Milpitas once again finds itself at odds with its city manager, whose litigious posturing has apparently triggered a probe into suspected corruption.
The City Council will convene tonight for a closed-session performance review of Tom Williams, the agencyâs highest-ranking staffer for more than a decade. An agenda posted online barely 24 hours before the scheduled meeting lists three items up for discussion: Williamsâ evaluation, a lawsuit he filed against the city to block the release of public records and one more anticipated legal challenge.
Whatâs not mentioned, but will no doubt come up in the parley, are allegations that Williams misused public funds. According to a document obtained exclusively by San Jose Inside, Williams spent $37,000 of taxpayer money on his personal attorney, signing it off as âofficial city business.â
Under Milpitas cityÂ policy, thatâs ground for discipline or termination. Under state law, namely PC 424, thatâs a felony punishable by imprisonment. The cityâs outsourced legal counsel, Chris Diaz, said as much in a May 5 letter to the council. Incidentally, that's the same charge prosecutors leveled against disgraced Santa Clara County Supervisor George Shirakawa Jr.Â a few years back.
Diaz said he found out about the illegal charges on May 2 from Jane Corpus, the cityâs interim finance director. The letter describes how Williams used his city-issued credit card to pay a $7,000 legal bill to Ad Astra Law Group and later signed off on âvarious documentsâ requesting an additional $30,000 in public money for the same firm.
Once Diaz caught wind about the unlawful expenses, he emailed Williams, demanding that he reimburse the city and noting that the charges were never justified to begin with. Williams obliged, but thatÂ makes him no less liable under the law. San Jose Inside has filed a California Public Records Act request for Williamsâ charge card statements, but the city has yet to provideÂ them.
Two days after Diaz found out about the misappropriated funds, a city-commissioned auditing firm raised concerns about the charges, deemed the agency âhigh riskâ and called for âa more thorough review of the cityâs finances and controls.â
The auditors may have never learned of Williamsâ expenses had he not taken his own city and reporters to court to halt public records requests by San Jose Inside and the Milpitas Post. According to Diazâs letter, the auditors found out about Williams hiring Ad Astra Law Group for his personal legal defense from news reports.
âThe auditors have knowledge of the city managerâs legal dispute from media articles and are aware of the law firm name,â Diaz wrote. âThe auditors are now deeming the city a âhigh riskâ and will now need to conduct a more thorough review of the cityâs finances and controls. I have now been asked to speak with the auditors. In addition, the city now has a pending public records act request seeking this information.â
San Jose Inside broke the news about the legal dispute after obtaining a copy of a cease-and-desist letter Williams sent to Mayor Rich Tranâthe city managerâs most vocal critic. The letter claims that 32-year-old Tran repeatedly discriminated against the 53-year-old Williams based on the latterâs age. It also alleged that the mayor inappropriately disparaged the city managerâs job performance at public events and on social media.
Tranâs criticism stems from Williamsâ connection to a years-long exodus of top-tier staff and several personnel lawsuits that resulted in costly settlements on the public dime.
In 2015, the city shelled out $600,000 to settle an age discrimination clime filed by former office clerk Lori Casagrande. In March 2016, the cityâs former personnel director, Carmen Valdez, won $100,000 to drop charges of retaliation. A month later, the city paid $140,000 to the federal government over another age discrimination claim. Last month, former city attorney Mike Ogaz settled another retaliation claim in exchange for $975,000. San Jose Inside has requested information about additional settlements, but has yet to see records responsive to that request.
Then thereâs staffÂ turnover, which putsÂ taxpayers on the hook for a substantial sumÂ in hiring and training costs. Since Williams became the cityâs top bureaucrat in 2006, his behavior has prompted numerous department heads to abruptly pack up and go. Many of them took medical leave before quitting, while others retired early.
Public works and engineering director Greg Armendariz took medical leave and resigned in 2012. Kathleen Phalen filled the role as interim until the city appointed Jeff Moneda, who took medical leave and resigned in 2014. The city eventually split the role into two positions, with Steven Machida promoted to chief engineer in early 2015, but resigning in fall of 2016 without public explanation.
The cityâs planning division has seen equally high turnover. In 2011, planning chief James Lindsay left his post. His successor, Diana Barnhart, followed suit the next year after a protracted medical leave. Steve McHarris became the third planning director to resign in four years in 2015, but he filed a complaint against Williams before ducking for cover on medical leave and taking a job with the city of San Jose. From 2015 to last year, the Milpitas PostÂ reported,Â three rank-and-file city planners left, as did acting directors Sarah Fleming and Bill Ekern, who resigned after Brad Misner stepped in as permanent director. The city had to outsource the departmentâs functions to just to keep pace with planning applications.
The cityâs legal department began to unravel after Ogaz tried to address McHarrisâ concerns. According to theÂ ex-city attorneyâs retaliation lawsuit, Williams urgedÂ the council to fireÂ the entire three-person legal department as payback for Ogaz investigating the McHarris complaint. Milpitas has since outsourced its legalÂ work to Diaz.
From the timeÂ Mayor Tran was sworn into office, he has butted heads with Williams. The youthful mayorâs missteps gave Williams fodder to lash back. Tran admittedly broke open meeting laws by emailing the entire city council. He also unapologetically plagiarized President Obamaâs inauguration speech as his own. But many of theÂ mayorâs constituents have applauded his calls for accountability. His Facebook page is full of supportive comments from residents telling him to keep up the fight.
Williams and Diaz have repeatedly cautioned Tran and the rest of the council from openly criticizing the city. During a public budget hearing last week, Williams characterized Councilman Anthony Phanâs questions about city spending asÂ âbadgering.â When Tran postedÂ on Facebook about how Williams has been linked to expensive litigation, the city attorney told him to be careful aboutÂ posting such opinions. Sources say the repeated warnings have had a chilling effect on the newer council members.
Meanwhile, Williams has beenÂ building a legal case against Tran and the city for the past several months. In March, Williams hired Ad Astra Law Group, which penned the cease-and-desist letter to Tran and sued to block its release, along with other documents. Itâs unusualÂ that Williams went toÂ the trouble of a âreverse CPRAâ lawsuit, however, because if he sued Tran as he said he would by April 28, those allegations would have become public anyway. Itâs possible that WilliamsÂ didnât originally plan to follow through because of theÂ optics ofÂ a city manager trying to demandÂ a seven-figure sum from his own agency.
Tonightâs agenda mentions additional âanticipated litigationâ and names the city as defendant, which might relate to the age discrimination claimÂ against Tran. TheÂ city managerâs contract protects him from termination without cause, but Diazâs allegation of graft could give the council grounds to fire him.
Williams and his legal counsel did not immediatelyÂ respond to a request for comment. Williams has defended his record in the past by pointing out that he balances the budget every year. The Milpitas police union came to his defense as well, sending an open letterÂ that commended the city manager for not outsourcing their job.
Tran told San Jose Inside that he has no idea whatâs will happenÂ tonight, but that he hopes his colleagues do their due diligence in holding the city manager accountable. âI let the universe do whatever it does,â TranÂ said. âI canât control the things I canât control. Iâm hopeful that regardless of what happens, Iâm going to do what the community of Milpitas taught me and do the right thing.â
The homegrown mayor admitted that heâs made mistakes, but that heâs learning and his message remains the same. Williams is the only city employee the council has the authority to evaluate, Tran said, so he takes that responsibility seriously.
âI literally have six months of experience as mayor,â said Tran, a countyÂ social worker by day. âI donât have all the answers. I feel like when I started, I was the driver. The city car only fits five people, you know, and it seems like Iâve been moved to the passenger side.â
The timing of the closed-session meetingÂ is also noteworthy. Vice Mayor Marsha Grilli, who tends to be sympathetic to Williams, called for the klatch the same day Tran leaves for Guam on a two-and-a-half-week assignment for the Army Reserve. While the council finally evaluates itsÂ city manager, which the mayor has urged them to do all year, Tran will be an ocean away.
This article has been updated.