State audit: Department of Agriculture's settlement offer in sexual harassment case was "improper"

In an audit released today, State Auditor Susan Montee says a $70,000 settlement offer made to a former Agriculture Department employee in a sexual harassment case was "improper."

In their response Agriculture Department officials blamed Attorney General Jay Nixon for everything.

Though their names are not mentioned in the audit, the settlement offer was made to former employee Heather Elder, who filed a complaint alleging discrimination and sexual harassment against then Director of Agriculture Fred Ferrell. Ferrell was later fired by Gov. Matt Blunt.

The department offered to pay the $70,000 through the Agriculture-Federal and Other fund. "Legal claims against the state and covered employees are to be paid from the state's Legal Expense Fund, with the approval of the Attorney General's Office (AGO)," the audit said.

The audit indicates the attorney general's office was asked early in the process to become involved, but declined, saying it could not enter the situation until the process of Ms. Elder's grievance filing with the Missouri Commission on Human Rights was complete.

In the meantime, Agriculture Department officials entered into negotiations with Ms. Elder and reached a tentative $70,000 settlement figure.

In December 2006, following the conclusion of the MCHR process, the AGO indicated it was now appropriate for them to provide representation. A check in the amount of $70,000 payable from the Agriculture-Federal and Other Fund was approved and issued by the MDA in February 2007, in an attempt to settle the matter. The payment was in contradiction to Section 105.711, RSMo, which requires legal claims to be paid from the State Legal Expense Fund. Payments from this fund require the approval of the AGO. Although the AGO agreed to represent the MDA in December 2006, the department approved this payment without the AGO’s assistance. This payment not only contradicted state law, it was also inconsistent with the purpose for which the federal and other fund was administratively created and the intent of the appropriations from that fund.
The settlement offer was rejected by the employee and the check was never presented for payment.
Eventually on October 10, 2007, the lawsuit was settled with the assistance of
the AGO by a payment of $82,500 from the State Legal Expense Fund.

The audit recommended that in the future all legal settlements be worked out properly with the aid of the attorney general's office.

Agriculture department officials disagreed with the audit's findings:

The Missouri Department of Agriculture (MDA) recommends the insertion of the following facts. Beginning May 23, 2006, and proceeding for many days, the MDA asked the Attorney General’s office for legal counsel as the MDA had no legal staff. By
statute, the Attorney General’s office is to provide legal support on behalf of its client, the State. It was only after a settlement had been reached in November 2006 that the Attorney General’s office suddenly agreed to provide legal counsel in December 2006. In addition, under state statute 105.711, State Legal Expense Fund, there was never any dispute as to whether this settlement qualified. The only question was that under the circumstances of the Attorney General’s office refusing to represent its client, MDA, when would the MDA be reimbursed for the transaction and how would the MDA bridge the obligation until state legal expense funds came through?
However, there is no known recourse when the Attorney General’s office refuses to represent its client. Furthermore, in all prior personnel cases up to the Elder case, the Attorney General’s office always assumed the counsel role for the MDA.

The MDA is pleased that this lack of action did create a catalyst for the legislature to fund and approve budget additions in the 2007 budget year. This provided the necessary support for our department to hire in-house legal counsel.

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To refresh your memory about the Heather Elder situation, check out the following passage from Columbia Tribune political reporter Jason Rosenbaum's Feb. 27 article on Ferrell's departure:

Blunt’s office last week released a copy of the Missouri State Highway Patrol investigation of the allegations, which included interviews with Elder, Ferrell and other agriculture department officials.

Elder alleged that Ferrell kissed her close to the mouth and called her "Princess." After Elder walked into a discussion about wearing jeans to work, Ferrell apparently said that she should participate in a wet T-shirt contest.

Elder also alleged she was a denied a promotion because of her gender.

She told patrol investigators of an instance when Ferrell called her into his office to explain why she was being denied a promotion.

"He also told me, ‘Men in positions such as mine choose women based upon their pretty face, not upon what is in their minds,’ " Elder is quoted as saying in the report. "He referred to his assistant," Christine Roark. "He said that Ms. Roark was not the brightest tool in the shed, but that she was his ‘show dog.’ "

Ferrell told investigators that ‘show dog’ was meant to be a term of endearment.

"He advised that he often called his wife a ‘show dog’, and conveyed a story how the term was used by his grandfather when he was younger," an investigator wrote, referring to Ferrell’s statements. "The story described a statement Mr. Ferrell’s grandfather made about Mrs. Ferrell. The statement concerned Mrs. Ferrell being, ‘a ‘show dog’ (attractive) but can she hunt?’ "