State auditor finds evidence of illegal activities in Colorado’s Judicial Branch, refers four ex-employees for criminal investigation

81

By Shelly Bradbury | The Denver Post

An investigation by the state auditor into the Colorado Judicial Branch found evidence of occupational fraud, apparently illegal transactions and the misuse of public funds, according to an executive summary made public Monday.

The Office of the State Auditor, or OSA, will report four former employees of the State Court Administrator’s Office to law enforcement for additional criminal investigation.

The auditor’s office reported finding evidence that former Chief of Staff Mindy Masias and former human resources director Eric Brown collected speaking and consulting fees while on state time, gave an unusually large separation settlement to an employee with access to damaging information against them, and attempted to ensure Masias would be granted a $2.75 million contract as she left her job.

Conduct by Masias, Brown, former State Court Administrator Chris Ryan and an unnamed employee all warrant reports to law enforcement for further investigation, the summary says.

Ryan did not immediately return a request for comment Monday and Masias and Brown could not be reached. A spokesman for the state Judicial Department declined to comment on the summary of the audit’s findings.

The Denver Post last year reported allegations by Ryan that Masias was given the $2.75 million contract to keep her from speaking out about judicial misconduct after she left her job in March 2019.

The state auditor’s office did not find direct evidence of such a quid pro quo arrangement, but did find evidence that Masias sought out the contract before she resigned and that Brown and Masias attempted to influence the contracting process to ensure Masias was awarded the contract, the executive summary says.

“The OSA found some evidence that Ms. Masias requested the promise of a contract before resigning,” the summary reads. “However, the OSA did not obtain evidence that Ms. Masias was promised a contract for such services prior to her signing a resignation agreement.”

The summary goes on to outline a series of problems with the way the contract was awarded to Masias. Evidence suggests Brown included specific experience requirements in the contract that were designed to ensure only Masias would qualify, the summary says.

Twenty-four prospective bidders viewed the contract, which was to provide leadership training over a five-year span for a maximum of $550,000 per year. None applied for the contract, however, and it was then awarded to Masias, 20 days after her resignation.

The auditor’s investigation also looked at an unusually large settlement agreement given to an employee who was under investigation in 2018 for the “inappropriate use of information” obtained through their position, the summary says.

The unnamed employee had access to information that could have been used against Masias and Brown, the auditor’s office found, and was given 15 months of paid administrative leave and severance that was worth a combined $143,000.

That was the highest settlement agreement paid by the Judicial Branch in the 17 years prior, the summary says. The settlement was handled by Masias and Brown, and was approved by Ryan, who was a personal friend of the employee. All three ignored the advice of a staff attorney who said that a lower settlement was appropriate.

“Mr. Brown and Ms. Masias handled certain aspects of (the employee’s) disciplinary investigation and settlement themselves and without always involving legal counsel, even though they had actual or potential conflicts of interest since they were targets of (the employee’s) alleged misconduct,” the report states.

The auditor’s investigation also discovered that both Masias and Brown did work for the National Center for State Courts while on the clock with the state in 2018 and 2019. Masias earned $17,200 and Brown earned $26,800 in their state salaries for hours when they were doing outside work, according to the summary.

The state auditor’s office is required to report evidence of illegal transactions and the misuse or embezzlement of public funds or property to law enforcement. The summary does not name a specific agency that will receive the criminal referrals, and Greg Fugate, a spokesman for the Office of the State Auditor, declined Monday to say which law enforcement agency will be involved, citing confidentiality rules.

The auditor’s investigation began in May 2019 after the agency received an anonymous tip; investigators reviewed 16,000 documents and interviewed 11 current and former Judicial Department employees as they investigated.

The state auditor’s investigation did not find any evidence of fraud around the use of family medical leave, and did not find evidence to support allegations that former Financial Services Director David Kribs’ departure from the State Court Administrator’s Office was problematic or linked to Masias’s departure.

In a letter to Judicial Department employees Monday, Colorado Supreme Court Justice Brian Boatright emphasized that no current employees would be referred to law enforcement and that the referrals do not mean laws were broken or that criminal charges will be filed.

“The OSA’s investigation and report are helpful in continuing to improve the Department’s policies regarding leave and contracting, and the Department has, since 2019, implemented several changes to the personnel and fiscal rules to improve operations. We continue to look for ways to improve further,” he wrote.

Boatright has in the past pledged to make public the results of investigations into the $2.75 million contract and alleged judicial misconduct, but is not expected to release the full audit report, which is confidential under state law.

“We are working to provide the full Investigation Report to the investigators for other pending investigations,” Boatright wrote in the letter to employees, adding he could not comment further because of those ongoing investigations.

The auditor’s investigation is one of at least six launched into the circumstances around the Masias contract. The FBI, Attorney Regulation Counsel, Colorado Commission on Judicial Discipline and two independent law firms are all carrying out their own investigations.

The auditor’s report notes that the Judicial Branch was concerned about protecting attorney-client privilege during the auditor’s investigation, and so were “granted multiple opportunities to review the report and executive summary and redact information they identified as privileged, attorney work product or subject to other legal protections.”