Carmel won’t report clerk-treasurer for alleged ethical violations

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The City of Carmel has announced it will not report Clerk-Treasurer Christine Pauley to state auditors for alleged ethical violations.

It was previously suggested that Pauley could be reported to the Indiana State Board of Accounts for attempting to file a claim that some Carmel city councilors say was inappropriate and against the city code.

In October, Pauley tried to submit an invoice for $5,000 for legal fees to the city council from the Indianapolis-based law firm Betz and Blevins. Pauley had hired the firm to represent her when she had disagreements with the council about her proposed pay raise.

City Council President Ron Carter said this legal representation was personal in nature so the city shouldn’t pay for it, especially since Pauley threatened legal action against the city because of gender-discrimination claims. The council voted Oct. 17 to remove the item from the city’s claims, and then Carter asked City Attorney Doug Haney to look into whether Pauley needed to be reported for ethical violations.

Assistant City Attorney Jon Oberlander said no reporting would be necessary since City Councilor Sue Finkam caught the item before it was approved and appropriated.

“We don’t believe the city should report since the claim was never made,” he announced at the Nov. 7 city council meeting.

The $5,000 in legal fees stem from when Pauley submitted a letter to the council in early October questioning why she only received a 2 percent pay raise in the city’s proposed salary ordinance for elected officials. She pointed out that Carmel Mayor Jim Brainard was originally suggested to receive a 40 percent pay raise and the city judge and city councilors were also set to receive raises of 20 percent or more. In the end, the council gave 2 percent raises to the mayor, clerk-treasurer and city judge and gave a 15 percent raise to themselves.

The city council also voted to cut approximately $200,000 from Pauley’s requested office budget for 2017, including $105,000 for legal fees and consulting fees and $97,000 in wages and benefits for an additional employee.

Pauley said she’s not going to accept the council’s actions. She said she doesn’t have plans to pay the $5,000 legal bill out of her own pocket. She said she may go through the Board of Public Works or consider other options.

“I’m shooting back at this city council,” she said. “They must approve it.”

Carter said there’s no way the city will pay the legal bill.

“The city’s ordinance is very clear,” he said. “She will not get that paid by the city. She’s very lucky that Sue Finkam caught it, because otherwise it could have been sent before the Hamilton County Prosecutor. She can keep fighting, but it’s going to be vain.”

Pauley said the city has to pay the legal bill, because it’s in regards to a human resources matter and her role as clerk-treasurer.

“I have the right to have legal representation,” she said. “The denial of me to have legal fees is in violation of the Indiana law. This is not personal. If I plan my own personal lawsuit that will be handled on my own accord.”

Carter said he’s disappointed by talk of a possible “personal lawsuit.” Pauley declined to elaborate on what that suit might be or whether she would actually file a suit.

“She has no grounds for any lawsuit against the city or the city council,” Carter said. “She needs to just focus and do her job.”

In addition, Carter and Pauley have disagreed through a thread of city emails, which are public record, about Pauley submitting a budget to the state that was different than the one that the council approved Oct. 17. The amended budget reduced the funds appropriated to the Clerk-Treasurer’s Office, but Pauley submitted a budget with her original proposal in tact.

“This is what we passed, not your original budget,” Carter wrote in a Nov. 2 email. “That budget was not before us. You have one last chance to post the correct 2017 Budget figures as outlined in the email I sent you today. That is what we passed. If you do not do that, in talking with other members of council, we have decided we will drop this until January. At the first meeting in January we will de-appropriate the extra amount you have wrongfully placed in the budget. In addition, you run the distinct risk of, while we are at it, of further cuts in the budget of your office, especially in the area of staffing.”

Pauley said she interprets that as a threat to cut her budget if she doesn’t fall in line. She said it’s illegal for the city council to reduce the clerk-treasurer’s legal budget to zero. She cites Indiana Code 36-4-10-5.5, which states, “Appropriations for the salaries of attorneys and legal research assistants employed under this section shall be approved in the annual budget and must be allocated to the clerk-treasurer for the payment of Attorney’s and legal assistant’s salaries.” Pauley emphasized the words “shall” and “must” to mean that she has to have some money for legal fees.

Pauley said she plans to request more money in January.

“Since the president of the city council, Ron Carter, threatened my office with further unsubstantiated retaliatory cuts to my 2017 budget if I did not post the Gateway budget as he prescribed even … I will be presenting the city council with an Legal Fees appropriation at the first 2017 City Council Meeting,” Pauley wrote in a city email to the city attorney Nov. 8, which is public record. “Therefore, I am requesting your office prepare the appropriation ordinance for an increase to the CT legal fees account fund to $25,000.”

Pauley said she was not trying to increase her budget with the first one she submitted. She said there was some confusion about what the council actually passed, whether it was the original or amended version. In addition, she said there were errors in the budget that needed to be corrected before it was submitted.

She said the matter has been fixed. She noted she had already agreed to reduce her budget before the council made its cuts, but she believes some people were not aware of her agreed-upon cuts. She said there was a slight delay in submitting the corrections because she was out of town to attend her daughter’s wedding.

Pauley said she understands some reductions, but slashing her legal budget to zero is unacceptable in her mind.

“I shouldn’t have to run to the council every time I need money to do my job,” she said. “It’s just childish. I feel like I’m dealing with middle schoolers sometimes. Not all of the councilors, of course.”

Brainard said he had no comment on the budget submission other than, “The matter has been resolved.”

Brainard did say Pauley has a right to legal representation, but he doesn’t feel she’s being denied that right.

“The city attorney can help her office,” he said. “If outside counsel is necessary for issues involving city matters, then we can help recommend an attorney and pay for that.”

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