Carmel's Use Of Private Eyes Not New

Fox 59 News' Anne Yeager had a follow up story this evening to her bombshell story Friday reporting on the City of Carmel's use of a private investigation firm to investigate private citizens for potential violations of law. On Friday, Yeager's report disclosed the expenditure of at least $13,000 for investigative work conducted by Indianapolis' International Investigators, Inc. since last year. According to Yeager's sources, a target of a recent investigation was Steven Libman, the former CEO of The Center for the Performing Arts, a nonprofit foundation that operates the Palladium. Libman abruptly resigned recently for undisclosed personal reasons after signing a 5-year contract with the foundation.

Tonight, Yeager reports that Carmel first authorized a contract to use private investigators as far back as 2001. There seems to be some question over whether the original contract could be continually renewed after all of these years without further approval by the council under an ordinance adopted by the council limiting the time period for contract renewals. Carmel's city attorney, Doug Haney, was responsible for authorizing the work performed by the private investigators. Haney also serves on the nonprofit's board of directors, which signed off on Libman's employment contract. Haney would seem to be performing conflicting roles working for the City, which provides funding to the foundation board, and serving on the nonprofit's board. According to news reports, other board members appeared to be in the dark as to the reason Libman abruptly resigned. It now appears that information of a personal nature learned from the investigation led to Libman's abrupt resignation.

Yeager's report tonight indicated that the City was concerned Libman's leadership of the Performing Arts Center posed a liability because of alleged sexual harassment and sexual intimidation, but Libman's actions as an employee of the nonprofit foundation posed no direct liability to the City of Carmel. There seems to be an undercurrent suggesting that Carmel Mayor James Brainard may have wanted Libman ousted because he could not control him. If the nonprofit board had been apprised of the concern, it could have easily engaged legal counsel to investigate the allegations and recommend appropriate action for the board to take if it didn't feel a committee of the board or a member of the nonprofit's staff could have adequately conducted an investigation. Instead, it looks like the City chose to go behind the board's back to take care of the problem its own way, which was to hire a private investigator and then confront Libman with its findings. Yeager said she questioned the City of Indianapolis about the use of private investigators and was told the City does not employ their services.

Fox 59 News' website doesn't have tonight's story online yet. I'll add a link to it if it appears.

And here's the link. Here's her passage concerning Brainard's explanation:

According to emails obtained by Fox59, Carmel Mayor James Brainard said individuals "came to us that the city funds were being misused. It was of great concern that foundation funds were at risk, as well as sexual harassment and sexual intimidation. The police chief was informed, but not requested to investigate."

So why then call in private investigators to track Libman?

"The city attorney conducted his own investigation because he needed to prove or disprove these serious concerns that put the city at risk."

UPDATE: WRTV's Joanna Massee weighs in on this developing story tonight. She reports that the Carmel City Council plans to withhold any additional funding to the Center for Performing Arts until the foundation is audited and further explanation is provided about the expenditures made to International Investigators, Inc. Massee got statements from both Haney and Mayor Brainard defending the expenditures:

Carmel City Attorney Douglas Haney, whose name appears on the invoices, said in a statement to 6News that he is obligated to "investigate allegations of the improper use of city funds or of misconduct that could harm the city's interests."

"Recently, I became privy to such allegations in a matter that involved improper and imprudent, but not necessarily criminal, conduct that, if true, would likely have a negative impact on the City's and the public's interests," the statement read.

Mayor James Brainard released a statement to 6News that said, "The city of Carmel is obligated to protect taxpayers by investigating incidents that have resulted or may result in legal claims against the city and its taxpayers."

Massee also got a blanket statement from the State Board of Accounts saying it was perfectly okay for local governments to hire private investigators:

Officials with the State Board of Accounts said governments are allowed to hire private investigators for city business.

I'm rather bothered by that blanket statement. The State Board of Accounts is not in any position to make a legal determination as to whether a municipality can hire private investigators to investigate private persons for illegal conduct, or to investigate public employeees for that matter. Police, not private investigators, investigate violations of criminal laws. Additionally, Libman was not a city employee; he worked for a nonprofit foundation that happens to receive funding from the City of Carmel. Certainly, Carmel could ask for an independent audit to ensure that funds were being spent appropriately, but it is not the role of the City to investigate the personal sex lives of the foundation's employees. That role belongs to the foundation to ensure sexual harassment or other forms of discrimination or employee misconduct are not occurring in the workplace. Apparently, the State Board of Accounts does not have legal authority to audit the books of the Center for Performing Arts, but there is no indication in this case that funds were misspent; rather, the allegations involve personal misconduct. Even if it did audit its books and uncovered potential criminal wrongdoing, the State Board of Accounts would refer the matter to the appropriate law enforcement agency for further investigation, not suggest the governmental entity go out and hire a private investigator. It might suggest the hiring of a forensic accountant, if appropriate.  And I'm still wondering how Brainard could claim the City would be liable for the actions of a foundation employee since it is a separate, nonprofit corporation that operates independently of the City and that files its own tax returns in accordance with federal and state tax laws.