Jan. 18--SALEM -- The Salem firefighters union began investigating Lt. John O'Leary, its former president, soon after he was defeated in a 2010 union election, at which time other firefighters took over a charitable fund that O'Leary had overseen for almost a decade.
Their concerns about possible phantom donations led to a phone call to the attorney general's office, a report by a certified public accountant, a city hearing and O'Leary's eventual firing in August.
Based on the CPA's findings, a city hearing officer concluded that "cash disbursements totaling $25,750 appear to be misappropriated for the personal benefit of John O'Leary."
Some of the details behind the investigation and firing came out yesterday when O'Leary's appeal was heard in Boston before the Massachusetts Civil Service Commission.
The hearing was continued to Feb. 11, when it will resume in Salem with O'Leary scheduled to testify. Fire Chief David Cody is another potential witness.
During an all-day session yesterday, O'Leary's attorney said his client "vigorously denies" any wrongdoing and, if anything, is guilty of nothing more than "inadequate record keeping."
Attorney Joseph Dever also said that union politics may have played a role in the investigation. He suggested that there was "bad blood" between O'Leary and Richard Thomas, the firefighter who defeated him for the presidency and now heads the union.
The city called three witnesses to make its case against O'Leary: firefighter Ray Krajeski, the current union vice president; fire Capt. Paul Cranney, who made annual tax filings for the union; and City Solicitor Beth Rennard, the hearing officer who wrote the report recommending O'Leary's firing.
Early in 2011, Krajeski said he and another firefighter, Lt. Wayne Silva, assumed oversight of the charitable fund, which was set up around 2002. When they went to the Greater Salem Employee Federal Credit Union, which handles the fund, they were surprised by what they found, Krajeski said.
A clerk told them that it was not a checking account but a savings account from which withdrawals were made. The firefighter said they grew concerned after checking with organizations listed as recipients of donations.
Krajeski said he contacted the director of the Salem Cartoon Basketball League, a youth sports program, which was listed as receiving a $500 donation, according to the CPA's report.
The league director, according to Krajeski, said the firefighters union "hadn't given him anything over the past couple of years."
At that point, Krajeski said he notified Thomas that "we might have a potential problem."
Thomas then checked on two other donations listed by the union charity -- Salem High School basketball and golf teams -- and was told they had not received donations either, according to Krajeski.
Cranney said he became "disturbed" when he saw copies of credit union checks that appeared unusual. Each was made out to two recipients, a charity and the Salem firefighters union.
"There were a number of those checks," Cranney said, "(and) if you looked on the back of those checks, they were endorsed by John (O'Leary) and cashed by the credit union."
During cross-examination, Dever focused on repeated examples of shoddy or nonexistent record keeping by the union. At one point, he asked Cranney why he never asked O'Leary for copies of checks or other records, for tax-filing purposes, to verify that donations were being made to local charities.
Cranney said he got lists of recipients from O'Leary and trusted that the information was accurate.
"I never asked him," Cranney said. "As a volunteer trying to help the union out, (I was) looking to do it with as little effort as possible."
When it was suggested that O'Leary, in many instances, did not follow the past practice of getting approval of donations from the union executive board and membership, Dever pointed out that the local had no written procedures. Krajeski said they followed the rules of the International Association of Firefighters, their parent organization, and that it had been standard practice to get prior approvals.
A union investigation indicated that, as the years went on, O'Leary was bringing fewer donation requests to the membership.
"For the most part," Cranney said, "(O'Leary) was making donations where he saw fit."
Citing repeated examples, Dever tried to make the case that it was not unusual for the union to make cash contributions to a variety of charitable causes.
Dever also tried to flush out a possible motive for the investigation, questioning Krajeski about hard feelings within the union over a new contract approved during O'Leary's presidency in which officers got raises but firefighters didn't.
"That was a problem?" Dever said.
"For some, it was," Krajeski replied. The firefighter added, however, that he was unhappy with the contract, but not with O'Leary, who he said generally did a good job as president.
O'Leary, Dever said, was ousted soon after that contract.
Dever also raised questions about the CPA hired by the union to investigate the charity's books and O'Leary. The CPA is a friend of Krajeski's, the firefighter confirmed under questioning.
Dever also questioned the propriety of Rennard serving as the hearing officer who recommended O'Leary's firing. Under questioning, she said she took part in the investigation of O'Leary by checking campaign finance records in the city clerk's office to see if she could find evidence of donations that the union made from its charitable fund to former City Councilors Kevin Harvey and Mike Bencal.
That revelation prompted a question by Christopher Bowman, the chairman of the Civil Service Commission who presided over yesterday's hearing.
"Did you have any reservations about being the hearing officer given the fact you had played a role in the investigation?" Bowman asked.
Rennard said she felt she was "very impartial" and, when making inquiries, did not assume O'Leary was guilty of any wrongdoing.
"I was looking to see myself if the auditor was wrong ..." she said.
Tom Dalton can be reached at [email protected].
Copyright 2013 - The Salem News, Beverly, Mass.
