No criminal charges will be filed against former LaneCo administrator

EUGENE, Ore. - Prosecutors in Marion County think criminal charges would be difficult to prove against former Lane County Administrator Liane Richardson after reviewing the investigation into the payroll changes that led to her firing by the Lane County Board of Commissioners.

The Lane County Board of Commissioners fire Richardson in August and finalized a settlement with her this month.

“This is being treated as the civil matter that it is: A civil dispute over a contract and separation from employment," said Mike Arnold, Richardon's attorney. "Ms. Richardson looks forward to moving past this incident.  She enjoyed her service to the county, appreciated the consistent positive reviews of her performance, and knows she left the county in excellent hands.”

The memo from Paige E. Clarkson in the Marion County District Attorney's Office to Lane County District Attorney Alex Gardner summarizes the analysis of the charges by prosecutors.

DOCUMENTS: Memo from Marion DA to Lane DA | LaneCo settlement with Richardson

Investigators focused on two ways Richardson altered her take-home pay while employed as County Administrator, Clarkson wrote.

1. Richardson requested the payroll department reduce the percentage of pay held as Deferred Compensation from 5 percent to 1 percent, effectively boosting her take-home pay 4 percent.

2. Richardson cashed out more sick time and vacation time than allowed by county policy, even for an employee within 3 years of retirement.

Clarkson wrote that the Deferred Compensation issue didn't cost the county money but would have cost Richardson more in taxes. When notified that the change couldn't be made without a change to Richardson's contract or an order from the Board of Commissioners, Richardson asked to have the percentage changed back to 5 percent.

"The alteration of deferred compensation does not rise to any criminal behavior," Clarkson wrote.

The cashing out of sick and vacation time proved more problematic for the prosecutors who reviewed the case.

County policy allows employees to "sell back" or cash out sick and vacation time, up to 80 hours per year, Clarkson wrote. Employees within 3 years of retirement are allowed to cash out up to 200 hours per year.

In February 2013, Richardson asserted she was within 3 years of retirement and started cashing out sick and vacation time, Clarkson wrote.

In April 2013, Richardson initiated a process to change county policy to allow unlimited sales of sick and vacation time  with department head or county administrator approval.

"The amendment did not address who must approve the unlimited sales if it was the administrator herself who wished to make them," Clarkson wrote.

By June 20, Richardson had cashed out almost 224 hours.

"She was advised of this overage via email but she instructed staff to 'keep doing the sales,'" Clarkson wrote. "Richardson later claimed in a July 22 email to the Board of Commissioners that she was not aware that she had exceeded the 200 limit."

By the end of July, Richardson had directed payroll to stop cashing out her sick and vacation time and "attempted to make arrangement to pay back amounts in excess of the 200 hour limit," Clarkson wrote.

Clarkson wrote that prosecutors found Richardson's efforts to cash out vacation and sick time and the continuation of the process after being told she was over the 200 hour limit "of greater legal concern."

"It is clear that Richardson had a desire to sell more than the 200 hour amount allowed as evidenced by the change she initiated to the Administrative Procedures Manual permitting unlimited sales to certain employees," Clarkson wrote. "Additionally, Richardson had conversations with a county Budget Analyst to calculate the future budget to include her selling over 200 hours in the next fiscal year.

"However, proving beyond a reasonable doubt that this was a knowing performance of an act constituting an unauthorized exercise in official duties, or in violation of statute, would be difficult," Clarkson wrote. "First, although this is disputed by Board members, Richardson claims that these change wre initially suggested by them. Second, Richardson maintains she 'didn't catch' that she was over the 200 hour limit. The email exchange regarding her overage can arguably be portrayed by Richardson as an absent-minded response to a simple inquiry about her current sales" of vacation and sick time.

Clarkson wrote that Richardson also disputes whether the county Administrative Procedures Manual applied to her as one of only two contract employees of Lane County, and Richardson has repaid the overage.

"Finally, Richardson was fired from her job," Clarkson wrote. "She has further since settled with the county and released any future claims or suit related to her employment. In return, the Marion County District Attorney's Office has agreed not to file any criminal charges."

Richardson's attorney Mike Arnold released the following statement Monday:

The Marion County special prosecutor Paige Clarkson, who was assigned to review the situation stemming from these issues with Lane County, has made a final decision not to file any criminal charges. She sums it up best by stating in her letter to Lane County DA Alex Gardner that “[d]isputes over contractual obligations are best handled in civil rather than the criminal courts.”

Richardson’s attorney Michael Arnold responded to the finding of no criminal conduct as follows: “This is being treated as the civil matter that it is: A civil dispute over a contract and separation from employment.  Ms. Richardson looks forward to moving past this incident.  She enjoyed her service to the county, appreciated the consistent positive reviews of her performance, and knows she left the county in excellent hands.”

In a letter, Clarkson also noted that Ms. Richardson’s contract provided that “5% [of Richardson’s income] would be contributed to Deferred Compensation. The County’s Administrative Procedures Manual (APM) is silent as to this specific issue [converting deferred compensation to take-home pay].” She went on to note that “[t]he alteration of deferred compensation does not rise to any criminal behavior.” 

Regarding the Time Management sales, Clarkson noted that there was insufficient evidence of a “knowing performance of an act constituting an authorized exercise in official duties.”  She noted a dispute by Board members that “Richardson claims that these changes were initially suggested by them.”  Clarkson credits the errors to an “absent-minded response to a simple inquiry about her current sales.” 

Former Lane County Administrator Liane Richardson and the Lane County Board of Directors finalized a separation agreement last Thursday.  Ms. Richardson released Lane County from all legal claims for potential breach of contract for wrongful termination stemming from a disagreement she and the county had over modification of contract provisions.  The county also released Ms. Richardson from any potential claims and agreed that the reason for the termination was based “upon the belief that Ms. Richardson sold more Time Management than was permitted under her employment contract and applicable County rules.”

The county specifically agreed in the Separation Agreement that “Employer understands that Employee expressly denies that she did anything wrongful to warrant termination by Employer.” The county also “acknowledge[d] that [Ms. Richardson] has returned all Employer property in her possession or under her control, including …purported overpayments.” Clarkson noted in her letter that “Richardson has since paid back the overage amount.”

Ms. Richardson believed that her actions were lawful and consistent with what was allowed under her contract.  She was asked by a commissioner if she could sell more of her time management in lieu of a pay raise, so she asked finance employees if that was an option.  She was told that it was an available option, and she moved forward under that belief.  Before and after exercising that option, Ms. Richardson spoke with other county employees, including two of the commissioners, about her increased time management sales.  She never attempted to keep the sales a secret or hide what she was doing.  She was told by two of the commissioners that as soon as the public safety levy had passed, they would ensure that her contract was changed to more clearly reflect that she had the ability to sell accrued time management and to change the amount of deferred compensation she received so that she could increase her take-home pay.  

Documents

Memo from Marion County DA Office to Lane County DA Liane Richardson settlement agreement with Lane County