Thomas misappropriated $200,000 in public funds, district attorney alleges
by Sara Selis
The former head of Menlo Park's wastewater treatment district misused up to $200,000 in public funds by accepting kickbacks, rigging the bidding process and stealing district property, the San Mateo County District Attorney's Office alleged this week. Charles Thomas Jr., former manager of the West Bay Sanitary District, was charged Monday with 36 counts of misappropriation of public funds, embezzlement and bribery. The criminal charges resulted from an investigation that began six months ago when sanitary district employees, suspecting foul play in the awarding of an equipment contract, called the District Attorney's Office.
Thomas, a 50-year-old Boulder Creek resident and a 22-year veteran of the sanitary district, has agreed to surrender to the court. His arraignment is tentatively scheduled for April 25. Thomas will plead not guilty, said his attorney, Edward Pliska. He served as manager from 1991 until March 10, when he resigned.
"We were all shocked by this," said John Inglis Jr., district board president. "(Thomas) didn't seem like that type of person."
The sanitary district had placed Thomas on administrative leave in mid-February after being informed of the district attorney's investigation. Later, when evidence of Thomas' alleged wrongdoing began to emerge, the board asked him to resign. He did so on March 10. Thomas became manager of the West Bay Sanitary District in 1991, after serving as a plant manager and projects manager.
According to the district attorney's case, Thomas accepted kickbacks from and inappropriately steered business to Peninsula Pump and Equipment, a South San Francisco company. The event that tipped off employee-whistleblowers came in October, when Peninsula Pump and Equipment was one of two companies to bid on a contract for a generator. When Peninsula Pump's bid came in higher, the case alleges, Thomas disposed of that bid and told the company to come back with a lower bid. The company did so and was granted the contract for $64,000. A portion of that and other money later came back to Thomas through disguised kickbacks. Peninsula Pump and Equipment has done $1.3 million in business with the West Bay Sanitary District since 1991, said Tim Clayton, acting district manager.
Thomas also stole sanitary district property, including equipment and significant amounts of diesel fuel, said Deputy District Attorney Peter Lynch. Thomas apparently used the diesel fuel to generate power for his home in Boulder Creek, and he gave some of the fuel away free to his neighbors. "They thought he was a nice guy," Lynch said. The worth of the stolen property has not yet been determined.
In an effort to recoup the funds lost through the fraud, the West Bay Sanitary District on Tuesday filed a civil lawsuit against Thomas, Peninsula Pump and Equipment and the company's owners. The suit seeks $200,000 in damages, though that amount may rise as auditors finalize their estimate of the losses.
"Ultimately, this is taxpayers' money," Inglis said. "We intend to get every penny back that we can."
The West Bay Sanitary District provides wastewater collection and treatment services to about 55,000 customers in a 13-square-mile area covering most of Menlo Park and parts of Atherton, Portola Valley, East Palo Alto, Woodside, Redwood City and unincorporated San Mateo County.
In addition to cooperating with the District Attorney's Office, the wastewater district has been conducting an internal investigation of its financial and accounting practices, with an eye toward preventing such abuses in the future.
"The board and staff clearly fell short on this, and we are going to make sure it never happens again," the sanitary district said in a written statement. The district has introduced a whistle-blowers ordinance to protect employees who suspect wrongdoing. The organization is also instituting stricter auditing procedures so that receipts are inspected in greater detail and with greater frequency.
Morale among the West Bay Sanitary District's 22 employees has suffered considerably as a result of the investigation. "We're all concerned about morale. It is a problem," Inglis said.
The board has met with employees, is working on teambuilding and is emphasizing the importance of open communication. Employees are being encouraged to take advantage of employee assistance counseling services available to them. "We were all shocked by this. (Thomas) didn't seem like that type of person."
--John Inglis Jr., district board president.
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