of a horse carcass is to use a backhoe and bury the horse "near where it dies."
Smialek - now in Bennett, Colo. - told Crabtree the call to put the horse down was not an emergency procedure. All such cases he handled for Brown were scheduled appointments.
"He believes the euthanasia was probably scheduled at least 24 hours in advance," the report noted.
By the time Smialek arrived, the backhoe operator had almost finished digging out the burial pit. He and another person coaxed the horse near the pit, where he "put it down." He and several others moved the dead horse into the pit, and the backhoe operator filled it in.
Herb Jennings, former public works director, said Denison asked VanNatta to use the backhoe for the burial. VanNatta "sought permission from his supervisor George Harden, who was relatively new to public employment," the report stated. After getting permission, VanNatta drove the backhoe to the site, with a police car escorting him "at some point." When Jennings found out about the incident later, he told Harden such use of city equipment "was not permitted," noting that "the city does not run a rental service."
Wall said he later told Denison such use of city equipment "was inappropriate."
Conclusion: Denison "used his position to gain the use of a city backhoe, city police car escort, and a city employee to bury his daughter's horse on a farm outside the city limits," Crabtree stated, noting those actions as a violation of ORS 244.040(1)(a).
"There is a preponderance of evidence to indicate that Mr. Denison committed 9 violations of ORS 244.040(1)(a) and 10 violations of ORS 244.120(1)(c)," Crabtree concluded.
The first statute prevents public officials from using or attempting to use their positions to gain a financial benefit that would otherwise be unattainable. This also applies to financial benefits for other family members. The second statute requires public officials to disclose any conflicts of interest, preferably in writing, to an "appointing authority."
Deliberation by commission members began at 9 a.m. today (Friday) in Salem. Crabtree said they would either dismiss the matter, or send it on to a "contested case" hearing.
Because the investigation had not reached the contested case level, Friday's session was not open to "lengthy argument," L. Patrick Hearn, GSPC's executive director, stated in a June 28 letter notifying Johnson, Neal, and Denison's Portland-based attorney Stephen A. Houze about the pending decision.
Hearn told them they might have permission to make "brief oral statements" under GSPC rules.
(NOTE: This is the second of two stories detailing the GSPC investigator's findings. An account of the commission's decision and the potential ramifications will appear in the July 12 issue.)
Terry Dillman is a reporter for the News-Times. He can be reached at 265-8571, ext. 225, or terry.dillman@lee.net
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