After four years of lawsuits and a criminal investigation, the book has finally closed on the Smithfield pay-raise scandal.
Johnston County District Attorney Susan Doyle announced May 15 that her office will not pursue criminal charges against town employees who received or granted large pay hikes in 2011. The Smithfield Town Council faced a tight budget that year and forbade any pay increases, but 31 employees got salary boosts anyway.
“This is the end, as far as any criminal investigation,” Doyle said. “It’s very disappointing that they would behave in such a way, but it’s not something that we can charge criminally.”
The raises and other irregularities, including suspicious time sheets and questionable vacation and comp-time payouts, cost the town more than $200,000. Factoring in legal fees and a settlement payment, the total bill exceeds $300,000, Councilman Emery Ashley said.
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“The sad thing is all this has not only cost the taxpayers of this town, it’s really hurt the other employees who get up and go to work every day and do the right thing,” he said.
Ashley thought some of the suspicious time sheets might result in criminal charges, but he said he doubted the district attorney would find anything to prosecute regarding the pay raises.
“It just appeared to be sloppy, bad management,” said Ashley, who is an attorney by trade. “There were too many ifs and conflicting stories to where you could reasonably expect a jury to find beyond a reasonable doubt. It really became a he-said, she-said.”
Following his election in the wake of the scandal, Ashley began his own investigation. In the coming weeks, Ashley said, he plans to compile his findings into a final report. That will include an itemized list of what the scandal cost Smithfield taxpayers, he said.
“It won’t be anything big, but we need some final closure,” Ashley said.
Initial investigations centered on the fact that the signature of then-town manager Eric Williams was missing from pay-raise forms submitted to payroll by then-town clerk Debbie Godwin, according to a DA’s office news release. Numerous employees received 1- to 3-percent raises during the time in question, the release states, but Godwin also granted much more generous bumps, including a 30-percent raise for herself.
But the investigation found that Williams often left forms unsigned, particularly during his extended periods of medical leave, according to the release. Godwin held that Williams approved the raises over the phone, and several witnesses from Godwin’s office backed up her story, the release stated.
Williams consistently denied having signed off on the pay hikes. However, he would not have been a reliable witness at trial, the release stated, because he repeatedly contradicted his own statements. For instance, under oath in a related civil deposition, Williams said, “I was so high on meds I do not know what I signed and what I did not sign.”
Another element that prevented the district attorney from pressing charges was the loose policies Smithfield had at the time, according to the release. That made it impossible to prove that Godwin acted without authority or with criminal intent.
“The Town of Smithfield had not set policies, procedures or a checks-and-balances system that would prevent such reckless acts of greed by town employees,” Doyle said in the release.
Doyle thanked the State Bureau of Investigation for its help looking into matter over almost a four-year period. Together, Doyle said, they completed a very thorough investigation before she decided not to press charges.
“We’ve looked at every single act that could potentially be considered a crime and determined that it did not rise to the level of criminal conduct,” Doyle said.
Shortly after the scandal came to light in the spring of 2011, the Town Council fired Williams, Godwin resigned, and Lynn Powell, a payroll clerk, retired. Former finance director Justin Merritt, who also came under investigation, took a similar job in Shelby in 2012.
In addition to the criminal investigation, the scandal produced three civil law suits that stretched into last fall and racked up legal fees for the Town of Smithfield.
Last September, Smithfield paid Williams $30,000 to settle a lawsuit out of court. Williams had sued the town for breech of contract, citing a clause in his contract that entitled him to six month’s pay, or about $60,000, if he were fired without cause.
Williams also sued Godwin for defamation, and Godwin sued Smithfield to cover her legal expenses in that lawsuit. A judge dismissed both cases last November.