Police, Edgartown District Court, and Edgartown selectmen moved on three fronts this week in response to an 11-month police investigation into financial irregularities, conflicts of interest, and “gross mismanagement” of the town’s wastewater treatment facility.
On December 21, selectmen formally referred the investigation to the Massachusetts Ethics Commission, following a unanimous vote at their Monday meeting, December 19.
Selectmen also appointed an independent counsel to advise them on how to proceed with any possible sanctions against town officials or employees.
Edgartown District Court issued a criminal complaint against a local septage hauler, charging him with a scheme to falsely procure government services.
Throughout the criminal complaint and the police report, the court and police made it clear that the extent of fraud probably went beyond one septage hauler. They repeatedly wrote it would be fruitless to prosecute other local haulers who admitted to taking advantage of the lax system at the wastewater plant, because there are no sufficient records to support a prosecution.
The police investigation raises questions about conflicts of interest for elected officials, including an unnamed selectman and town employees.
Wastewater plant manager Joe Alosso told police that he permitted a selectman he refused to name, a wastewater commissioner, and a former commissioner, as well as current and former employees, to dump septage at no cost, bypassing the normal metering system, according the Edgartown police report.
Selectmen described the criminal complaint and allegations of conflict as shocking. Though town officials were aware of billing issues and lax control revealed by in an independent audit, they first heard of the criminal complaint and the conflict of interest allegations at their regular Monday meeting. The court held a probable cause hearing earlier that day and issued a criminal complaint about 10 minutes before the meeting began.
Town counsel Ron Rappaport cautioned that the complaint and police report are only allegations of wrongdoing, but he described those allegations as serious.
“There are allegations that various people received free pump out services, which gives rise to the conflict of interest allegation,” Mr. Rappaport said. “I think the public would be well served by having someone independent come in and take a look.”
The conclusion of the police investigation cast a shadow on Edgartown government, uncomfortable for town officials who take pride in the efficient and orderly management of town affairs. Selectmen took immediate action.
“I think time is of the essence,” selectman Margaret Serpa said. “I think we ‘d like to see this resolved. It’s not something I would like to see hanging over the head of the town.”
“You try to run your municipality,” selectman Michael Donaroma said in a phone conversation Wednesday. “You’re not there to make money. You try to be reasonable, but there’s a fine line between the honor system and giving away the taxpayers’ money.”
On December 19, the Edgartown District Court, acting on a request from Edgartown and State Police, issued a criminal complaint against Jay Araujo, owner of Jay’s Septic, alleging he dumped septage at the plant without accurately recording the amounts and in some cases not reporting any amount at all.
He is charged under a state law that makes it a felony to procure services from local government departments by making false statements, inviting reliance on false writing or recording, and using a trick or scheme that is misleading.
A conviction on that charge is punishable by fine of not more than $10,000 or by imprisonment in the state prison for not more than five years, or both, according to the law.
In an extensive finding of facts, clerk-magistrate Liza H. Williamson found probable cause for the charge of falsely procuring town services. The court calculated the loss to the town of Edgartown for those services at $26,611.
Ms. Williamson, in her findings of fact, wrote that “The Defendant (Mr. Araujo) admitted that ‘sometimes we do and honestly sometimes we don’t’ when asked if he wrote down the amounts of septic material he disposed of in the ‘sludge holding tank’ on the hill of the facility.”
The sludge holding tank is a dumping station for grease and other material outside of the regular metered dumping station. Access to the sludge holding tank is not restricted.
“The defendant stated that there were times when he wrote down the wrong numbers at the meter,” wrote Ms. Williamson in her finding. “Specifically, the defendant stated ‘I have done it. I’m guilty of that.’”
During questioning by State Police, Mr. Alosso acknowledged he was aware Mr. Araujo was dumping septage without paying the per gallon fee.
“Alosso explained that Jason Araujo does do a number of pumpouts for the town and he has permitted him to dump for free,” police wrote in their report. Police pointed out “under those circumstances Jason Araujo could have two or three other pumpouts already on board and thus discharge paying customers for free and bill out for those instances. Alosso agreed that would be possible.”
Originally, police sought a charge of larceny against Mr. Araujo, but they withdrew that request at the beginning of the probable cause hearing held December 19.
Citing existing case law, Ms. Williamson said using a town facility without sufficient payment is not considered property, an element of larceny necessary for the court to issue a criminal complaint.
Also in her findings of fact, Ms. Williamson cited the independent audit of the wastewater department.
“The audit revealed, at a minimum, gross mismanagement of the wastewater department that allowed septic hauler/disposal businesses to dispose of septic material at the facility and account for the amount of said disposal by means of an ‘honor system’ whereby the septic hauler would record the amount of each deposit of septic material manually in a recording log, with no check by wastewater department employees on the amount of each deposit. Among other things, the amounts on ‘the meter’ were never reconciled with the amount written in the log.
“I concur with State Police detectives assigned to the office of the district attorney for the Cape & Islands district that due to the gross mismanagement of the facility, that any further attempt to criminally prosecute anyone who did not admit to defrauding the facility would be fruitless, due to the fact that facility management did not maintain sufficient records to make a prosecution viable.”
In their police report, State Police recommended that the investigation be closed and that no other haulers be prosecuted.
“Due to the fact that there was no employee supervision, no accurate daily log as to who entered into the facility with dates/times, no video surveillance system, unlimited access to an unmetered grease pit and other factors,” police wrote, “it is difficult to reconstruct many of the specific dates/times in which individual specific haulers defrauded the town.”
Police questioned Mr. Alosso extensively about the practice of allowing certain haulers to dump septage without paying.
“Alosso said it was a personal decision, there was no policy in place, and it has never been discussed with the wastewater commission,” wrote police in their report. “He believed that they (the waste water commissioners) were aware of the practice.”
“We continued to discuss who else has had their septage discharged for free,” wrote police. “We informed him that former employee Matt Rodenbaugh told us that he had discharged for free on three occasions, one time for the residence he was living at and twice for houses he was caretaking. Alosso said that he recalled the one time for his own residence, but was not aware of caretaking jobs.
“Alosso stated that he does not charge waste water commissioners as they put in many hours of work for no pay. He acknowledged that wastewater commissioner Jim Carter and former wastewater commissioner Floyd Norton had not been charged. He also acknowledged that a selectman had not been charged as well. Alosso would not provide that name while being recorded.”
Mr. Alosso also conceded he had used the facility without paying.
“I informed Alosso that Jason Araujo explained that he (Alosso) had paid him $100 to pump his septic and truck it to the facility where he then discharged it into the ‘grease pit.’ Alosso acknowledged that was true.”
Edgartown selectmen Art Smadbeck, Michael Donaroma, and Margaret Serpa all said they had paid for all services they received, when asked directly whether they received free pumpout services. All said they were unaware of anyone receiving free services.
“It makes a political mess,” Mr. Smadbeck said.
“This is really all about not watching the cash register,” Mr. Donaroma said. “The haulers were dumping off their septage and not paying for it. The system was metered so poorly. I’ve got to go back and make sure I’ve been billed and paid.”
Wastewater commission chairman Tim Connelly was out of town this week. When reached by phone, he declined comment on the investigation, but did talk about the allegation of free service.
“No, I’m not aware of it,” Mr. Connelly said. “There never was such a policy as far as I know. I paid to get mine pumped.”
Commissioner Jim Carter would not talk specifically about the police report, in which Mr. Alosso said he did not charge commissioners, including Mr. Carter, to use the wastewater facility.
“I really don’t want to comment on that,” Mr. Carter said. “If it happened it was very limited. I’m not going to comment on who it was. I don’t think at this point it makes a difference.”
Wastewater commissioner Cliff Karako could not be reached for comment.
Mr. Alosso also declined comment on the criminal complaint and the police report.
“Because of the pending criminal case, I probably shouldn’t,” Mr. Alosso said. “Our position is that we’re going to wait and let the process take its course. Deficiencies were found as part of the audit, and the deficiencies were immediately remedied. That’s the best that can be expected. When a situation arises, the situation is corrected.”
Because of the nature of the conflict of interest allegations, Mr. Rappaport and town labor counsel Jack Collins advised selectmen to appoint an independent counsel to review the investigation and advise selectmen of any action they might take against town officials or employees.
At their regular meeting Monday, selectmen voted unanimously to appoint retired judge John Paul Sullivan, now with the Boston law firm Mintz Levin.
Mr. Sullivan served as a Massachusetts Superior Court justice. He has taught law at George Washington University Law Center, Harvard Law School, and four other schools. He has experience in town government as a chairman of the Weston board of selectmen. He is also an Edgartown homeowner.
“I was asked by the board of selectmen to review the facts and give them an independent recommendation,” Mr. Sullivan said in a phone interview. “The selectmen don’t make the decision about criminal matters, but the internal government decisions would be made after I review the decision and I review the facts.”
Typically, a review of this sort would include extensive review of the police reports, audits, and other documents, as well as town policies and local and state laws that apply. It may also include additional interviews.
“My responsibility is to get all the facts I can muster, examine them and make appropriate recommendations to the board of selectmen,” Mr. Sullivan said.