City Council releases special report- misconduct in City Hall
The Blackwell City Council has released the findings of a special investigation conducted by Oklahoma attorney and municipal judge R. Stephen Haynes, revealing that Mayor T.J. Greenfield may have violated the Oklahoma Constitution when his former concrete company provided services and materials to the city, and that two members of the Council may have improperly intervened in the daily operations of the city.
The Council voted to release the report during a special meeting Oct. 30.
Haynes began his investigation in April of this year after the Council voted 3-2 to hire him. He submitted his investigation to the Council on July 23, and the Oklahoma State Auditor and Inspector’s Office requested a copy of his findings in September.
As revealed in his 28-page report, Haynes investigated purchases made between Council members and the city, financial problems that led to layoffs of city employees in 2018, and potential violations of the state’s chain-of-command laws, among other issues.
But as it was revealed in the report, Haynes was not the first person to look into business dealings between the mayor and the city.
OUTHIER, KENNEDY MADE ‘INFORMAL REQUEST’ FOR INFORMATION ON CONTRACTS
Months before the City Council voted to hire Haynes to conduct an investigation, former City Manager Thomas “Chip” Outhier and City Attorney Bryce Kennedy made an “informal request” for an Oklahoma labor attorney to review contracts between City Council members and the city.
In the summer of 2018, the city laid off almost a dozen employees due to an “unexpected shift” in finances. When the Blackwell Police Department was told it would have to terminate officers’ employment, the Fraternal Order of Police made an extensive open records request that centered on business dealings between G&C Concrete, Greenfield’s former concrete company, and the city.
Kennedy and Outhier contacted Oklahoma City-based municipal lawyer Margaret Love in October of 2018 and asked her to look into “allegations regarding the propriety of businesses owned and controlled by members of the Blackwell City Council, contracting with, and being paid for services and materials provided to the City of Blackwell,” according to the report.
The FOP’s records request was made Oct. 3, 2018. Love met with Kennedy and Outhier Oct. 26, 2018.
Throughout her review, Love spoke with Greenfield, Webb, and “at least four employees.” But her billing documents “do not reflect” that she spoke to any of the other three Council members: Tom Beliel, Richard Braden, and Steve Marquardt. Haynes also wrote that he “has been unable to find where the requested review by Ms. Love was considered or approved by the City Council.”
“Ms. Love’s billing documents reflect that she discussed the issues reviewed by her with Mayor Greenfield on February 21, 2019, and then Vice Mayor Jon Webb on November 29, 2018, and February 21, 2019,” Haynes wrote. “Neither Ms. Love’s correspondence nor her billing reflect that any other members of the Council were interviewed or contributed to her review.”
Love’s response was given to all members of the Council during an executive session in March of this year after City Manager Janet Smith received the report. The Council voted to hire Haynes to conduct an investigation in April.
Once hired, Haynes’ first order of business was to interview city officials and employees. While each employee Haynes contacted agreed to be interviewed, two members of the Council did not.
GREENFIELD AND WEBB CALLED REPORT BIASED BUT DECLINED TO BE INTERVIEWED
After the City Council released the report during the Oct. 30 meeting, Greenfield and Webb said that the report was biased because Haynes had previously worked with Smith, and because he was a reference for her. But even though Haynes gave each member of the Council an opportunity to state his case, Greenfield and Webb reportedly declined to take theirs.
At the beginning of the report, Haynes explains how he obtained information for his investigation. Aside from looking at official city documents, he interviewed city department directors, city employees, and members of the general public.
“While each person interviewed was advised their participation in Special Counsel’s investigation was voluntary and that ultimate confidentiality could not be assured, each was requested to provide their input to assist in the process,” Haynes wrote. “Surprisingly, no person contacted refused to be interviewed.”
But when it came time for members of the Council to talk, the tune changed.
“While each member of the Council was contacted requesting their input, Mayor T.J. Greenfield and Council Member Jon Webb did not respond to Counsel’s request and were not interviewed,” Haynes wrote. “All department heads provided input, along with various employees and members of the general public.”
Greenfield and Webb did not provide input for the report, though their dealings with the city were examined in it.
PAYMENTS TO G&C CONCRETE MAY VIOLATE OKLAHOMA CONSTITUTION
The city of Blackwell paid Mayor T.J. Greenfield’s former concrete company, G&C Concrete, over $145,000 for services and materials his company provided to the city from 2014 to 2017. He allegedly received roughly $80,000 for work on the city’s event center, which was built at the county fairgrounds, according to the report.
But under state law, it’s illegal for municipal officers to be paid for work by the cities they serve unless certain requirements are met. Public officers may only contract with their cities if proper bidding laws are followed, and if at least two bids are received in each case.
In the report, Haynes alleged that Greenfield violated Title 11, Section 8 of the Oklahoma Statutes. Under that law, public officials can’t sell property to or contract with their cities unless those cities have fewer than 5,000 residents, and unless there is no other business of that type within five miles of the city limits. But even if those criteria are met, the official cannot receive more than $15,000 per year for work his company does for the city.
Haynes found that the exceptions allowing officials to do work for cities do not apply to Blackwell, as the town’s population is greater than 5,000 – and because Greenfield’s company received more than $15,000 per year from the city, according to the report.
Haynes reported that Outhier “repeatedly assured” city employees that Greenfield could legally contract with the city. In the report, two sources said Outhier had obtained the city attorney’s approval for Greenfield to do so because the mayor was the only provider of concrete services within 20 miles of the city limits. But even though Kennedy reportedly “admonished” this interpretation of the law, both Outhier and Greenfield “chose to continue prohibited business dealings through the relevant period,” the report said.
“Although not fully addressed in Ms. Love’s review, the exceptions to the Prohibited Conduct provisions of the Act, even if otherwise valid, would not apply to Blackwell officials,” Haynes wrote. Haynes said that the services and materials provided to the city by G&C “violate the conflict of interest laws of the state of Oklahoma.”
Haynes said he was “unable to determine” how Outhier and Greenfield “arrived at their erroneous interpretation” of the law.
While Title 11 does make some provisions for officials to contract with their cities, the Oklahoma Constitution does not.
Article 10, Section 11 of the Oklahoma Constitution deems it a felony for public officials to receive public funds by doing work for their municipalities. It reads: “The receiving, directly or indirectly, by any officer of the State, or of any county, city, or town, or member or officer of the Legislature, of any interest, profit, or prerequisites, arising from the use or loan of public funds in his hands, or moneys to be raised through his agency for State, city, town, district, or county purposes shall be deemed a felony. Said offense shall be punished as may be prescribed by law, a part of which punishment shall be disqualification from office.”
Violation of Article 10, Section 11 is a felony, while violation of Title 11, Section 8 is a misdemeanor. But any contracts in violation of Title 11 are “void and subject to repayment,” Haynes said.
Greenfield wasn’t alone in doing work for the city. Webb, who owns a local locksmithing shop, also provided materials and services to the city, though he reportedly “reimbursed Blackwell for all payments made to him for those services,” according to the report.
Even though Webb allegedly repaid those funds, Haynes said the “liability for any violation under Article 10, Section 11, of the Oklahoma Constitution remains.”
Certain direct dealings between public officials and municipalities are barred under law, and certain indirect dealings may also be illegal.
TONKAWA WAS ALLEGEDLY USED AS A “STRAW MAN” FOR BLACKWELL TO BUY G&C EQUIPMENT
G&C Concrete shut down in early 2018, according to records obtained by the Journal-Tribune. The company’s assets were auctioned off April 10 of that year, and the city of Tonkawa bought equipment and materials from the company.
Then, Tonkawa turned around and sold that equipment to the city of Blackwell. But the items never even left G&C property.
At the G&C “liquidation” auction, conducted by Lippard Auctioneers, the city of Tonkawa purchased a group of 81 concrete blocks, a group of 35 concrete blocks, an 8’ snow-plow blade, and a 7’6” snow-plow blade, according to the report.
Seven days after the auction, the Tonkawa City Council deemed those items surplus during a regular city meeting. And six days after that meeting, the city of Tonkawa sent an invoice to the city of Blackwell for the same items.
During a May 3, 2019 meeting, Greenfield and the rest of the Blackwell City Council voted to formally purchase the items from Tonkawa for a total of $5,113.50. But none of the records Haynes examined “reflect any disclosure of the original source of the items other than their purchase from Tonkawa,” the report said.
Haynes spoke to two city employees about the purchase. They said other city employees felt that the way in which the city bought the items “was structured as it was in an attempt to conceal a potential conflict of interest. The Auction Offering Materials clearly identify the ‘Seller’ as T.J. Greenfield,” the report said.
Despite being purchased first by Tonkawa, the concrete blocks and snow-plows didn’t move an inch before they were bought by Blackwell. The Journal-Tribune has confirmed with a source close to the matter that Blackwell employees picked the items up from G&C Concrete after the city purchased them.
Haynes said that the dealing would “likely constitute at least an indirect receipt by the seller.”
“The use of Tonkawa as a ‘straw man’ could suggest that there was an attempt to conceal the transaction from the public,” Haynes wrote.
If the dealing violates the Oklahoma Constitution, it may also be considered a felony, Haynes wrote. Under Oklahoma law, conspiracy to commit a felony is also a felony.
Haynes reiterated that Greenfield did not respond to his interview request.
“As previously indicated, Mayor Greenfield did not respond to Special Counsel’s request for input to this Report,” he said. “As a result, no further information explaining an alternative purpose behind the structure of the transaction with Tonkawa has been suggested.”
Throughout the report, Haynes points out that the city has struggled with understanding purchasing procedures in cases like this one. But the city also struggled with understanding reports from the former chief financial officer.
OUTHIER, COUNCIL ‘OVERCONFIDENT’ IN MEACHAM
City staff reportedly warned Outhier and former Chief Financial Officer Meredith Meacham Wilson months before the city laid off employees in 2018 that the city’s finances would likely go into the red if spending didn’t change. But their concerns were not brought to the Council, the report alleges.
Staff reported to Outhier and Meacham that the amounts of money the city was spending – including the cost of “overruns” for the construction of the event center at the county fairgrounds – would “likely result in a deficit position for Blackwell before June 2018,” the report said.
“Staff indicated that Ms. Meacham continued to reassure both the Staff and Mr. Outhier through March, 2018, that the financial outlook for the City was positive and under control,” Haynes wrote. “As a result it does not appear that the Staff’s concerns were forwarded to the Council or formally addressed by Ms. Meacham.”
Haynes wrote that Outhier and the Council had an “over confident trust” in Meacham’s work. Outhier and Meacham also had what Haynes called an “extraordinarily informal working relationship.” While the report said no improper conduct occurred between the two, Meacham’s financial statements to the city were “rarely questioned and reviewed” by Outhier or the Council.
“[E]ven when it appeared that Ms. Meacham was delivering ‘bad news,’ there was little to no inquiry from the Council,” Haynes wrote.
In Love’s report, she wrote that Meacham had a “’failure to be sufficiently affirmative in her warnings on spending prior to the Spring of 2018,’” the report said.
“Ms. Love’s perception that there may have been a lack of understanding by the City Council regarding the City’s financial statements and information … appears to have been directly on target,” he wrote.
According to Haynes, that wasn’t the only “lack of understanding” city officials had. According to the report, the mayor and city attorney had been “struggling” to follow the state’s chain of command laws.
GREENFIELD, WEBB, AND KENNEDY ALLEGEDLY ‘INTERVENED’ IN DAILY OPERATIONS
During Outhier’s tenure as city manager, the city reportedly lacked “daily city management leadership, direction, and financial oversight.” So Greenfield, Webb, and Kennedy came in to “fill the void.” But by stepping into daily operations, they stepped out of line with the law, the report alleges.
According to the report, city staff said that Outhier was “not well organized” as city manager. They also said he “became focused on narrow issues for which he had a particular interest.” One of those was the event center at the county fairgrounds, staffers said.
Haynes said it was “understandable” for the three men to ensure that daily operations continued, but doing so “not only constituted a violation of law, but created a void of … dependable central management at the helm,” Haynes wrote. “Staff was caught between what they were sometimes told by the City Manager, sometimes by the City Clerk, sometimes by the City’s Elected Officials and sometimes by legal counsel.”
This lack of leadership created “anxiety, apprehension, frustration and frankly anger” among staff, according to the report.
Haynes found several instances of “improper intervention” that were “substantially outside the permissible activity of elected officials.” One of those incidents took place May 4, 2017, when Greenfield and Kennedy reportedly had a “counseling session” with a city employee who had used “excessive sick leave.”
“This is a personnel issue that required the direct intervention of the City Manager and Personnel Supervisor in order to preserve consistent dealing with employees and to assure that both applicable law and personnel policy are complied with,” Haynes said.
Another instance: During the 2018 layoffs, an “ad hoc” city budget committee gave city department heads “specific budget and personnel cuts, even with Departments represented by collective bargaining.”
“It is no wonder that this response to the budget crisis was met with swift intervention of the FOP,” Haynes said.
Haynes said that daily operations are to be handled only by the city manager in the council-manager form of government, which Blackwell operates under. He questioned why Outhier’s “lack of attention” wasn’t immediately addressed.
But according to some of Haynes’ sources, a “Council Member” may have preferred to have the control that Outhier gave up.
“Some of those interviewed suggested that, based on conversations between the City Manager and Mayor Greenfield which were overheard or which were later disclosed to those interviewed, the lack of dealing with assured job performance by the City Manager was, in part, a result of Council Member’s preference to have hands-on authority in daily operations,” Haynes wrote. “Again, the downside of intervention by elected officials besides its illegality is the lack of reliable and stable chain of command authority from a City Manager upon which Staff can rely … .”
OUTHIER WAS RELUCTANT TO RESIGN
Outhier resigned Nov. 8, 2018, three days after Love began interviewing city employees for her report.
At the November meeting in which the Council voted to accept Outhier’s resignation, Greenfield said Outhier was ready to retire. But before he ultimately decided to hang it up, Outhier told city employees he did not want to quit, according to the report.
Kennedy and Outhier were “long time good friends,” and Kennedy promised Outhier that he would tell him “’when it ever looked like he needed to go,’” according to the report.
Kennedy approached Outhier “shortly before” the November meeting when the Council accepted Outhier’s resignation. Kennedy reportedly told Outhier that “’it was time to go’” because the city’s recent layoffs had left Council members dubious of his performance.
But Outhier, sources say, wasn’t ready to throw in the towel.
“Several sources, including Mr. Kennedy, reported that Mr. Outhier resisted the idea of resigning and had later told citizens and staff that he did not want to retire when first approached,” the report said.
The three Councilmen who spoke to Haynes said they did not know that Kennedy had spoken to Outhier and told him that it was “time to resign.”
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