Three ex-state employees who claim former Treasurer Dan Rutherford fired them 10 months ago in retaliation for providing damaging evidence in a sexual harassment investigation are threatening legal action unless the state gives them back pay and scrubs personnel records of the misconduct charges used to show them the door, according to documents obtained by The Associated Press.
Current Treasurer Michael Frerichs refused the demands of Patrick Carlson, George Daglas and Ashvin Lad, whom Rutherford's office dismissed July 2 for misconduct.
Frerichs' reasoning was outlined in response to a settlement offer made by the ex-employees' attorney, James Vanzant, in correspondence between the two this spring and disclosed to the AP under a Freedom of Information Act request. But Frerichs indicated his willingness to settle the matter "fairly and expeditiously" by offering not to disclose to potential employees that the three were fired.
The exchanges represent the latest twist in a saga sprung from sexual harassment claims that dismantled Rutherford's political career amid a campaign for governor.
Edmund Michalowski, another ex-Rutherford aide, claimed in a federal lawsuit just weeks before the 2014 GOP primary election that he was subject to repeated, unwanted sexual advances by the Republican and forced to do political work on state time. A federal judge ruled in March that the case may proceed.
Vanzant counters in the correspondence that his clients — Carlson, Daglas and Lad — provided internal investigators hired by Rutherford with corroborating information. He says despite the claim that they were fired for timekeeping abuses, others working for Rutherford committed more serious offenses but were not disciplined as harshly.
"They were wrongfully terminated from the treasurer's office because they were witnesses in the investigations," Vanzant said, in a statement to the AP, adding his "hope of resolving this matter privately," but resolve to sue, if necessary, "to clear their names."
Vanzant, whose Hinsdale law firm also represents Michalowski, told Frerichs in the documents that a court defeat could cost the state "double back pay, interest and attorney fees" along with damage payments.
Rutherford fired Carlson, Daglas and Lad after an investigation by the treasurer's inspector general, David Wells, uncovered timekeeping abuses. The probe was launched when an employee received a cellphone photo of Lad at Wrigley Field with the message, "I'm playing hooky."
Wells concluded the three exchanged computer passwords to file fraudulent reports and cover unexcused absences. Carlson, 38, made $99,000. The 40-year-old Lad made $80,000 and Daglas, 31, made $71,500.
Vanzant countered the three are whistleblowers who got the boot in reprisal for speaking with investigators. In one letter to Frerichs, Vanzant claims that shortly after the three were fired, Kyle Ham, then-chief of staff to Rutherford, told a witness, "Do you think they'll shut up now?"
Ham, whom Vanzant claimed also told a witness the three were trying to "bring down" Rutherford, did not return a call seeking comment.
Frerichs rejected Vanzant's proposal May 8, documents show. General counsel Keith Horton said Frerichs could not meet Vanzant's demands for six months' back pay and record-scouring because the three were fired for misconduct and state law prohibits destroying records related to Wells' report.
Horton offered to accept statements indicating each ex-worker's disagreement with the findings and a promise that the office would not disclose to inquiring employers that they were fired.
Frerichs' office declined to comment further to the AP.
Rutherford's lawyer, Dan Fahner, issued a statement emphasizing that a separate employee complaint spurred the investigation, uncovering conduct Wells thought warranted firing, which Rutherford did "based on those recommendations."
Vanzant said a treasurer's audit covering 2010-12 showed "widespread issues with timekeeping." He asserted other infractions did not meet with discipline: One treasurer's employee billed the office for two days of non-work travel and, when exposed, reimbursed the office but faced no discipline. He said another sexually harassed a co-worker but was allowed to resign and given a month's severance pay.