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Milpitas city hall
Christopher Gardner

Northern Disclosure: The generally quiet and prosperous city of Milpitas has been wracked by an investigation surrounding employee phone abuse amounting to thousands of dollars in personal calls.

Did Milpitas City Manager Larry Moore quash a criminal investigation, or is he the target of a personal vendetta?

By Richard Sine

SOON AFTER A scandal involving personal use of cell phones by Milpitas city employees hit the news, Milpitas Finance Director Larry Sabo started keeping a closer eye on his employees' regular phone bills. While perusing the hundreds of pages of records, he came across the long-distance calls made by every department in the city. What Sabo found surprised him--more than $7,000 in long-distance and international calls, placed on evenings and weekends.

On Sept. 13, Sabo wrote a memo advising City Manager Larry Moore of the alarmingly high off-hours phone use during the past six months, apparently in more than one department. And Sabo wasn't messing around; he said in the memo that he would be going to the police after meeting with Moore the following Monday.

Sabo did go to police, but according to the city's police chief, the investigation was delayed because city manager Moore "interfered" with the inquiry. And Moore is at the center of two other allegations: that he discouraged the criminal investigation of an employee, and used poor judgment in assigning the phone-abuse investigation to Assistant Fire Chief Bill Weisgerber, who had been given a two-day suspension for cell phone abuse only months earlier.

Moore, a 51-year-old executive who came to Milpitas three years ago from Richmond, says he was merely exercising his administrative authority and counters that he is under attack by Finance Director Sabo, who lost out on his job.

The charges of misconduct arise in the midst of upcoming elections for Milpitas' mayor and City Council. Councilmembers have been reluctant to discuss the strife-torn atmosphere among city employees, but have generally expressed confidence in Moore's ability to do his job.

Privately, city employees recount a soap-operatic cocktail, mixing equal parts high administrative intrigue and base personal prejudice.

ON SEPT. 13, the same day Sabo alerted Moore of the phone abuse, Moore wrote a reply exhibiting little curiosity about who had misused the phones or for what purposes, according to Sabo. Instead, Moore wanted to know who had told Sabo of the phone misuse and whether he had talked to anyone else about it. Sabo said it took him aback. "My job is to safeguard public assets," he said. "When it comes to internal accounting controls or audit issues, I check things all the time."

In his meeting with Sabo the following Monday, Moore asked for more information about who made the phone calls and at what expense. But "he seemed to dissuade me from reporting it to the police department," said Sabo, "which I really didn't understand."

Sabo says he reported it to police anyway, two days later. That was Sept. 18. But the phone-abuse criminal investigation's case number indicates that it was opened on the 274th day of this year--Sept. 30--nearly two weeks after Sabo first reported the alleged misdeeds.

Police Chief Charlie Lawson confirms that Moore discouraged the investigation. "The investigation was pulled back by the city manager," Lawson said. "I wasn't happy about it either. I'm not happy when anyone tries to interfere with an investigation. I don't know what his concerns are."

(Before coming on board as chief in 1994, Lawson had been a police captain in Richmond. Moore had been city manager in Richmond until 1993. Lawson said he and Moore "hardly knew each other" in Richmond.)

Moore admits that he insisted on handling the matter internally at first. "I wanted to determine if it was an administrative or criminal investigation. I needed to make the most effective use of the city's resources." Moore implied that smaller cases might best be handled internally, while larger cases call for police assistance.

Instead of a police investigation, Moore chose to assign the internal investigation to Assistant Fire Chief Bill Weisgerber "because it was in Bill's domain." Aside from being assistant fire chief, Weisgerber is also project coordinator of telecommunications in the city, which Moore says gives him a fuller understanding of the phone system.

But by all accounts, Weisgerber was an odd choice. He had been the most severely penalized city employee in an inquiry about cellular phone bills just six months earlier. In April he was suspended for two days over his phone misuse and required to reimburse about $800 to the city.

Moore justified his choice because of Weisgerber's expertise and long history of "excellent" service to the city, despite the fact that he had "made some mistakes" in his cell phone use.

In that earlier cell phone inquiry, Moore, Recreation Department Director Cathy Dressler and Police Chief Lawson were all found to be racking up $200 a month or more on their cell phones in the first months of 1996. Metro reported that these bills were considerably higher than cell phone bills in nearby Sunnyvale, a town with a reputation for efficient government.

During that earlier investigation, Mayor Pete McHugh ordered the staff to devise a cell-phone use policy. Six months later, the city still has no such policy. "The staff has told me that other issues took precedence," McHugh said last week. "If we don't have a policy at the next City Council meeting, I will propose my own interim policy for council consideration."

IN THE NEW investigation, police sources say they have waited for Weisgerber to complete his work, but believe the delay may have hampered their efforts to catch the crooks. "For a week the evidence was taken away from us," said the police source. "Now everyone involved in the investigation knows about it. They've had time to cover their tracks. It makes it real hard to stake out a phone."

Moore concedes "it may have been true" that the delay hampered the investigation, but insists he attempted to keep the internal investigation quiet. He said much of the evidence would not be affected by a two-week delay, including phone bills which record the origin, destination and cost of calls.

Moore says that more damage to the investigation was caused by an anonymous letter sent to the City Council on Sept. 23. The letter read: "Rumor abounds that employees assigned to the senior center and recreation department have acccumulated over $35,000 in long distance telephone charges to foreign countries." The letter sparked a public records request for the bills by Metro at about the same time as they were being handed over to police as evidence.

High-level city employees have accused Sabo himself of writing the anonymous letter. Sabo denies the charge.

Moore will not say when he alerted councilmembers of the criminal investigation, but apparently it was in a scattershot fashion. Three days after police officially opened the case, Councilmember Bob Livengood was quoted in the Milpitas Post as saying when the phone calls were occurring and in which city departments. Police sources say this has made a phone stakeout even harder.

Finance director Sabo said it was not the first time Moore had discouraged him from taking an issue to the police. In June, he told the cops of a recreation department employee who had spent several hundred dollars on a city credit card for clothes and other personal items. Sabo said Moore told him afterwards that he should have first reported the issue directly to him or to Cathy Dressler, the recreation department director.

In that case, Police Chief Lawson reports, the criminal investigation proved worthwhile, and the district attorney's office did issue a complaint. Sources say the employee was fired and ordered to repay the money.

CITY MANAGER MOORE says he was upset that Sabo did not go through official channels on the phone issue. Moore said Sabo reported the phone abuse directly to a friend in the police department rather than to himself or the police chief first.

Sabo was a cop for ten years, between 1969 and 1979, before becoming finance director. He said that the police chief wasn't in when he went to the police station to report the phone problems. He adds that at the council meeting the night before, the chief said he was aware "that I was reporting something the next day."

Inside city sources say it's hard to tell whether Moore was actively trying to get the police off his subordinates' backs or if he's merely upset that Sabo made a bureaucratic end-run around him by going directly to the police department.

For over a year Sabo and Moore have been embroiled in an ongoing feud some observers have called a deep personal animosity. Moore's supporters note that Sabo bid for the city manager job in 1993, but Moore was picked instead.

In April the council hired outside attorneys to investigate charges of Moore's preferential treatment of a department head. Sources confirmed that the investigation stemmed from Sabo's complaint about Moore's preferential treatment of Cathy Dressler, the director of parks and community services. In June the firm cleared Moore and sent the city a bill in the range of $90,000, according to Mayor Pete McHugh.

In the same closed-session meeting in June where Moore was exonerated, the council decided to investigate Sabo on charges of gender discrimination. According to the Milpitas Post, Sabo was accused of writing anonymous letters suggesting an affair between Dressler and Moore. Sabo denies the accusation.

McHugh says that the city attorney will present the results of the Sabo investigation during a closed session of the upcoming council meeting on Oct. 15. He said that if any results of the investigation can be made public, they will be discussed at that meeting's open session.

It is likely to be a tense and busy meeting as the council comes under pressure to discuss a cell-phone policy, the Sabo investigation and the allegations of phone misuse. The delay of the phone investigation has certainly angered the police union, which recently announced its political endorsements.

"The Police Officers Association is very concerned about a criminal case being pulled from the police department by the City Council," says Sgt. Bob McKean, vice president of the union. "At this time we have confidence the City Council will look into the matter."

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From the October 10-16, 1996 issue of Metro

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