Attorney: AG looking into OT payments

WEST CHESTER » A statewide grand jury is reportedly investigating the overtime payments made to a former deputy in the Chester County Sheriff’s Office that is the heart of a move by the county’s fiscal watchdog to recover more than $67,000 paid to the deputy over a three-year period, an attorney with the county Controller’s Office said Wednesday.

The 45th Investigative Grand Jury, under the supervision of the state Attorney General’s Office, has issued subpoenas to the Controller’s Office for bank account and deposit information for former Chester County Sheriff Carolyn “Bunny” Welsh, as well as employee records from the Sheriff’s Office, according to the controller’s solicitor, Anthony Verwey.

His disclosure came unexpectedly during a separate proceeding involving the contest between Controller Margaret Reif and Welsh, the popular five-time elected sheriff, over whether the overtime payments approved under her command were proper. Reif, the county’s first Democratic controller, contends that the payments should not have been made and that Welsh must personally repay the money to the county’s taxpayers.

“Are you saying there is an investigation by a grand jury?” into the issue of overtime pay

ments collected by former Lt. Harry McKinney, asked a visibly surprised Senior Judge Joseph Madenspacher of Lancaster County, who is hearing the overtire payment dispute.

“Based on the subpoenas, I believe there is,” answered Verwey, an attorney with the firm of Gawthrop Greenwood of West Chester. “It does seem they are looking at the same facts as in this matter.”

Attorney William Gallagher, representing Welsh in the dispute with the controller, questioned whether Verwey’s assertions about the grand jury were true. “I haven’t seen any subpoenas,” he told Madenspacher during the proceeding in the Chester County Justice Center.

“You wouldn’t see them, because they’re secret,” Madenspacher responded. “If what’s he’s saying is true, nobody would know.”

Later, Gallagher criticized Verwey’s discussion about the possibility of a grand jury investigation into Welsh’s actions regarding the overtime payments she approved for McKinney, her longtime live-in boyfriend.

“I think it was out of line to make any mention about a grand jury,” said Gallagher, with the West Chester law firm of MacElree Harvey, in an interview. But he added that he knew nothing about the possible existence of a grand jury investigation into the Sheriff’s Office, or whether any subpoenas had been issued to Welsh or about her affairs. “She has not been subpoenaed, to the best of my knowledge.”

In response, Verwey said he made the on behalf of Reif, his client, who is permitted by law to discuss grand jury proceedings she has been involved with.

“I advised the Attorney General’s Office of my client’s intent to make this disclosure,” he said in an e-mail. “I did so on two occasions, the second nearly a month ago to allow time for the (Attorney General) to obtain a court order if they thought it was necessary. No order was sought or issued. Which is a long way of saying that we prepared and did it by the book.”

Criminal defense attorney Robert J. Donatoni of West Chester, who represents McKinney and who attended the hearing Wednesday, declined to comment on Verwey’s assertions. Likewise, a spokeswoman for the Attorney General’s Office, Jackie Rhoads, declined to comment on the statewide grand jury’s proceedings, which are confidential.

News of the grand jury investigation came towards the end of the proceeding, and largely overshadowed the dispute over whether or not to dismiss Welsh’s appeal of a “surcharge” issued by the Controller’s Office to reclaim $67,335.25 in overtime paid to McKinney in 2016, 2017, and 2018. He claimed the overtime, an average of 10 hours a week, in order to care for the three K-9s in his care.

Reif contends that Welsh failed to meet the legal requirements of an appeal of a surcharge because she did not post a financial guarantee — called a “surety” — along with a $1,000 bond. The surety is meant to provide for the payment of costs, including attorney fees, should an appeal fail, her motion to dismiss contends.

Verwey, in his presentation, said the statute governing the surcharge process was clear: any officeholder appealing such a measure must post a bond along with the surety. “Given that the clear language of requirements that were not met, this appeal must be dismissed,” he said.

But Gallagher, citing other case law, argued that the bond was meant to cover the surety and that attorneys fees are not included in what can be recovered in such an action. And even then, he said only county auditors were entitled to claim any costs under the $1,000 bond, not the controller.

Gallagher also slammed Reif for waiting to bring the matter of the surety to the court’s attention until last month, after she had filed the surcharge last summer. “We have wasted a lot of time in the matter because the controller waited to file this,” he said. “I don’t understand why they waited.”

Verwey had explained to Madenspacher, who asked the same question concerning the timing of the dismissal motion, that there had been extra time devoted to researching the issues of surcharge actions that delayed the dismissal motion from being filed. This type of action is rare, and the procedures for filing are largely untested, he said.

Discussion of the grand jury came when Madenspacher asked the pair of attorneys what new trial date should be considered should he rule against Reif’s motion to dismiss the appeal. A tentative trial had been set for April 6.

While Gallagher suggested that the case could be presented to a jury sometime before June, Verwey said it should be put off for six months, until September, to give the grand jury a chance to complete its work.

“We don’t want to get in the way of the Attorney General’s work, and we also don’t want the Attorney General to impede in our efforts,” Verwey said. Should the case go forward before the grand jury finishes, Welsh and McKinney might choose not to testify if called in the surcharge dispute, citing their Fifth Amendment rights against self-incrimination in criminal proceedings.

“We don’t want them to get called as witnesses and take the Fifth and not testify,” he said.

Welsh, although she appeared at the hearing, did not testify on Wednesday, the proceeding being mostly legal argument. It was the first time since her departure from county government that she had visited the county Justice Center, whose security she was responsible for as sheriff for the first 12 years of its existence.

Dressed in a modest pantsuit instead of the formal black-and-gold sheriff’s uniform she wore during ceremonial events and at her meetings with President Donald Trump in the White House, Welsh chatted amiably with Donatoni, her friend and former chief deputy John Freas, and Gallagher. “Did you watch the (Democratic) debate last night?” he asked her attorney during one exchange. “Pathetic.”

Should Reif be successful at getting the appeal of her surcharge action set aside, it would mean that Welsh would be liable to repay the county $67,335.25 for overtime payments that McKinney claimed for care of the dogs he owned when he was the supervisor of the county Sheriff’s Office’s K-9 Unit. Should her dismissal attempt fail, the action will proceed towards a scheduled trial date in April.

In the surcharge action, the Controller’s Office has contended that not only were the overtime requests made by McKinney and approved by Welsh in violation of the county policy concerning K-9 care and grooming but that they were excessive. The requests were normally for about 10 hours per week, but sometimes as high as 23 hours for one day.

Welsh has denied any wrongdoing and had countered that McKinney and the other K-9 handlers in the Sheriff’s Office, were eligible for overtime payments for care of their dogs under federal labor law.

Madenspacher was called to hear the matter after the county’s Common Pleas judges were recused because of their possible conflicts over the Sheriff’s Office courthouse security duties.

To contact staff writer Michael P. Rellahan call 610-696-1544.

Former Chester County Sheriff Carolyn “Bunny” Welsh