SalemNews.com, Salem, MA

June 21, 2013

Hearing focuses on use of funds

City attorney to O'Leary: Was check for son's tuition?

BY TOM DALTON
STAFF WRITER

---- — SALEM — A city attorney presented evidence yesterday at a Civil Service hearing suggesting that a fired Salem firefighter used union funds for his personal benefit.

Attorney Dan Kulak produced a $250 check from a union savings account that Lt. John O’Leary, the former union president, wrote to the Salem Early Childhood Center, a preschool program at Bentley School that his son attended.

Although the city fired O’Leary in August for allegedly misappropriating funds for his own benefit, this is the first time city officials have introduced evidence suggesting a direct connection between the union account and O’Leary’s personal spending. It came on the final day of a state hearing that opened in January and stretched over six months with several delays and continuations.

O’Leary confirmed that his son’s name was in a corner of the 2006 union check and even recalled handing it to a teacher. However, he vehemently denied any wrongdoing.

Kulak asked if the check was for his son’s tuition. “Is that correct?” the city lawyer asked near the start of a four-hour session in the conference room of a Salem law office in Shetland Park.

“No, it’s not correct,” O’Leary replied. “That’s a donation to the school to help out. They were doing some kind of fundraising, if I recall.”

O’Leary, 45, a 16-year veteran of the fire department and former union president, was fired last August for the alleged misappropriation of more than $25,000 from a union account at the Greater Salem Employee Federal Credit Union.

Based in part on the findings of an accountant hired by the Salem Firefighters Union, a city hearing officer concluded that O’Leary cashed union checks or made cash withdrawals from the account between 2002 and 2010 that either could not be verified or that youth groups, sports teams or businesses said they never received.

O’Leary said all the donations went to charities or causes the union supported, including local politicians, and insisted that he kept “hundreds and hundreds” of receipts that other union members either lost or misplaced.

O’Leary appealed his firing to the Massachusetts Civil Service Commission, which concluded its hearing yesterday. A decision is expected by late summer.

The introduction of the check to the Salem Early Childhood Center sparked a protest from O’Leary’s attorney, Joseph Dever of Marblehead. The check, he said, was not part of the evidence at O’Leary’s city hearing last summer and should not be considered by the commission.

“They’re trying to backfill what they can’t prove, and it’s not appropriate,” Dever said.

Kulak countered that Dever should know about the check because it had been introduced recently at another hearing before a state board.

While being asked about the check to the school program, O’Leary noted that many Salem firefighters had children at the Early Childhood Center over the years.

Kulak asked O’Leary if the $250 check was the amount of the monthly fee. O’Leary said he didn’t think that was the correct figure, which he recalled being $200.

In his own defense, O’Leary introduced evidence that appeared to refute part of the city’s case against him, including an itinerary and other information related to a 2005 trip to the Fallen Firefighters Memorial in Colorado, where several Salem firefighters and their wives accompanied the widow and family of late fire Capt. William Hudson.

O’Leary, who said he had withdrawn $1,000 in cash from the union account for the trip, said the money was used for limousine transportation to and from the airport, souvenirs and for the Hudson family. He even introduced a receipt for $216 that he obtained recently from Michael’s Limousine in Peabody, which took the Salem group to and from the airport.

In her report last August, city hearing officer Beth Rennard cited more than $1,500 in withdrawals O’Leary made to the “William Hudson Fund” that neither the credit union nor Hudson’s widow could verify.

In addition, O’Leary turned in a receipt and note from the general manager of the Danversport Yacht Club — another piece of evidence he obtained only recently — for a cash payment O’Leary said he made for drink tickets used by firefighters and other guests at a comedy fundraiser for the union.

In earlier testimony, O’Leary said he made thousands of dollars in donations and bill payments in cash over the years from the fundraising account, for which he kept “hundreds and hundreds” of receipts that the union says it cannot find.

Several firefighters testified that they never saw a file stuffed with receipts that O’Leary says he kept in a file cabinet in the union office at Fire Department headquarters on Derby Street.

Christopher Bowman, the Civil Service chairman and hearing officer, repeatedly asked witnesses about the receipts and the union files in an apparent attempt to pin down the veracity of O’Leary’s statements.

Kulak questioned O’Leary about his statement at an earlier hearing that a withdrawal listed as a donation to the Stephen O’Grady Fund, a local charity, was actually a cash reimbursement he made to a firefighter for his entry fee to the charity’s annual golf tournament. In earlier testimony, O’Leary had identified the firefighter as Jack Rubin, who died in 2011.

Kulak submitted an affidavit obtained just recently from an official at the O’Grady charity who said she went through photos they took of all the foursomes in the tournament that year and could not find Rubin.

Dever asked questions yesterday of several firefighters called to testify about the alleged “bad blood” between O’Leary and firefighter Richard Thomas, who replaced him as union president in 2010 and was one of the officers who raised red flags about the union fund after O’Leary stopped managing it.

Some of the so-called bad blood allegedly stemmed from a contract negotiation in which officers, like O’Leary, received a stipend and firefighters, like Thomas, did not. It was right after that controversial contract negotiation that Thomas and other new officers swept O’Leary out of office.

O’Leary said he had several angry exchanges with Thomas during that transition period, including one that O’Leary quoted. “He said I (expletive) the union like I did before,” he said.

That bad blood is what motivated the new union officers to pursue charges against O’Leary, Dever suggested.

O’Leary said he also had a contentious relationship with Mayor Kim Driscoll, whose administration held the termination hearing. The former union president said that he had heated disputes with Driscoll in contract negotiations and at meetings of the Salem Retirement Board, where O’Leary and the mayor both served.

O’Leary said he stood up for firefighters and constantly challenged Driscoll, whose management style he described as “her way or the highway.”

Tom Dalton can be reached at tdalton@salemnews.com.