Oregon Whistleblower suit settled for $125,000

SALEM, Ore. (AP) -- An agency that provides centralized services to schools in the middle Willamette Valley has quietly settled a lawsuit brought by a whistleblower. Complaints from the former business manager of the Willamette Education Service District set off investigations of mismanagement and resulted in the firing of the district's superintendent, Maureen Casey. The former business manager, Kathy Campbell, will get $125,000 in the settlement -- about a third going to her lawyer, the Salem Statesman Journal reported Monday. The paper says the district signed the settlement June 1 but that came to light only recently, when the paper asked the district for documents. Campbell alleged Casey retaliated against her. She filed suit in September 2010, asking for $1.58 million in damages. The district said it settled with Campbell under pressure from its insurance carrier. If it had continued to litigate, the district would have borne the cost. "The board has reluctantly agreed to settle this case," board member Larry Trott said in a statement. Campbell declined to comment. "Her only statement is that the matter has been resolved, and she's glad to put it behind her," said her lawyer, Larry Linder. The agency serves 17 school districts in Marion, Polk and Yamhill counties. It's one of 17 such districts in the state that provide centralized services such as information technology or special education. An internal investigation into Campbell's complaints confirmed management and financial improprieties. Then a state audit completed in January 2010 found questionable expenditures, improper contracting, commingled funds and an effort to hide the district's true financial condition. The Statesman Journal's investigation documented further problems and showed that concerns about the problems were ignored for years. Since then, the district has faced multiple lawsuits, shut down money-losing entrepreneurial ventures and laid off a third of its workers. With an annual budget of $95 million, the district ended the last school year $2.1 million in the red. Among the lawsuits is Casey's, alleging wrongful termination. Oregon public meetings law allows public bodies to discuss lawsuits in sessions closed to the public, but final decisions must be made in a public vote. The board's minutes don't record a vote on the settlement. District spokesman Brian Florip said a vote was not required because the district's contract with its carrier allows the insurance company and the district's lawyer to resolve the case without the board's approval. Published: Wed, Jul 25, 2012