Police transcripts shed light on theater probe

In an act of transparency, the Palo Alto Police Department Wednesday allowed the Weekly to view interview transcripts and other evidence collected during an 11-month investigation into financial irregularities at the Children’s Theatre.

The 1,000-plus pages are the supporting documentation behind a 120-page police report released Monday. That report was written to communicate to the Santa Clara County District Attorney’s Office, not as a summary for the community, police Capt. Mark Venable said Wednesday.

The civil attorney for Children’s Theatre Director Pat Briggs has cautioned the report only presents one side of the convoluted case. Attorney Jon Parsons said Briggs will be able to address many of the city’s allegations — once she is clear of an administrative process relating to her possible termination.

The documents reveal previously unknown findings from the probe, which has rocked Palo Alto by accusing beloved theater officials of embezzlement — by “skimming over a prolonged period of time.”

Among the many findings, the new documents show that attention shifted to the internal handling of finances almost immediately after the June 18 burglary at the theater.

The police investigation alleges that Briggs kept (or left in the theater) about $18,700 of city money since 2001.

According to a transcript of a July 8 interview, Briggs and the late Assistant Director Michael Litfin struggled to explain their system of using traveler’s checks purchased with city money to pay themselves back for expenses incurred on trips with children involved in theater productions.

“We just sound totally stupid,” Briggs commented at one point about their explanations, according to the transcript.

The investigation also alleges that theater staff used as much as $50,000 of additional city money improperly, in illegal misappropriations of funds. The police called into question the annual trips for theater participants led by theater staff members, sales of “surplus” costumes and the mounting of extra performances of plays for fund-raising purposes.

The city should not have paid for the trips to places such as Southern California and Atlanta, police and theater staff agreed. The nonprofit Friends of the Palo Alto Children’s Theatre or the participants’ parents were expected to cover the full cost of the trips to see or put on performances.

That didn’t always happen, the documents reveal. For at least some trips, police Sgt. Michael Yore, the lead investigator, found no evidence that any parents paid anything.

And most of the money from the Friends had come straight from the city via costume sales or revenue from the extra performances — funds that should have gone to the city, the documents indicate.

The Friends received more than $17,000 since 2000 from such extra performances, which cost the city at least $5,550 to produce, according to Yore.

The Friends then gave this money back to the theater to pay for the trips.

Beginning at least in 2001, theater staff used a document labeled “Agreement,” a type of form-based revenue contract, as authorization to transfer money from the extra performances to the Friends.

But Assistant City Attorney Don Larkin said theater staff used the incorrect form and that the City Council would have had to approve any transfers of money from the city to the Friends. The money passed through the theater’s “outreach fund,” a category intended to pay for its programs in local schools.

No city attorney approved the contracts, which were illegal, Larkin has said, confirming comments attributed to him in the 120-page summary of the case by Yore.

Current Administrative Services Director Lalo Perez said that, after he learned about one of these extra performances in 2004, he told Briggs to stop giving money from performances to the Friends.

But Yore discovered that several extra performances occurred after Perez talked with Briggs.

In addition, the city published an internal guide to revenue contracts in 2004 or 2005. The police investigation did not find any contracts between the Friends and the theater after that, yet the practice of staging extra performances continued.

Theater employees also billed trip expenses to non-trip accounts on several occasions, the documents show.

The police also collected the receipts, reimbursement requests and checks Briggs received related to the 126 times she submitted multiple reimbursement requests to both the Friends and the city.

On three occasions, reimbursement requests with the same receipts were submitted once to the city and three times to the Friends.

Although the documents show that Briggs makes several conflicting and incorrect statements, received multiple reimbursements for at least 126 purchases, continued permitting revenues from extra performances to go to the Friends (after being instructed not to), and followed irregular money-handling and record-keeping practices, the investigation did not provide hard evidence that she intentionally stole from the city. This purported shortcoming was reportedly a factor in the decision by the district attorney’s office not to prosecute the case and take it to court.

Despite the Friends group’s central role in the case, Yore chose not to interview members of the Friends’ Board of Directors. Board members said they would only be interviewed with an attorney present and Yore concluded that with legal representation they would not be able to be forthcoming, according to the documents.

Police Chief Lynne Johnson said the Friends would only be interviewed as a group.

In one February interview transcript, Yore states that he needed to interview the Friends board members.

“I just need to talk to the Friends. … You see how quickly it goes when you sit down and talk and then we leave. … It’s done,” he said.

Yore also said he initially respected the theater employees’ credibility.

“I trusted everybody here, too,” he said.

Johnson said police intended to interview Costume Supervisor Alison Williams and Program Assistant Richard Curtis on Jan. 24, but the interview with Briggs took too long. After that, both were represented by an attorney and declined to be interviewed at all, she said.

Mayor Larry Klein, the attorney handling Litfin’s estate, has contested his portrayal in the 120-page report, in which Yore stated he and state Sen. Joe Simitian (executor of Litfin’s estate) were “reluctant” to turn over to police additional traveler’s checks Simitian reportedly discovered in Litfin’s condominium after his death. The checks were apparently missed by a police search in late January.

The basis for Yore’s conclusion of reluctance, according to the transcript of a February interview, was that Klein told Yore he believed the checks were Litfin’s property. Yore then said they were subject to a search warrant and he agreed to fax the warrant to Klein, who then turned over the checks.

The 120-page police report is posted online at http://www.cityofpaloalto.org/depts/pol/

Related material:

• Benest may have initiated detectives’ Texas trip

• Theater investigation focused on ‘skimming’

• TIMELINE: Children’s Theatre investigation

• ARCHIVE: Children’s Theatre investigation