Grand jury urges library chief's ouster over alleged billing scheme

A grand jury report recommends the ouster of the Sacramento Public Library director over an alleged overbilling and kickback scheme involving two former employees.

The report released Wednesday also lays out an array of other concerns with library management, including:

• Credit card abuses.

• Questionable travel expenses.

• Excessive use of consultants.

• $2.5 million in uncollected fines.

The Sacramento County grand jury also found a lack of oversight by the 14-member board that governs the fifth-largest library system in the state.

But the report's harshest findings focus on Library Director Anne Marie Gold. The report found that Gold ignored library employees who tried to warn officials of the alleged billing and kickback plot.

Gold and other administrators "failed to adequately safeguard public funds," the report said.

The report said the library's governing board should "seriously consider removing" Gold, and also recommends removing the library's director of human resources, Arevik Bagdassari.

Bagdassari is cited in the document for "repeated abuses" of travel and credit card policies, and her lack of leadership "in establishing and implementing personnel policies."

Gold said she will not quit and that it would be "premature" to respond point by point to the grand jury's findings.

"No, I don't intend to resign at this time," said Gold, who is paid $145,000 annually. "I believe my track record over the past six years regarding the improvements in library services in Sacramento and the leadership I've shown for this library must be considered against the context of the statements, allegations, findings and recommendations of the report."

She disagreed that she and her executive team were not receptive to early alerts about the alleged overbilling. "My actions stand clear," she said.

Bagdassari did not return calls seeking comment.

Robbie Waters, chairman of the library board, said he was not ready to ask Gold to resign, but he acknowledged the gravity of the report's many findings and recommendations.

"I've never seen anything this in-depth and this serious," said Waters, who has served on the board 13 years.

Based on more than 40 interviews and 70 subpoenas, the 31-page report states that the board "failed in its oversight of the Library, the Library Director, and the Library executive team."

The board is made up of county supervisors and City Council members from throughout Sacramento County and has faced criticism from library staffers who believe it has not provided enough oversight.

"It's about time somebody recommended action be taken against the library administration," said Steve Crouch, a business representative for Stationary Engineers Union Local 39, which represents about 250 library staff members.

The report follows months of investigation into the alleged billing and kickback scheme involving two former library employees and the wife of one of them.

The three – former library maintenance director Dennis Nilsson, former library security chief James Mayle and his wife, Janie Rankins-Mayle – were indicted in March on felony grand theft and bribery charges. They have not entered pleas, and the case is pending.

One library administrator told the grand jury that Gold did not think reports of the alleged overbilling scheme were "of substance." The grand jury found that the scandal "would have been a much smaller fiscal incident had members of the Library executive team been more receptive to alerts by a finance clerk."

The case came to light amid a Bee investigation of spending practices that found maintenance bills for work at library branches were being submitted by Hagginwood Services Inc., a firm owned by Rankins-Mayle.

Hagginwood was having subcontractors perform work and then inflating the amounts charged to the library, documents showed. In one case, a subcontractor charged $3,240 for repairing ceiling tiles, and Hagginwood billed the library $10,480, documents show. Invoices were tripled for other jobs, such as painting curbs or repairing toilets.

A subsequent library investigation found that since early 2004, the Rankins-Mayle company had billed the library for $1.3 million in work, with $650,000 of that billed improperly.

Search warrant documents filed in the court case also found that Rankins-Mayle wrote company checks to Nilsson "amounting to tens of thousands of dollars."

The library sued the Mayles and Hagginwood seeking $1.3 million in restitution last October, and on Tuesday, Sacramento Superior Court Judge Shelleyanne W.L. Chang issued a judgment finding the Mayles and the company liable for $4.3 million in restitution and penalties.

"We proved that they were responsible for the damages and the penalties to the satisfaction of the court," said Diane B. Balter, general counsel for the library system.

A series of financial missteps at the library outlined in the grand jury report were not limited to the alleged kickback scheme.

According to the report, Gold took two years and nine months to reimburse the library for $800 in personal expenses she rang up at a 2005 conference. Gold made the payment the day before she was to appear before the grand jury, and "it was determined that this amount was paid primarily because she was concerned" about that appearance.

The library has spent $2.2 million for consultant services since 2003, but the process for hiring consultants "was not uniform," according to the report.

Library rank-and-file signed two petitions, one of which was a vote of no confidence in the director. That lack of confidence spread throughout the system and even included volunteers.

However, steps to address the poor morale were seldom taken, the report states.

About the writer:

• Call The Bee's Ryan Lillis, (916) 321-1085.