Tue, Sep 02, 2014 ●
BathHarpswellTopshamBrunswickCumberlandNorth YarmouthFalmouthFreeportPortlandCape ElizabethScarboroughSouth PortlandChebeague IslandYarmouth

South Portland official settles embezzlement case, claims no impact on city job

News

South Portland official settles embezzlement case, claims no impact on city job

SOUTH PORTLAND — Dana Anderson, the director of the city's largest municipal department, has settled a lawsuit that accused him of embezzling more than $37,500 from a local nonprofit association of basketball officials.

While unrelated to his city job, some aspects of the case – including the alleged transfer of funds to his daughter – could raise questions about the way Anderson runs his department, where two permanent employees and a former paid consultant are his relatives and it is common to accept donations for city services without oversight by the City Council.

Anderson is in charge of the Parks, Recreation, Public Works and Libraries departments.

Anderson, who described the agreement as a "personal matter," declined to say how much he agreed to pay to settle the claim by the International Association of Approved Basketball Officials. An IAABO attorney said Anderson did not admit any wrongdoing in the settlement.

According to documents filed in Cumberland County Superior Court in Portland, the IAABO filed embezzlement charges against Anderson in May 2008. The parties reached a financial settlement on April 6, a day before they were scheduled to appear for a court hearing. 

The complaint alleged that Anderson, who was the association's treasurer from 1988 to 2003, embezzled the money over a period of nearly seven years, from 1996 to 2003, and willingly destroyed and/or failed to keep good financial records.

Anderson and his attorney denied the allegations and tried to have them dismissed, arguing the charges were too old to be prosecuted. Anderson maintained his innocence on Tuesday and said he agreed to settle the case so he could put the issue behind him.

Attorney Robert Smith, who represented the basketball officials association, would not disclose the terms of the financial settlement, other than to say he was also glad to put the matter to rest . He said the IAABO executive committee did not want to discuss the case publicly.

"It was settled amicably by both parties," Smith said. "We have no ill will towards Dana Anderson. This has been going on for a while, we're just glad to put this behind us."

Anderson said he believes the embezzlement charges were brought against him for personal reasons, because he didn't get along with several members of the IAABO executive committee.

"It was bogus," Anderson said, and unrelated to his city job. "That (case) has nothing to do with my work for the city."

As South Portland's director of Parks, Recreation, Public Works and Libraries, Anderson oversees an annual budget of nearly $9 million. That budget has increased from $200,000 when Anderson first became parks and recreation director for the city 30 years ago, because oversight of the Public Works Department and public libraries have been added to his responsibilities. Anderson is paid more than $100,000 annually and has use of a city vehicle.

At a city budget hearing Tuesday night, Anderson, who was answering a
question about why fees are not charged for use of  Wainwright Fields, said
that some groups donate money to help offset the costs of labor and
fertilizer for the facility as a sign of their appreciation. He said a
group planning a lacrosse tournament on June 4, for example, has offered $1,000, and
other groups have done the same in the past.

City Manager Jim Gailey said there are adequate controls in place to prevent any department head from tampering with city finances, including an annual audit by an outside company. Gailey said Anderson does not have direct access to his department's funds.

"(Anderson) is not in direct relationship with that money," Gailey said. "We have accountants watching every step of the way. We have controllers and finance directors every step of the way. We also have the annual audit that rips through our files and there has been nothing ever picked up."

"I feel comfortable with the safeguards the finance office has," he said.

However, although donations of much smaller amounts must be accepted publicly by the City Council, Gailey said none of the parks and rec donations go through that
process. He referred a reporter to Anderson for information about how donations are accepted from outside groups. 

"I
do not process any donated funds," Anderson said, indicating checks are made
payable to the city and sent by his staff to the Finance Department and city clerk. "(In) almost all
cases, I'm not even involved, other than notification of the intent to
donate."

But questions have been raised before the City Council about Anderson's hiring of relatives, including his receptionist, Siggie Espe, who is his sister-in-law, and his sister, Marcia Agger, who was hired as a temporary consultant last fall. Family involvement was also noted in the IAABO embezzlement case, which alleged Anderson improperly paid his daughter $1,000 from the organization's funds. 

Human Resources Director John McGough said Agger, who was previously employed as an office manager for Dead River Co. in Scarborough, was paid $1,050 by the city to review "some payroll and customer service issues" and report back with recommendations. 

McGough said Agger's name came up during a brain-storming session with Anderson. McGough said he knew Anderson and Agger were related, but he hired her anyway because he found her to be "bright and articulate and she had real expertise on how to manage a busy office."  

Former Human Resources assistant Pamela St. John, who was recently laid off by the city, said she was surprised when Agger show up for an appointment with McGough, who had told his staff he was meeting with "a reporter." When Agger walked in the office, St. John immediately recognized her as Anderson's sister, she said, since their husbands are good friends.

"That was like old home week," St. John said. "I never questioned (the meeting). Then, next thing I know we get a salary-rated adjustment form for consulting services, and I'm like, you've got to be joking. You've got to be joking."

Councilor Jim Soule said Wednesday that he is concerned there may be a pattern of nepotism in the city. Soule said the city should never have hired Anderson's sister to review his department. Soule also questioned why Anderson's sister-in-law, who works as his receptionist in the recreation department, and her son, Oliver Espee, a public works mechanic, have not been reassigned.

"Nepotism is running rampant in South Portland," Soule said. "This is a blatant case of one individual using his ability to hire his family in many different areas and I think it's wrong. I don't think it's healthy for a community."

Soule also said he believes how a person handles their fiduciary responsibilities permeates their personal and professional lives.  

When asked why family relationships in the work place are allowed, McGough provided a copy of the city's personnel policy. Although the policy does not specifically address hiring family members for temporary services, it does speak to permanent employment of immediate family members, including siblings:

"The city discourages the employment of individuals to work in a direct or indirect line of supervision with an employee who is a member of the individual's immediate family."

Randy Billings can be reached at 781-3661 ext. 100 or rbillings@theforecaster.net.