Investigation of Former Laguna Niguel Mayor Shows No Wrongdoing

SPENCER CUSTODIO, Voice of OC

Laguna Niguel City Hall

A Laguna Niguel city investigation found former Mayor Jerry Slusiewicz committed no wrongdoing after the former city manager claimed Slusiewicz leaked confidential information to jeopardize future employment prospects and allegations by other employees of bullying and discrimination.

But the city, which made public the accusations against Slusiewicz, is refusing to release the investigation’s findings that clear him.

“It’s a personnel item,” said Mayor Elaine Gennawey. “Personnel items are confidential — it has been completed.”

Human Resources Director Debbie Bell cited a broad state law which prevents disclosure of documents like financial records, portions of law enforcement investigations, draft contracts, among many other records.

However, Voice of OC open government consultant Terry Francke said the law the city is citing isn’t enough to exempt it from disclosure.

“If the exemption is so-called personnel matters, the courts have repeatedly ruled that that exemption is not applicable to complaints, or investigations or the results of investigations of serious misconduct allegations,” Francke said.

“It may be fine for evaluation of performance in general, but when the investigation is the result of complaints about improper behavior, then the complaint, the investigative findings and what — if anything — was done about those findings becomes a matter of public record,” he added.

Francke said just because the city hired a lawyer to conduct the investigation, it does not grant the results an attorney-client privilege either.

“In other words an attorney may be the person you hire to mow your grass, but communications about that job would not be privileged. If the attorney was hired to advise or represent a client on legal matters, then that kind of communication would be privileged,” Francke said.

In spite of the city’s refusal to release the findings, Voice of OC obtained a copy from Slusiewicz. In the letter, the city asks Slusiewicz to not release the results or the letter. 

City employees claimed Slusiewicz harassed and bullied them and the council voted for the investigation Sept. 5. The investigation conclusion letter, dated Feb. 7, shows investigators looked into a claim from former City Manager Rod Foster who alleged Slusiewicz leaked information that jeopardized Foster’s future employment.

There also were claims of bullying, harassment and unlawful conduct by Slusiewicz from Finance Director Steve Erlandson and Human Resources Director Debbie Bell. Additionally, Bell claimed that Slusiewicz violated Title VII of the Civil Rights Act of 1964, which prohibits employer discrimination of employees based on gender, race and religion.

The investigation was conducted by Leslie Ellis of Ellis, Buehler, Makus on behalf of the city.

“Although the investigator determined that your treatment of Ms. Bell and other employees was appalling and abusive, the investigator did not find conclusive evidence substantiating the allegation that your conduct towards female employees was based solely on gender,” reads the letter.

Slusiewicz said he was rarely at city hall and worked from his office across the street.

“I don’t even work there — I was rarely there except for meetings,” Slusiewicz said. “They (the investigator) only talked to Erlandon and Bell — the people who brought all this stuff.”

The accusations were leveled against Slusiewicz after he started finding evidence last July of a $410,000 contract overrun for tree trimming services through an ongoing partial audit the city’s contracts by Santa Ana-based auditors the Pun Group. The overruns on the contract with West Coast Arborists happened over a two-year period.

“Basically what happened is I blew the whistle on the biggest known financial oversight in Laguna Niguel’s history,” Slusiewicz said. “Steve Erlandson completely failed in his duty to monitor contract limits … I was publicly and vehemently calling out the finance director (Erlandson).”

“It was a malicious prosecution,” Slusiewicz said of claims against him and the investigation.  

He also said the investigator didn’t speak with other mayors he worked with and the employees that were interviewed were under pressure because they were subordinates of Erlandson, the interim city manager at the time and Bell, the interim assistant city manager.

Former Anaheim Assistant City Manager Kristine Ridge became the Laguna Niguel city manager in January.

Bullying Claims and Contract Overruns

A special City Council July 24 meeting was held about Foster’s claims against Slusiewicz and other claims from a business owner and a theater director that Slusiewicz tried to use his elected office to his advantage. It was Foster’s last day at the city.

The council, at the July 24 meeting, voted to have a special meeting before Aug. 7, which didn’t happen.

“The City Council authorizes and directs the City Attorney to report on the status of the matters set forth in this report at a special meeting to be held on or before August 7, 2017,” reads the council-approved recommendation at the July 24 meeting.  City Attorney Terry Dixon made the recommendations to the council.

The special meeting didn’t happen until Aug. 14.

Francke said while it’s desirable to have the meeting within the timeframe the council voted for, “there’s no law compelling it do so under these circumstances.”

Bell, the Human Resources director, told Voice of OC no investigation was conducted into the claims raised at the July 24 meeting.

But Slusiewicz said the investigators asked him about those July 24 claims also. “They looked at everything,” he said.

At the Aug. 14 meeting, the council was going to decide on the claims raised July 24 and to remove the largely ceremonial title of mayor from Slusiewicz, but he would have remained on the council.

“…the City Council finds that evidence and testimony to be credible,” reads the resolution.

But before the council deliberated and voted on the item, Slusiewicz stepped down as mayor at the meeting and gave the city clerk his resignation letter as mayor as he walked out of the meeting.

Slusiewicz said he did it to avoid the vote and the claims entering the official city record that stemmed from a “kangaroo court.”

Audit Uncovers Multiple Contract Overruns

The auditors found overruns on eight of the 21 contracts they looked at. The Pun Group auditing firm, at the Sept. 5 city council meeting, also recommended expanding the scope of the partial audit.

Some council members accused Slusiewicz of tampering with the auditing procedures while the audit report was being finalized. But representatives of the auditing firm Sept. 5 said everything was done according to procedure, including not giving the draft report to Dixon, the city attorney.

Dixon claimed, at the July 24 special meeting, that he requested the findings and was denied access by Slusiewicz.

“That’s the first time, I think, since I’ve been the city attorney where I was denied a copy of a document,” Dixon said at that meeting. “I sent an email to Mayor Slusiewicz on Friday, July 7, requesting the … copy of that draft audit. We talked later that day and what I have to say, in a very heated conversation, and he wouldn’t provide a copy of the audit.”

At the Sept. 5 meeting, Pun Group managing partner, Ken Pun, said Dixon wasn’t privy to the document before its release.

“First of all, the city attorney is still an outside party. According to agreed upon procedures, the specified party is not the city attorney,” Pun said, adding that Slusiewicz and Councilman Fred Minagar instructed the group to get city management’s responses to the findings to finalize the findings before handing the report over to Dixon.

Contract overages continued to be a problem for Laguna Niguel when they approved a $2.1 million increase in existing contracts at the Sept. 19 meeting.

Slusiewicz tried to get an audit of 200 of the city’s 674 contracts at an Oct. 3 meeting, but failed to get any traction. The council instead voted to have the Investment Banking and Audit Committee review city contracts.

After finding a potential bullet hole in his Laguna Niguel business office window, Slusiewicz resigned from the council Dec. 5.

“I just couldn’t put my family through it any more, I couldn’t put my employees through it anymore,” Slusiewicz said, adding one of his employees vomited when she came in and saw the sheriffs and the possible bullet hole. “Her husband told her to quit that day.”

Contract limits and the to-date amounts are now listed on the city’s check register, a list of all monthly expenditures made by the city for various things from supplies to contract services.  

“Through my efforts, going forward, the city’s contracting policies are forever changed,” Slusiewicz said.

Spencer Custodio is a Voice of OC reporter who covers south Orange County and Fullerton. You can reach him at scustodio@voiceofoc.org. Follow him on Twitter @SpencerCustodio