The Herald Bulletin

November 25, 2013

Lanane: Townsend cleared in 2011 investigation

Information not shared with Smith administration

By Ken de la Bastide
The Herald Bulletin

---- — ANDERSON — Members of Mayor Kevin Smith's administration said they were unaware of a 2011 investigation into allegations of conflict of interest in the Community Development Department.

A letter dated Feb. 9, 2011, from then-Mayor Kris Ockomon to Steve Priser, director of personnel and insurance, indicates an internal investigation was conducted into relatives of staff members Kim Townsend, Debra King and Beth McKenzie being placed in homes constructed under the Neighborhood Stabilization Program.

Townsend, King and McKenzie were terminated by the Smith administration in 2012 over the conflict of interest allegations, an action that the U.S. Department of Housing and Urban Development said brought the city back into compliance with the federal guidelines.

Townsend is seeking to be reinstated to her job with the city and to receive her benefits from her years of employment.

Priser said Monday that there was an investigation involving several meetings but he didn’t recall an actual vote being taken by the internal investigation team.

“We found nothing that required a further investigation,” he said. “I was more concerned until it was learned an outside third party, PathStone, did the actual award of housing.”

Priser said he anticipated some “bad press” during the 2011 mayoral campaign in which Smith defeated Ockomon. He said there might have been the appearance that some people were being favored.

He said the available housing was advertised and the response from potential applicants was terrible.

Former City Attorney Tim Lanane said he looked at the state statute concerning conflict of interest and didn’t believe there was a violation.

“I felt that since PathStone handled the application process, I found it all right,” he said. “It didn’t fall into the parameters of conflict of interest under the state statute because a direct family member was not involved. It involved a non-dependent family member.”

Townsend’s brother received one of the placements.

Wayne Huffman, director of personnel and insurance for the Smith administration, said he has been unable to find the paperwork from the 2011 investigation or any written recommendation.

Greg Winkler, economic development director, said the investigation by the Ockomon administration was not discovered until the tail end of their 2012 investigation.

“We were not told by the previous administration about an investigation and findings,” he said. “We did check to see if there was a waiver or agreement with HUD.”

Montague Oliver, Townsend’s attorney, said the conflict of interest allegations were brought back up by the Smith administration in 2012.

He said an independent third party reviewed some PathStone files and found there may be a conflict.

Oliver said Floyd Edwards, director of human relations for both the Ockomon and Smith administrations, was aware of the 2011 investigation that cleared Townsend of any conflict of interest.

“Floyd Edwards was involved in a 2011 meeting," Oliver said. “He was told there was a finding of no conflict.”

Oliver said Edwards did an investigation for the Smith administration.

“Basically the Smith administration wanted to clean house in the Community Development Department," he said.

Townsend was directed by her two immediate supervisors in 2011, Linda Dawson and King, not to sign anything, the attorney said.

“The individuals that knew about this didn’t step forward,” Oliver said of the Ockomon administration investigation.

Edwards denied sitting in on any meeting in 2011 involving Townsend.

“I found out about that investigation during a meeting with Kim Townsend in 2012,” he said. “I was not involved in the initial investigation. I was looking for facts.”

Edwards said he never saw any paperwork from the 2011 investigation and had no information pertaining to it.

“I presented my findings to the mayor,” he said of the 2012 investigation.

John Dorgan, director of the HUD office in Indianapolis, said he was not aware of any prior investigation before being contacted by the Smith administration in 2012.

“We don’t require them to notify us of an investigation,” he said of the 2011 probe. “We do some monitoring, but the grantee is responsible for administration and management.”


Follow Ken de la Bastide @KendelaBastide on Twitter, or call 640-4863.