The Herald Bulletin

Morning Update

Local News

October 27, 2013

Rulings find no just cause for city's firing of Townsend

HUD, judge support ex-employee's claim she did nothing wrong

ANDERSON, Ind. — A former City of Anderson employee who has maintained for months she was wrongfully terminated has had her argument affirmed by an administrative law judge and by the U.S. Department of Housing and Urban Development.

Now, Kim Townsend says she intends to seek the unemployment benefits that were stripped from her when she was fired.

Townsend was one of three Community Development employees fired in March 2012 over allegations that they had given preferential treatment to family members in securing HUD housing and had thereby violated conflict-of-interest stipulations.

However, letters from HUD and the Indiana Department of Workforce Development indicate the city's allegations are unsubstantiated, and that Townsend followed proper procedure.

Responding to an interview request from The Herald Bulletin, an official of Mayor Kevin Smith's administration said Smith had not received a copy of Townsend's documents and could not comment. However, on Friday, Smith said he stood by the dismissal. “Absolutely,” he said. “My responsibility is to put together a government people can have faith and confidence in.”

At the time of the firings, city economic development director Greg Winkler told the newspaper that an internal investigation revealed at least five instances where relatives of Community Development employees were housed in HUD homes.

Townsend, whose last name was Rayford at the time, had worked for the city for 18 years and Community Development for 14 years. During former Mayor Kris Ockomon's administration, her brother, Victor Raymore, applied for a special HUD housing program and was accepted by a third-party verification process.

Townsend, whose position didn't deal with housing, didn't learn about the possible conflict of interest until Raymore had moved into the home, she said.

Upon learning of her brother's situation, Townsend said, she immediately informed her supervisor and the former city attorney of the possible conflict of interest. She was told there would be a follow-up.

The follow-up never came, and when Smith's administration took office, Townsend, Debra King and Beth McKenzie were fired from their HUD-related jobs over conflict-of-interest allegations.

According to documents from the inspector general of HUD, any investigation of Townsend has been closed and the office "has not been able to substantiate allegations."

Also, according to case files from the state's Department of Workforce Development Unemployment Insurance Appeals, administrative law judge C.M. Franken of Fort Wayne ruled that Townsend was not discharged for just cause and therefore should be qualified to receive unemployment benefits.

According to the document, the employer has the burden of proof in a discharge, and the city failed to present evidence that Townsend knew she was in a conflict-of-interest situation. "The record did not demonstrate that [Townsend] knowingly violated reasonable and uniformly enforced regulations and rules. [Townsend] was not discharged for proven just cause."

The fallout of the termination has been tumultuous for Townsend, who said the accusations have sullied her name. She said she had to push the city, HUD and the appeals process to reach the conclusion.

"Every day has been a struggle. I feel like I've had my life completely taken from me," said Townsend, who now works at the Madison County Community Health Center. "And I want to be compensated for what I've lost."

Towsend's attorney, Montague Oliver, said the firings were politically motivated by an administration that wanted to "clean house." Townsend said she's not done, and she and Oliver are developing legal action against the city aimed at recovering the benefits she lost.

In response to news of the rulings in Townsend's favor, Smith's administration released a Sept. 27, 2013, report from HUD's office of Community Planning and Development. The report reviews Anderson's recent administration of HUD programs.

Though not evaluating the city's firing of the women, the report reads, "HUD commends the City for the progress made toward rebuilding its community development division, after managing the conflicts of interest issues that it identified and addressed in 2012."

On Friday, Michael Frischkorn, the city's deputy director for economic development, said, "The city stands behind its original decision – period."

Saturday, Beth McKenzie said she also received a letter from HUD after she requested s similar review of her case. Allegations against her were also unsubstantiated, she said.

"I'm extremely pleased that the opportunity has presented itself for the truth to be divulged," McKenzie said. "The three of us were treated despicably based on a lot of unfounded information."

The Herald Bulletin was unable to contact King.

A fourth former city employee who handled federal housing programs, Amber Lewis-Lilly, had been hired by King as a project contract specialist for the city's Department of Economic Department.

Lewis-Lilly was notified Jan. 18, 2012, that she was being fired. She had been responsible for maintaining the city's compliance with federal housing programs and grants.

In April 2012, Lewis-Lilly joined nine other former employees — excluding the three in the HUD incident — in a federal lawsuit claiming they were fired by Smith's Republican administration because of their affiliation with the Democratic Party. The case is ongoing in Indianapolis, with the City of Anderson recently asking for extra time in addressing the lawsuit.

In her initial complaint, Lewis-Lilly said she was a member of the Democratic Party who had campaigned for Kris Ockomon in 2007 when he defeated Smith, the incumbent, for mayor. Smith came back to run for mayor in 2011 and unseated Ockomon. Smith's current term began Jan. 1, 2012.

Like Jack Molitor on Facebook and follow him @aggiejack4 on Twitter, or call 640-4883.

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