Hoke school board could face charges

By Catharin Shepard • Editor • Hoke and Moore County District Attorney Mike Hardin made it clear in a Superior Court hearing Monday that he is looking into the Board of Education members receiving “staff retention” bonuses as a criminal matter, not a civil matter.

“I am considering whether to charge the school board members of a criminal act,” Hardin said during the hearing.

The district attorney said that he had “never encountered case law where all five (board members) possibly committed a criminal act.”

“Clearly all five board members took monies they were not entitled to,” he said.

Two different legal issues were put before a judge during the hearing: first, Hardin’s request that the judge unseal certain records the school district asked to be sealed, which the DA argued are needed for possible further investigation; and secondly, a motion from the school board attorney to dismiss the matter.

After remarks from Hardin and school board attorney Grace Pennerat, the Honorable Superior Court Judge Stephan Futrell asked them questions about the proceeding, but did not rule on either of the two issues. The judge granted a continuance until the week of December 11 after the school board attorney asked for the case to be continued, citing that she is not a criminal attorney.

The hearing was the latest event of note in an ongoing probe of Hoke County Board of Education members this year accepting over $24,000 total in bonuses, paid from local taxpayer money. Most of the school board members have since either taken action to pay the money back, or made arrangements to not receive their stipend until the money is recouped.

Under the law, school board members’ compensation must be approved by county commissioners. Hardin said he contacted the Hoke County Board of Commissioners to ask whether or not they had approved the bonuses.

“The county commissioners indicated that they had not,” Hardin said.

The News-Journal asked Commission Chairman Allen Thomas the same question earlier this year. At that time, Thomas said the commissioners had not known about the bonuses.

Based on the information he obtained, “It was clear that these monies came outside the normal scope of payments,” Hardin said.

“There’s no such thing as a retention bonus for an elected official,” he said during the hearing. The school board members received the bonuses in January and June, at the same time school staff received retention bonuses. The elected officials received either $600 or $1,200 each in January, depending on how long they had been on the board, and all five received $4,000 each in June.

In August, Hardin obtained a court order – signed by Futrell – compelling the school district and the county commissioners to produce records related to the bonuses. The district did so, but an attorney for the school board asked Futrell to keep some of the records sealed. Futrell conducted a private, “in-camera” review of the records and signed off on sealing some of the records.

The sealed records mostly consist of closed session minutes from several school board meetings, and communications with the board’s attorney, according to court documents.

Hardin filed a motion for a hearing to request that the records be unsealed. In the motion, Hardin argued that the records were not protected under attorney-client privilege.

The school board’s legal counsel filed a motion to dismiss the matter.

Both issues came before Futrell at the hearing Monday, held in the main courtroom of the Hoke County Courthouse in Raeford.

In her remarks, Pennerat argued that based on the law, the records that are sealed do fall under attorney-client privilege. She noted that under public records laws, a pre-mediation process should take place prior to any civil action to obtain public records. However, in this situation, no mediation took place, she said.

The attorney for the school board also argued there had not been any summons issued to the Board of Education and there was no execution of service of process. The board attorney moved to dismiss.

In response, the district attorney said that he is not pursuing the matter as a civil proceeding, but as a criminal inquiry.

“I’m not making a public information request, I’m making a criminal inquiry request,” Hardin said.

While Hardin spoke in court, the school board attorney objected several times to statements he made. Each time, the judge told Hardin to proceed.

Hardin said that he had sufficient probable cause in seeking the court order to compel the school district to turn over records. He could have, instead, asked the North Carolina State Bureau of Investigation (SBI) to execute a search warrant for the records, the DA said. An SBI agent sat with Hardin in the courtroom during the hearing.

Hardin went on to say he wanted to get to the bottom of what the board members were told about the bonus money, including what the board’s attorney recommended to them. At least one school board member said during an open meeting in August that the attorney had recommended they pay the money back.

The school board attorney did not challenge the court order to produce the records, Hardin said, and filed the motion to dismiss after he sought the hearing to have the sealed records, unsealed.

“I don’t believe that they have attorney-client privilege,” he said. If they did have it at one point, they waived that privilege by discussing the matter in open session, Hardin argued. He noted the school board attorney represents the board as an entity, and can’t represent the board members as individuals.

Pennerat argued in response that the elected officials have not waived their attorney-client privilege.

The judge questioned Hardin and Pennerat about the law governing the issues at hand. He also asked about the question of the sealed records, should the district attorney file search warrants in the probe.

“What happens if the state says, okay, I’ll go get it? We’re right back where we were,” Futrell said.

“How would a search warrant be different?” Futrell asked.

The judge additionally questioned what might happen should the board members, while being represented by a single attorney as an entity, disagree individually on the course of action they wish to take.

Pennerat responded to several questions from the judge by saying that she is not a criminal attorney.

“We were prepared for a civil matter,” she said.

When asked by the judge if the school board could be charged criminally as a single entity, Hardin said yes. The board members, and, he said, others such as superintendents could also be charged individually.

Additionally, Hardin brought up whether a former school board attorney, whose firm no longer represents the school board, might be considered an accessory for not reporting possible illegal activity. Pennerat objected to what she said was an “accusation” against a person who was not present in court to defend himself. Hardin responded that he was not accusing, “simply raising the issue.”

School board lawyers owe an ethical duty to the board as a whole, not to the individual board members, and the duty should be to protect the entity and the county’s interests, not the individual board members, according to Hardin.

Pennerat questioned that the direction of the discussion had not been part of the motion to dismiss. The judge asked the school board attorney if she wished to be heard, or to come back at a later date. She asked for a continuance until January; Futrell granted a continuance until December.

The judge did not rule on the school board attorney’s motion to dismiss or Hardin’s request to have the sealed records opened.

Futrell noted he is from a different judicial district – District 16A – and only working in Hoke County for six months, with his time here almost up. Should the case continue past his return time, another judge will be responsible for hearing it.

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