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| 8/22/2008 9:28:00 AM | Email this article • Print this article |
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| Client and lawyer
Hartsel Fire Chief Jay Hutcheson (left) sits next to his defense attorney, Sean Paris, at the Fairplay Hotel after the hearing where Hutcheson’s felony theft charges were dismissed. The fire district has agreed to pay about $182,000 in legal bills to Paris’ firm for Hutcheson’s defense. (Photo by Mike Potter/The Flume) |
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Hartsel fire board agrees to pay $182,000 in chief's legal fees
Petty cash payments and open records non-compliance raise questions
Tom Locke
Flume Editor
Activities of the Hartsel Fire Protection District continue to raise eyebrows as new information becomes available about the district's authorization of payment of about $182,000 for Fire Chief Jay Hutcheson's personal legal fees; the district's use of a petty cash fund to make more than $1,000 in payments to Hartsel's Only Bar this past February and April and more than $4,000 to Hutcheson's Maverick Construction Co. for snowplowing; the failure of the district to comply with requests for information in a timely manner, or at all, under Colorado Open Records Law; and its billing one requestor more than $1,000 for legal bills related to her requests.
Legal fees
The Hartsel Fire Protection District, which not long ago was reporting serious financial difficulty because of the embezzlement of at least $100,000 by former bookkeeper Deborah Eakle, agreed to pay more than $182,000 in the personal legal fees of Hutcheson - incurred by him after he was arrested in April 2007 for alleged theft from the fire district - charges that were later dismissed. The fire board did so by way of Resolution No. 2007-718-1, which the board passed last July 18, 2007, and an Aug. 13, 2008, amendment to that resolution that filled in the blank for Hutcheson's legal fees. (The resolution, which is document #1, and other documents can be seen at theflume.com.)
The initial resolution passed last July reads that "it is not equitable for Chief Hutcheson to bear the financial burden of defending against the criminal charges that were brought against him by virtue of his capacity as Chief of the District." It also states: "The District hereby authorizes the expenditure of funds not to exceed $ to be determined to reimburse Chief Hutcheson for any legal expenses already incurred and to be incurred in defending against the charges brought against him and to assist in the defense investigation."
Meeting minutes
Interestingly, that resolution, or the fact that it passed, is not included in the July 18, 2007, meeting minutes (see theflume.com, document #2). Board member Susan Jones told The Flume that Robert's Rules of Order require that all resolutions be included in meeting minutes, and she said didn't know why the resolution would not be included in them and would have to check.
The minutes for the fire board are "transcribed" by Carol Burton, the wife of board member Herb Burton, for a payment of $200 per month. Jones said she takes her own notes and works with Burton on the final version of the minutes.
Connie Gray, a certified public accountant and resident of the district who ran for the board in May and was not elected, attended the board meeting on Aug. 13. At the meeting, "the auditor suggested that they amend the resolution to include the dollar amount that he gave them," she said.
"According to my notes the auditor suggested that the board amend resolution 2007-18-1 to reflect the amount of $182,224.58. This was the amount of money paid and still payable but expensed in 2007 to Pearson Horwitz (the law firm of Sean Paris, Hutcheson's attorney)," she said in a follow-up e-mail.
Board members Jones and Linda Bjorklund both told The Flume they couldn't remember what the figure was, although Jones said it was "over $100,000." And Hutcheson told The Flume it was either $162,000 or $182,000. The auditor, Dan Schommer, could not be reached for comment.
Gray also said that the actual total legal expense for 2007, including other lawyers besides Paris, was $193,992, versus a budgeted amount of $10,000, according to documents she received from the district.
In the same interview on Aug. 18, Hutcheson later told The Flume that of the $182,000, not all of the money was going to the firm of his attorney, Sean Paris, and about $20,000 of it was going to the firm of Richard Lyons, the board's attorney, and to another law firm that is representing the district in a lawsuit being prepared against a bank.
However, that is contradicted by Gray's notes as well as Jones' statement to The Flume that nothing in the July resolution was changed other than filling in the blank on the amount. Nothing in the resolution refers to amounts being paid for anything other than Hutcheson's defense.
Paying fees contingent on innocence?
According to Gray, board member Herb Burton said at the meeting that the board had resolved to pay the legal fees if Hutcheson was found innocent, and both Hutcheson and Bjorklund told The Flume that paying the legal fees was contingent on Hutcheson's innocence. Bjorklund, who was newly elected to the board last spring, while Eugene Balicki and Herb Burton were reelected, equated dismissal of the charges against Hutcheson, which occurred on Dec. 15, with a finding of innocence. "They made the resolution to pay the legal fees if he was found innocent. And he was, as the charges were dropped," Bjorklund told The Flume.
Jones and Hutcheson concurred that payment of Hutcheson's legal fees were contingent on his being found innocent. "I was to be reimbursed for all my legal fees if I was found innocent," he said.
Yet a close reading of the resolution shows no indication that paying the legal fees was contingent on a finding of innocence. Indeed, Hutcheson's personal legal fees were being paid long before the case was dismissed, and Hutcheson acknowledged that. A page titled "General Ledger as of August 31, 2007" states that a $45,472.44 check dated Aug. 1, 2007, was made out to Pearson Horwitz. (See theflume.com, document #3) That was more than four months before the Dec. 15 dismissal against Hutcheson.
How does that fit with the contention that paying the legal fees was contingent on his being found innocent? Hutcheson said that if he was found guilty, he would have then paid that money back to the district.
Foreclosure and fraud allegation
But would he have been able to pay back tens of thousands of dollars in legal fees, considering that his house had gone into foreclosure? Court records show that he defaulted on a home loan in May 2007, two months before the board's July 2007 resolution to pay his legal fees. And in September 2007 People's Phoenix Inc., the lender, filed a motion for a sale of the property by the public trustee.
"On Sept. 20, 2007, People's alleged fraud on behalf of the Hutchesons, stating: 'it appears that the funds may not be used (sic) for the purposes disclosed to the bank. Thus the statutory right to cure... does not apply.'" (See the document at theflume.com)
Hutcheson said that the fraud charge leveled by the bank was due to the criminal charges leveled against him and that the judge agreed with People's, so he had to pay off the entire loan. "I had to come up with $100,000 overnight," he said. "I borrowed it from a friend."
Regardless, it is clear that there is nothing in the July resolution that makes the payment of Hutcheson's legal fees contingent on anything. Indeed, it states that "the treasurer (who was Jones at the time) shall approve the expenditure as Chief Hutcheson's legal fees come due."
Arguments regarding the legal fees
Why should the fire district pay Hutcheson's legal fees?
"It had more to do with position than it had to do with person," Hutcheson said.
Jones takes the same view. "This was not the defense of Jay Hutcheson. This was the defense of the fire chief and the fire district," said Jones.
Does that include the board?
"That includes the board," said Jones. "The information we gathered was not just for Jay Hutcheson's defense but the future litigation that's going on." She said that includes litigation against a bank and more than that.
And how is it that Jones considered the entire fire department, including the board, a defendant when charges were filed against Hutcheson as an individual? "Because she (Eakle the bookkeeper) was a defendant," Jones responded.
Conflict of interest?
The minutes from that July 17, 2007, meeting refer to "subpoenas for the credit card accounts." Those subpoenas were used by Paris to show that Eakle had used the fire district's credit card for some personal purchases that were attributed to Hutcheson. The minutes state: "Susan (Jones) stated that Sean Paris stated that it would be in the best interest of the fire department to help pay for this, because he is getting more and more information on the credit card accountant that may be used in future law suite (sic)."
Jones told The Flume that the investigation conducted by the board included her own investigation into the fire district's volunteer fund, a couple of other people she was not at liberty to divulge, and "an investigator that was hired through Paris' office."
In other words, the board investigation of Hutcheson's activities was not arms-length, but was conducted in part by an investigator hired by Hutcheson's own attorney. As Jones saw it, it was not just Hutcheson who was being defended but the fire department as a whole.
According to the April 13, 2007, arrest affidavit by Colorado Bureau of Investigation Agent Kevin Hyland, "Eakle stated that she reported his misuse of the Hartsel FPD (Fire Protection District) credit card in 2002 and 2003 to individual Board members of the Hartsel FPD who took no action. Two board members also benefited from trips to Las Vegas where the credit cards were used (for) expenses in connection with the trip." (words in parentheses added) .
Hutcheson called the Hyland affidavit "the biggest crock of sh--."
Another view
Monica Jones, spokeswoman for the Accountability Citizens Taskforce for Hartsel, or ACT, an entity that has raised questions about actions of the fire district's board, told The Flume on Aug. 15 that she had been told that the July 2007 resolution covered only the $45,000, which was in the Aug. 1 check. "They told us that the $45,000 was paid by the resolution," she said. "And we didn't agree with that either, but we knew that that had taken place."
She said she has heard for months that the board had paid Hutcheson's entire bill, but she had no proof of it. "This seems like a misuse of taxpayer money, in my opinion," she said of the district's payment of Hutcheson's legal fees.
"It seems to me, in my opinion, that this is public funds being used for personal expense," she added.
"I don't care if it was dismissed," said Jones. "There was probable cause."
Indeed, the arrest affidavit from Hyland (see theflume.com, document #6) states that there was $63,388 in non-fire department-related charges on fire department credit cards between Jan. 1, 2004 and November 2006, and that "Hutcheson identified over $34,000 as being his own personal expenditures from the Hartsel FPD credit cards."
Hutcheson told The Flume on Aug. 18 that he never admitted to charging $34,000 in personal expenses, and that the actual number for his personal expenditures on fire department credit cards was "somewhere less than $10,000," and that included $3,000 that he paid back with a check. The rest he paid back with cash, he said.
So was Hyland lying in the affidavit?
Hutcheson wasn't willing to go that far. He said Hyland asked him to mark which charges were his, and some of them he marked as his and some of them he marked as charges he'd have to look into, and Hyland counted all of the charges marked as being Hutcheson's.
According to Hyland's affidavit, four out of five board members stated that it was inappropriate for Hutcheson to use the fire district's credit cards for purposes such as cash advances at casinos and only Susan Jones "believes that the credit card could be used for anything that Hutcheson wanted, however, the money had to be repaid by the time the Hartsel FPD was going to pay the bill."
Jones said just because board members may have thought some expenditures were inappropriate doesn't mean that Hutcheson didn't have authorization to use the credit cards for that purpose.
The affidavit also states: "Hutcheson claims since 2003 he has used cash to reimburse his personal expenditures because Eakle told him it was easier. Hutcheson has no receipts to document that he repaid with cash and provided no explanation as to why his deposits are not reflected on the accounting records or bank records for the Hartsel FPD."
Jones said that four of five directors saw Hutcheson reimburse the district with cash for personal expenses, and one of those was board member Gene Balicki. But Balicki told The Flume on Aug. 18 that he had never seen Hutcheson make such a repayment with cash.
Oddly enough, Jones was asked about Hyland's statement that Hutcheson had admitted to $34,000 in personal expenditures, and she said Hutcheson "repaid every bit of it."
That was before Hutcheson called later in the day and said he never admitted to $34,000 in personal expenditures and that the amount was really less than $10,000. In other words, the combined stories from Jones and Hutcheson result in a scenario in which he paid back $34,000 when he owed less than $10,000.
Jones also said that a ledger book kept by Eakle tracked those cash repayments by Hutcheson. Those statements about the existence of a ledger book tracking Hutcheson's reimbursements are disputed by the former special prosecutor in the case, Scott Turner, and Eakle's attorney, Suzanne MacDonald, and they are not mentioned by Hyland. When that was pointed out to Jones, she said that when the book was delivered to the Park County Sheriff's Office, it had pages with entries of Hutcheson's cash payments, but some time after delivery of the book to the Sheriff's Office, the pages containing Hutcheson's entries were torn out of the book.
The petty cash account
Records obtained by Gray raise other questions about the district's use of funds.
The board has transferred thousands of dollars a month in several different months from its general fund to "petty cash" - a separate checking account. Gray, the certified public accountant, has made several requests for information from the district concerning financial transactions this year, and has had some of them partially answered. Among the records she has received are expenditures out of petty cash for a few months (see document #4 at theflume.com). "I do not have complete records on petty cash," she said. "I do feel that a $3,000 petty cash is a little excessive."
On March 19, 2008, the board added $3,000 to petty cash from the general fund, and on April 7 it added $3,000 to petty cash, according to Gray. In addition, The Flume has obtained "Transactions by Account" documents that show, handwritten in, a transfer of petty cash from the general fund checking account for $2,000 for the month ended Oct. 31, 2007, and another "reimbursement to petty cash account" of $2,000 for the month ended Nov. 30, 2007 (see document #7 at theflume.com)
Although it's called "petty cash," at the Hartsel Fire Protection District, those words refer to a separate bank account from which checks are written. Among the checks written out of petty cash were the following:
• Jan. 8 - $1,700 to Maverick Construction.
"Per their minutes, that might have gone to snowplowing, " said Gray.
• Feb. 25 - $689.11 to HOB (Hartsel's Only Bar)
• Feb. 25 - $891 to Maverick Construction
• March 2 - $891 Maverick Construction
• March 29 - $891 Maverick Construction
• April 23 - $463.42 to HOB (Hartsel's Only Bar)
• May 6 Drive Train Industries $1441.70
(See the complete document #4 theflume.com)
Maverick Construction is a company owned by Hutcheson and his wife and son, said Hutcheson.
Meals at HOB
Why would the department pay more than $1,000 within two months to a bar? Bjorklund said in an interview that might have been to pay for lunches for volunteers during training. "The volunteers get no money," she said. "So sometimes they are taken out for a meal."
Jones also said the charges reflect bills for meals accumulated at the HOB related to volunteer training or volunteers fighting fires, and the bills go out every one to five months. She said her own store, South Park Mercantile, is also paid out of petty cash for fire department expenditures. Checks out of petty cash are used for "incidentals," but the checks could be as high as $3,000, she said.
Is it standard operating procedure for a fire district to provide its volunteers with meals at a restaurant?
"I don't care whether it is or not," said Hutcheson. "That's what we do."
Bob Olme, assistant chief at Fairplay-based North-West Fire Protection District, said his fire district, which has 23 volunteers compared with Hartsel Fire's 28 volunteers, spends "roughly $900 a year" on meals for volunteers, and that includes at least two meals a month for two out of the three training sessions the volunteers have each month. It averages out to about $4 to $5 per volunteer per meal, he said. They get their food from a restaurant or grocery store and take it back to the fire station.
He said his fire district has a petty cash fund that is "not allowed to be over $300," and it is cash, not a checking account. Among other things, it is used for meals for volunteer training, and receipts are obtained. He declined to comment on the HOB expenses by Hartsel Fire.
Dutch Kleinhesselink, the fire chief at Lake George Fire Protection District, said the fire department doesn't have a petty cash account, but the fire district auxiliary, which supplies food to firefighters on scene, has an account of $150 for petty cash. He believes not more than $500 a year flows through that account. For the most part, fire district purchases go through a credit card on which he is the only person who can sign.
As for meals, he said his fire district budgets $5,000 a year, but through July 31 of this year it has spent $1,172. It has used restaurants in the past that have now gone out of business, he said.
Maverick Construction
As for the payments to the Hutchesons' Maverick Construction, Bjorklund, Jones and Hutcheson all attributed the payments to snowplowing by Maverick for the district.
Why might the district pay out of petty cash rather than the general fund? Bjorklund said that may be necessary if a check needs to be written quickly without waiting for the monthly check-writing by the board. She did not know that Maverick was paid for snowplowing out of petty cash.
Hutcheson acknowledged the snowplowing was done by Maverick without a bidding process. First, he said, that's because "We did one time, never got any interest [from bidders]." And that was because the distance between stations is "phenomenal," he said. There is 90 miles between the five stations and six water supplies that have to be plowed, he said. He later said that snowplowing had been put out to bid in 1984, 1994, 1997 and 2000 - and in those four years no company had ever submitted a bid.
Jones said that the snowplowing was paid out of petty cash rather than the general fund because it wasn't a line item in the budget. Now that it is a budgeted item, payment will come from the general fund, she said. Hutcheson said that snowplowing will be done in-house this coming winter by an employee. "It makes better financial sense for the fire district to do it that way," Hutcheson said. Why wasn't it done before? "We didn't have a snowplow," he said. Now the fire district has put a plow on a maintenance vehicle, he said.
Both North-West Fire and Lake George Fire do their snowplowing in-house. Olme figures it cost the district, which has only two station and no water-access spots to plow, about $500 last winter for plowing. But Hartsel's a different case, he said, with a lot more drifting last winter.
Kleinhesselink said his district also does its snowplowing in-house, and it plows maybe six to eight times a year at a cost of about $1,000 a year, at most. But he said the weather in the districts should not be compared, and his district gets far less tax money than the Hartsel district.
Olme and Kleinhesselink each said his district doesn't allow fire department credit cards to be used for personal use.
Open Records
Gray, fire district resident Glenda Emmans, and another citizen, who requested anonymity for fear of retaliation against a family member, have all reported difficulty getting all their requests for public information answered in a timely manner, and sometimes not at all.
Not only that, but the fire district resident requesting anonymity was sent a bill for more than $1,000 to reimburse the district for legal fees it had incurred in connection with a public records request.
"That's not permitted under the statute," said Denver attorney Chris Beall, legal counsel to the Colorado Press Association and an expert in the Colorado Open Records Law. The statute allows a governmental entity to charge 25 cents a page for copies, and it is allowed to charge for the searching for a record, he said. But if the searching is in the normal course of business "it's generally not thought to be kosher to charge for a person pawing through files."
In addition, if a special software program is used, or if a CD is produced, the entity can charge for that. Gray said that the May minutes indicate that a CD was produced by the district's accountant in response to her request, and now the district is not giving it to her, citing a "work product" exception.
Bjorklund said she supported the $1,000 charge for legal expenses because the requestor made many calls to the district's attorney. But the parts of the bills that were circled and passed on by Hutcheson indicate three calls in which Lyons directly communicated with the requestor, and the total charge for those three bills, which listed a number of other research and communication charges, was $429.
The other charges in the $1,000 dealt with legal research surrounding the requests, drafting a memorandum to the board regarding open records requests, and so on.
Gray said that it has been "very difficult" to have her requests for information satisfied. She has not specifically cited Colorado Open Records Law in her requests, but Beall said that is not necessary for the law to kick in. The law requires a response within three days, with a possible extension of seven days.
She was also told that she would be charged $70 an hour for work done by an accountant to retrieve the information.
"They should have that information (without going to an accountant)," she said. She said she was asking for financial information for January 2008 forward, not past years. That included financial information such as check runs and minutes from the board meetings. Beall said that the district is allowed to charge for accounting services.
Gray has not been charged anything yet, but she wonders why an accountant is necessary to produce bookkeeping records for this calendar year which should be easily available to the district.
Gray said she also requested a "very basic board package" of what goes to the board members prior to the meetings. The board has also refused to provide her with that, citing a "work product" exception in the law.
Jones said Gray's requests have caused extra research by the accountant, and the board members do not receive their packets until the night of the meeting, so the packets can't be provided in advance.
Some requestors believe their personal appearance has been required to get information, but Beall said that would not be permitted under the statute.
"There's nothing in the statute that allows them to require your personal appearance," he said. It is supposed to benefit all the citizens of Colorado, and someone from across the state should be able to make a request and get it satisfied, according to Beall.
For the district, noncompliance also has extended to the timing and incomplete nature of the responses. "Everything in the second request for May 5 was information not received in the first request," Gray said. She cites one example of being bounced from Jones to Administrative Assistant Cleta Grey and back to Jones without getting the information that had supposedly been collected for her. It "went back and forth," and "was just a mess," she said.
"They don't want people to monitor them. They want everyone to blindly trust them" Gray said. "They allowed Debbie Eakle to steal money. She wouldn't have done it if she didn't feel entitled to do it."
Emmans said Cleta Grey has been cordial in working with her, but as far as timeliness, "I don't think they're ever in compliance." And in at least two instances, a request for November 2007 bank statements and a request for copies of the fire district's agreements, the district has never provided the information requested.
Hutcheson said that the district has complied with open records requests.
Case dismissal
The dismissal of the case against Hutcheson has been cited by Bjorklund and Jones as proof of his innocence. But was it? Why, after all, was the case dismissed?
The sequence of events leading to the dismissal may provide some insights. Turner, the special prosecutor on the case, was granted a motion to withdraw from the case on Nov. 26, 2007. He told The Flume last week that he withdrew from the case because he had moved to Breckenridge and taken a job there as a prosecutor for personal reasons unrelated to the Hutcheson or Eakle cases. He continued as the prosecutor in the Eakle case because it was clear she would enter a plea bargain. But it looked like the Hutcheson case was going to trial, and the Summit County District Attorney's office only has two felony attorneys and didn't have the resources to handle a trial, which takes far more time than a plea bargain.
It was "just something I couldn't handle," Turner told The Flume. So he withdrew from the case.
The case was then assigned to Elizabeth Reed in Colorado Springs to serve as special prosecutor, and she had the case only two days before deciding to drop it She filed a motion to dismiss the case, and all charges against Hutcheson were dismissed on Dec. 11 .
Turner said that he was "not really" surprised by the dismissal because a new prosecutor was assigned "a big case two months before it was set for trial, which put them in a difficult situation." They were running up against the constitutional requirement of a "speedy trial" - within six months of entering a not guilty plea - and changing prosecutors would not have been a sufficient condition to enable Reed to get a postponement of the trial, he said.
Reed said at a hearing on her motion to dismiss that the DA's office "has no reasonable likelihood of success at trial in this case, based on the evidence I'm aware of." That's because the case was "primarily based" on the testimony of Deborah Eakle, who "has been shown to have credibility issues." Secondly, she said, "it appears that five members of the Board of the Fire Protection District have indicated or are expected to testify that Chief Hutcheson was operating under the apparent authority to spend the money in the way he did. "
That statement by Reed would appear to contradict the arrest affidavit statement from CBI investigator Kevin Hyland, who stated that Jones was the only board member to say that Hutcheson could use the department's credit card however he pleased.
"Jones believes that the credit card could be used for anything that Hutcheson wanted, however the money had to be repaid by the time the Hartsel FPD was going to pay the bill, " Hyland said in the affidavit.
However, he said, "Board members Faye (sic), Sitzler, Balicki and Burton stated that it was inappropriate for Hutcheson to used the Hartsel FPD credit cards for cash advances to casinos, to purchase , to use at s, and to pay for vacations."
The and other items were later shown to have been purchased by Eakle, and Hutcheson's attorney tried to use that to cast doubts on the credibility of the prosecution's case.
But Paris never made the claim Hutcheson didn't purchase any of the items on the list, and Hutcheson has admitted thousands of dollars in personal purchases to The Flume.
He told The Flume those expenditures did not extend to the credit card charges at Bronco Billy's Casino in Cripple Creek, which totaled more than $18,000 in cash withdrawals. On the other hand, Hutcheson acknowledged, his attorney was unable to show that the withdrawals were made by Eakle.
"We subpoenaed 112 different vendors at an average cost of $1,200 a vendor," said Hutcheson. That adds up to $134,400. "Bronco Billy's was the only one that was inconclusive," he added.
According to Hutcheson, the rest showed that charges attributed to Hutcheson should have been attributed to Eakle.
Dismissal hearing
At the dismissal hearing, the board appeared to take the position that proof that Eakle had bought some of the items attributed to Hutcheson proved Hutcheson's innocence (see document #8 at theflume.com).
Jones referred to "what we had found through our own investigation, which was contradictory to everything they supposedly found." As she later indicated to The Flume, at least part of the board's "own investigation" was in reality an investigation conducted by Paris, Hutcheson's attorney. And if Hutcheson is correct in placing the costs of the subpoenas at $134,400, the Paris investigation was a large part of the board's "own investigation."
Burton said at the dismissal hearing that "our chief was not guilty of the credit card charges of personal effects and so forth. ... I don't think that the chief should have ever been charged without a proper investigation from the beginning."
Balicki said at the hearing: "I just want to reiterate that everything that we found doesn't point to Mr. Hutcheson at all."
And board member Ginger Springer said that "there has been no evidence to show that Jay has done anything."
At the hearing on the dismissal, the board members and Reed did not address the statement by the CBI's Hyland that Hutcheson had admitted to $34,000 in non-fire department personal charges out of the total of $63,388 in total personal charges on the fire department credit cards (see credit card charges on document #3A at theflume.com).
In the dismissal hearing, Reed didn't take the position that Hutcheson had not made inappropriate charges for his own benefit. Rather, she took the position that personal charges had been authorized. "It appears that there has been authorization, so that negates that theory of the charge (of theft)," she said.
But if authorization was contingent on repayment before the credit card bill was due, as represented by Jones, then nonpayment logically would have negated authorization.
So was repayment made?
According to Hyland's arrest affidavit, Hutcheson claimed he had repaid in cash at Eakle's request but had no receipts to prove it.
Gray said that a cash repayment without obtaining a receipt doesn't make sense. "If you are a businessman and you own your own business, why in the world would you hand somebody cash and not get a receipt," she said.
"He's a businessman. He owns a construction company," she said. "I find it difficult to believe, that, being a businessman, he would not cover his little tail."
Why didn't he get receipts? "I did the first couple of times," said Hutcheson. "And then it was logged down in a log book. I trusted her."
At the dismissal hearing, Judge Stephen Groome attributed the dismissal to a Sept. 14 letter from the board to its own attorney, Richard Lyons. The judge stated that " ... it appears the basis for the motion (for dismissal) is based on a two page letter from the Hartsel Fire Protection District addressed to Mr. Lyons ..."
The letter (see the document at theflume.com) states: "Three Board members have executed affidavits that establish that Chief Hutcheson was authorized to use the department issued credit cards at his sole discretion." It also states that "the Board has further assured itself that Chief Hutcheson did repay to the District his personal share of the credit card expenses."
How did the board reassure itself of that?
In a March 25, 2008, response to an open records request, board member Jones said: "The payments were requested to be in cash by the District's former bookkeeper/secretary. It appears that she may not have deposited the payments into the District's accounts. The records of the repayments were kept in a ledger book that was maintained by Ms. Eakle. ... It is our understanding the authorities may have returned the book directly to Ms. Eakle." (See document at theflume.com)
However, Hyland's arrest affidavit does not mention any such ledger book. Asked about such a ledger book, Turner, the special prosecutor who withdrew, told The Flume: "I never saw any evidence that it even existed." He said he saw a copy of a personal notebook belonging to Eakle, but no ledger recording Hutcheson cash repayments.
Suzanne MacDonald, Eakle's attorney, disputed the position of the board and Hutcheson regarding cash repayments in an e-mail on July 21, after Eakle had already been sentenced and after a restitution hearing had occurred.
"Eakle did NOT request that such repayments be made in cash, and in fact, few or none were made," she said. In addition, MacDonald said, "There was no such ledger book."
In the same May 25, 2008, letter, Jones states, "There was one $3,000 repayment that was made by Chief Hutcheson by check. That was deposited into the district's accounts and we are looking for that deposit slip."
Hutcheson told The Flume he would try to provide a copy of the check by deadline, but it did not arrive.
Interestingly, Hutcheson told The Flume that the $3,000 check covered some of the expenses for his son's wedding. That wedding was in Las Vegas in July 2006, according to Hyland's affidavit in April 2007. Hutcheson claimed the lack of repayment was due to a lack of credit card statements from the credit card companies, according to Hyland. Hyland said he contacted Bank of America, which said it provided Hutcheson with three years of credit card statements for all four credit cards on Oct. 10, 2006.
Audit 2005-2006
The audit of the fire district for 2005-2006 states that the auditing firm, Watkins and Schommer, was "not able to test expenditures of $100,555 in 2006 and $148,917 in 2005, identified as undocumented expenses."
Jones said that the amount stolen by Eakle really was the $250,000 referred to by the audit for those two years.
Note 12 of the 2006 audit states, "Expenditures exceeded budgeted appropriations during 2005 in the General Fund by $619,295, which may be in violation of Colorado State Statutes." Jones attributed the discrepancy to Eakle's theft, but that theft, even using Jones' figure of $250,000, is well below the discrepancy between actual expenditures and the budget.
Restitution hearing
At Eakle's restitution hearing on May 5, 2008, it became clear that a demand for $400,000 in restitution, which included $160,000 in legal fees for Hutcheson, was knocked down to $125,000 through negotiations. (See document #9 at theflume.com.) In special prosecutor Scott Turner's explanation to the judge, he said, "As the court recalls, the last time we were here there (were) discussions of an amount over $400,000. Through our negotiations the victim has (withdrawn) the request for attorney's fees. There were - Jay Hutcheson was requesting some restitution. He withdrew that. Once he was informed that he was going to have to testify on the stand under oath, and there were some other questionable expenses which were put forward, which the board, you know, withdrew the request on."
(Note: Bjorklund is a
correspondent for The Flume and Paris formerly wrote a legal column for The Flume.)
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