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Szerlag: Brown investigative report a vindication

By Staff | May 6, 2020

Cape Coral City Manager John Szerlag has issued a statement saying the results of a City Council commissioned investigation released late last month vindicate him of accusations that were “baseless and false.”

“The investigation into the serious accusations of wrongdoing leveled against me by Finance Director Victoria Bateman has been completed by Deborah Brown (Brown Law & Consulting),” he said in the statement released late Tuesday afternoon. “As I expected, the investigation initiated by the Mayor and City Council has shown Ms. Bateman’s accusations to be baseless and false.

“The outcome of the investigation completely vindicates me. This report is only one step toward restoring my reputation, which has been stellar through my 25+ years as a city manager. These false allegations combined with the attacks on my integrity during Council meetings have been repeated multiple times by the news media and shared on social media. One needs only to Google my name to see the damage that has been done.”

Cape Coral City Council commissioned the investigation in January after its members received a letter of complaint from Bateman alleging she was placed on administrative leave in November in retaliation for a series of refusals she said began in December of 2018 when she would not sign off on a plan to outsource maintenance at the city owned and operated golf course. She said her relationship with Szerlag cooled further after she refused to endorse an administration proposal to create an employee health clinic because she believed Council had not been properly informed as to its true start-up costs. The letter also cites what she said were administrative improprieties involving Szerlag and the city’s contract business manager and former police chief, Jay Murphy.

Szerlag had placed first Bateman, and then two other members of her department, on paid administration leave after the IRS levied more than $400,000 in fines and penalties for a FICA payroll tax payment snafu attributed to a no-longer-employed staffer in Bateman’s department. The problem came to light after the IRS took more than $370,000 in expected gas tax revenues to offset fines and penalties related to late payments and other issues.

A city auditor has since told Brown that “although the required deposits and reports were inaccurate, incomplete or not filed in accordance with IRS deadlines, all payroll taxes due were remitted…” The city has said most of the money has been recovered.

Brown concluded in the report dated April 14 that “the evidence does not support a conclusion” that Szerlag retaliated against Bateman by launching an investigation into the problem within her department nor by delaying his approval for federally mandated medical leave time by not signing her paperwork for two days, another allegation.

Brown also concluded that the evidence did not support any finding that Murphy’s actions related to the proposal to outsource golf course maintenance, or his involvement related to the city’s employee health clinic, were improper.

Council members, who discussed the report at their April 20 meeting, had varying views on the report’s findings, ranging from confidence that the allegations have been proven to be unfounded to the stated belief that there still are some questions remaining.

Councilmember John Carioscia, a career law enforcement professional who had stressed the need to let the investigation into the Bateman allegations unfold prior to any actions by Council, said then that the Brown report cleared both Szerlag and Murphy.

On Wednesday, he again said that the conclusions constitute a vindication of both.

“I agree with the investigation and I think it was thorough and I am pleased with the outcome and, hopefully, we can move forward,” Carioscia said.

Mayor Joe Coviello who, in January had unsuccessfully tried to first have Szerlag suspended and then fired, took a different view, saying he did not see the report as an all-clear.

He reiterated that Wednesday in the wake of Szerlag’s statement, with one concession.

“I don’t know if the word ‘vindicated’ is correct or the word ‘cleared’ is correct. There are certainly some things that could be subject to discussion, but certainly not enough to push it forward,” he said in a telephone interview Wednesday.

What remains at issue in the mayor’s mind is the disputed timeline as to when Szerlag became aware of the IRS problem and when he informed Council of the issue.

“What I initially brought forward was the timeline about when the manager knew about the withholding of the gas tax money,” Coviello said. “I think if you look closely at the report there were several weeks where he knew and did not divulge it to Council.”

Who knew what when, also part of the Brown investigation, is an issue because Council was looking to extend Szerlag’s contract until his retirement. Coviello was tapped by Council to negotiate the extension, which was then approved, with a salary bump.

Coviello said Szerlag did not bring the matter to his attention until he was told to do so by Carioscia, who had heard it from other sources within City Hall. That conversation was brief and took place shortly before the Council meeting at which the contract extension vote took place.

“I still think there was a transparency issue with this particular issue with the gas tax,” Coviello said.

And that, he said, is on Szerlag.

“You can delegate authority but you can’t delegate responsibility, and I believe he was aware of the issue during the negotiations of the contract,” he said.

Coviello was asked what action he might suggest, if any.

“As you know, we’re in the search for a new city manager,” he said, explaining the next steps to be taken. “I think if we did get someone who can get in here sooner rather than later, it may resolve itself.”

Council members are in the process of selecting five finalists from among a field of 63 applicants, including 11 semi-finalists selected by a hired consulting firm. Their individual choices are due at 3 p.m. Friday with discussion again expected at Monday’s City Council meeting.

Szerlag, meanwhile, said he is prepared to move forward and looks forward to continuing his work in the city until his retirement later this year.

“Moving forward, we must focus on the issues that affect our community and work to maintain our economic sustainability,” he said. “We have some challenges, but I am confident we can address these challenges in a professional manner.

“Last year, I announced my plans to retire this upcoming November. After more than 45 years in public service, I knew it was time to call it a ‘career.’ I look forward to spending these next months working alongside our excellent crew of City employees with the support of our community.”

Bateman, though her attorney, said Friday she stands “firmly” behind the allegations made.

Editor’s Note: This story has been twice updated to include comments from additional parties.