DA, jury probing library scandal

A billing scandal at the Sacramento Public Library is under investigation by the Sacramento District Attorney's Office and the Sacramento County grand jury, The Bee has learned.

In addition, agents from the Internal Revenue Service's criminal division and the FBI are looking into an estimated $650,000 in maintenance overbilling, officials said.

Further, the Contractors State Licensing Board is investigating how a Sacramento firm acting as a primary contractor -- apparently without a license -- hired subcontractors for library jobs.

In an extraordinary meeting with federal and local law enforcement investigators Wednesday, library administrators presented information about maintenance markups that ranged from 67 percent to 324 percent for such tasks as fixing lights, assembling shelves and hauling recyclables. The jobs were at branches throughout the county.

"We met with representatives of law enforcement organizations," said library deputy director Rick Teichert. "Due to the sensitive nature of the discussions in the early stage of the review, we've been asked not to discuss details of the meeting."

The meeting came less than a week after the library board released an investigative report by the San Francisco law firm Renne Sloan Holtzman Sakai.

The library's probe came after The Bee filed a public records act request May 21 to examine invoices of $1.3 million in work billed by Hagginwood Services.

The firm's investigative report revealed that Hagginwood and its predecessor company routinely marked up handyman jobs from February 2004 until this summer, when the library cut the contract.

The library's maintenance chief, Dennis Nilsson, resigned Sept. 14, the report said. Nilsson did not return telephone calls Wednesday.

The report describes how Nilsson and library security supervisor James Mayle discussed starting the maintenance company Hagginwood Services, once called All City Maintenance.

Mayle's wife, Janie Rankins-Mayle, ran both companies, and Mayle was vice president of Hagginwood. On Wednesday, they referred The Bee to their attorney, who didn't return a call.

Hagginwood became the "billing middleman" between the library and contractors already working for the library, the report said.

One contractor completed a ceiling tile replacement and billed Hagginwood $3,240. In turn, Hagginwood destroyed the contractor's invoice -- which noted hours worked -- and sent a bill on its own letterhead to the library, charging $10,480 for the job, the report said.

The report called Rankins-Mayle's practice of scrubbing work hours from contractors' records and shredding them "highly suspicious" and a "deliberate act of concealment."

Mayle, the security supervisor, circumvented library policy and submitted maintenance work orders knowing they would generate business for his wife's company, the report said.

Investigators said Mayle and his wife offered some explanations for apparent improprieties, but many were found to be "evasive," "most likely not true" or "implausible."

This week, district attorney's spokeswoman Lana Wyant confirmed the office has had an ongoing investigation into the case. She declined to comment further.

Contractors State Licensing Board investigators have been looking at Hagginwood for apparently acting as a contractor without a license, spokesman Rick Lopes said.

Lopes said even though Hagginwood didn't purport to do heavy labor, it apparently played the role of a principal company directing subcontractors, which requires a license.

Lopes said if the board finds a business code violation, prosecutors could bring misdemeanor charges that each carry a $1,000 fine or up to six months in jail.

Additionally, the Sacramento County grand jury is poring over library maintenance documents, according to a Sacramento Superior Court subpoena obtained by The Bee.

Library director Anne Marie Gold signed the subpoena on July 20, the document shows.

FBI spokesman John Cauthen confirmed that agents attended Wednesday's meeting. "We're still in the information gathering phase," he said.

About the writer:

• The Bee's Christina Jewett can be reached at (916) 321-1201 or cjewett@sacbee.com.