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Two severance agreements had no complaints against Rutherford

Wednesday, Feb 5, 2014

* A few days ago, the attorney representing Treasurer Dan Rutherford’s accuser said this to WLS

“Their standard M.O. (mode of operation) is to work out standard severance agreements.That’s what they do, and they’ve been doing that the last two or three years with employees. So I sent a letter to the general counsel, we openly discussed negotiating a severance agreement for about ten days, then there was this press conference on Friday that came out of nowhere”.

I had already heard about previous severance agreements and had checked into that over the weekend. As I told subscribers this morning, I was told that the agreements had nothing to do with any sort of complaint against Rutherford.

* The Sun-Times followed up

Dan Rutherford’s office today confirmed that two former employees negotiated severance agreements with the office since the Treasurer took the office in 2011.

However, a spokeswoman said there was no accompanying complaints leveled against Rutherford tied to those severances.

“There have been two severance agreements in Treasurer Rutherford’s office during his time in the Treasurer’s office,” said spokeswoman Mary Frances Bragiel. “But no complaints were lodged by the employees and no complaints were lodged against Treasurer Rutherford in connection.”

That particular angle appears to be a dead end, which, of course, is good news for Rutherford.

- Posted by Rich Miller        

61 Comments
  1. - Oswego Willy - Wednesday, Feb 5, 14 @ 3:11 pm:

    If Rutherford can knock down each arguement, without having to go directly to the accuser in the in next week, there is enough to do to try to head off major problems….

    Unless there are things we don’t know that could be major.

    This, however, is probsably the best way to start knocking these down, one by one, if Rutherford can, and without raising any more red flags.


  2. - Anon - Wednesday, Feb 5, 14 @ 3:22 pm:

    Are severance packages that common in state government? I’ve been a state employee for nearly 25 years, and have been let go during a leadership change and I’ve never heard of a severance package. I think those of us in non union positions hoard vacation days because we know there will be no severance package.


  3. - walker - Wednesday, Feb 5, 14 @ 3:23 pm:

    Rich: your efforts and thoroughness do you proud. Thanks.


  4. - wordslinger - Wednesday, Feb 5, 14 @ 3:23 pm:

    Those severance agreements have to be public record, right?

    I’m assuming, at least, taxpayers are entitled to know the payout amount.

    Drip, drip, drip….


  5. - Gator - Wednesday, Feb 5, 14 @ 3:26 pm:

    I had the same thought as Anon. I have worked in government for a while and have never heard of people receiving severance agreements.

    I would imagine that such agreements are subject to FOIA.


  6. - Rich Miller - Wednesday, Feb 5, 14 @ 3:28 pm:

    ===I would imagine that such agreements are subject to FOIA.===

    Highly doubtful. Personnel matter.


  7. - Cincinnatus - Wednesday, Feb 5, 14 @ 3:29 pm:

    Riffing on WS a bit, could a severance agreement have, as part of the agreement, all allegations removed that may have precipitated the complaint?

    hisgirlfriday - always appreciate your legal analysis.


  8. - Amalia - Wednesday, Feb 5, 14 @ 3:35 pm:

    severance packages in government? do tell. about all of the ones that exist for the currently elected statewide administrations.


  9. - wordslinger - Wednesday, Feb 5, 14 @ 3:41 pm:

    From the statement the other day by Christine Svenson, the accuser in question’s lawyer:

    –Mr. Rutherford’s general counsel and in-house counsel both expressed a strong interest in keeping the matter private, and also expressed an appreciation for our willingness to do so. We were exchanging information and negotiating on a good-faith basis for days until as recently as yesterday. These types of negotiations are, in my experience, common with regard to the Treasurer’s office and have nothing to do with politics or the gubernatorial primary. –

    Key phrase here: “These types of negotiations are, in my experience, common with regard to the Treasurer’s office…”

    I’m starting to get it now. Not good for Rutherford.


  10. - wordslinger - Wednesday, Feb 5, 14 @ 3:45 pm:

    -===I would imagine that such agreements are subject to FOIA.===

    Highly doubtful. Personnel matter. –

    This is new territory for me. What’s the approp? Who signs off on the check? The comptroller cuts it based on……. what?


  11. - South of Sherman - Wednesday, Feb 5, 14 @ 3:49 pm:

    Couldn’t a severance agreement be entered into in lieu of a formal complaint?

    “If you just go quietly and don’t speak of this any more, we’ll give you x, y, and z.”

    Voila! Problem disappears, and there’s no complaint!

    Don’t know if that’s what happened here, but this does seem a little out of the ordinary.


  12. - All is fair - Wednesday, Feb 5, 14 @ 3:58 pm:

    The agreements all but certainly are subject to FOIA. First, even under the old FOIA, they would have been. Sure it’s a personnel matter, but so are any other employment contracts and those have always been subject to FOIA. There may have been parts that were redactable, but the basic agreement would have been FOIAble. New FOIA is even less favorable to employees.


  13. - Soccermom - Wednesday, Feb 5, 14 @ 3:59 pm:

    Yeah, I’m not sure where this shows up in the budget. I don’t think there’s a “x, y and z” approp line.


  14. - Christian - Wednesday, Feb 5, 14 @ 4:00 pm:

    One of the employee’s was told to resign or be fired. Agreement was written by STO and the union employee signed agreement to non disclosure of contents, There is always negotiations between two sides. By the way, there was no “pay out” either. This is a fact. Mr. Rutherford has some explaining to tax payers of Illinois.


  15. - wordslinger - Wednesday, Feb 5, 14 @ 4:02 pm:

    I think, clearly, Ms. Svenson has told us that this isn’t her first rodeo in the Treasurer’s office in regards to issues like this.

    Which lends more credence to the idea that she was hired upon recommendation of a friend (someone who had been down this road?) rather than a Rauner plot.

    As Rich has told us, Rauner was peddling the travel/shared-hotel-room story that the Sun-Times splashed all over the front page. He probably didn’t have to do anything with this one. Probably didn’t have to.

    Put me down for a double-no on the question of the day.

    But a question: If Ms. Svenson has experience in these negotiations with the Treasurer’s office, is $300K the price of poker? How can we find out?


  16. - Anonymous - Wednesday, Feb 5, 14 @ 4:04 pm:

    === I was told that the agreements had nothing to do with any sort of complaint against Rutherford. ===

    Whatever details may emerge on those situations would support the fact that is true. No complaints involved.

    There is no “there”, there on this one. Some people are quick to assume and try connecting dots that have no connection.

    There is plenty more smoke, and possibly fire, out there. But not this.


  17. - Nieva - Wednesday, Feb 5, 14 @ 4:10 pm:

    I know what happens when you assume but one would think a severance package would include money. Or maybe a layoff was arranged so the employee could draw unemployment.


  18. - too obvious - Wednesday, Feb 5, 14 @ 4:11 pm:

    This whole thing stinks.

    Svenson has made naked assertions about a “1st Amendment” claim, which would be civil. But in fact the core allegation there is criminal, i.e., political work on state time. That is a serious criminal charge, not civil.

    It is a huge problem for an officer of the court to suggest that evidence of criminal behavior will be ignored, in exchange for money.


  19. - wordslinger - Wednesday, Feb 5, 14 @ 4:11 pm:

    –By the way, there was no “pay out” either–

    No payout in a severance package? What’s there to negotiate and what’s the “package?”


  20. - Demoralized - Wednesday, Feb 5, 14 @ 4:15 pm:

    ==If Ms. Svenson has experience in these negotiations with the Treasurer’s office, is $300K the price of poker? How can we find out?==

    If it’s a personnel matter or a legal matter you can’t.


  21. - wordslinger - Wednesday, Feb 5, 14 @ 4:24 pm:

    –If it’s a personnel matter or a legal matter you can’t.–

    If you cut a check in a severance package, you can’t hide it, right? We knew Clifford at Metra got $800K for keeping his mouth shut — until he opened it, lol.


  22. - Demoralized - Wednesday, Feb 5, 14 @ 4:28 pm:

    ==If you cut a check in a severance package, you can’t hide it, right?==

    I’m not sure you can see the identity of the person for every check cut. I’m not sure what’s available on the transparency website. But even so you would have to know that there had been an agreement made.


  23. - too obvious - Wednesday, Feb 5, 14 @ 4:30 pm:

    I listened to the audio of Svenson on Proft’s radio show.

    This is crazy. A private attorney like Svenson simply cannot negotiate with a public official to make claims of criminal conduct (political work on state time) “go away.” Only law enforcement would have such authority to work out such a deal with an accused.


  24. - PoolGuy - Wednesday, Feb 5, 14 @ 4:37 pm:

    I once signed a severance agreement and by my signing the agreement and accepting the severance pay, I would not disclose any contents of the agreement to anyone, or even the existence of the agreement itself. which I am now doing here. so there was no agreement.


  25. - wordslinger - Wednesday, Feb 5, 14 @ 4:55 pm:

    –This is crazy. A private attorney like Svenson simply cannot negotiate with a public official to make claims of criminal conduct (political work on state time) “go away.”–

    Better call Saul!

    You’re right, of course. Politically, though, for Rutherford, the complaint of sexual harassment of a man is the dagger.


  26. - Anon - Wednesday, Feb 5, 14 @ 5:09 pm:

    The two accounts are compatible. There was a process used for past employees’ severance packages, but past employees didn’t have complaints lodged. Fine. No harm, no foul. But I don’t think it’s “good news” for Rutherford. I just think it’s the attorney explaining why she chose the route she did. She wasn’t trying to imply there were complaints before. Keep trying, Rich.


  27. - IbendahlLuvsJBT - Wednesday, Feb 5, 14 @ 5:13 pm:

    Sounds to me like the accuser went to Rutherford’s attorney to shake him down for $300K over sexual harassment claims, and when that didn’t work out for the seriously financially bankrupt accuser, he went with the campaigning on state time angle.


  28. - Plutocrat03 - Wednesday, Feb 5, 14 @ 5:23 pm:

    Severance agreements are common in local governments. Frequently, there are riders attached whereas neither party will speak badly of the other in exchange fore a specified amount.


  29. - wordslinger - Wednesday, Feb 5, 14 @ 5:28 pm:

    Pluto, I don’t doubt that severance agreements happen in government.

    But at some point, someone in authority has to sign off and at least that and the expense is public record?

    I hope.


  30. - All is fair - Wednesday, Feb 5, 14 @ 5:43 pm:

    The courts have already ruled that confidentiality in these agreements is not a given. They have cracked open many confidential agreements. Think of how it could be abused to get around FOIA.


  31. - Cheswick - Wednesday, Feb 5, 14 @ 5:48 pm:

    Define according to google -
    Severance (noun): the action of ending a connection or relationship.


  32. - Cheswick - Wednesday, Feb 5, 14 @ 5:49 pm:

    Perhaps the severance packages were agreements not to prosecute the former employees?


  33. - Bigtwich - Wednesday, Feb 5, 14 @ 6:02 pm:

    Situations that may give rise to criminal charges can well give rise to independent an civil action. Settling a civil case is not a problem. Threating to have criminal charges brought unless a civil case is settled is a problem.


  34. - Anonymous - Wednesday, Feb 5, 14 @ 6:19 pm:

    =There is plenty more smoke, and possibly fire, out there. But not this. =

    So, since Anonymous 4:04 seems to have some insider info pertaining to the agreement, perhaps s/he can explain the practice in the Treasurer’s office.

    In the private sector, complaints are NEVER part of a severance agreement.

    In the private sector, NDAs are usually signed up front and as you’re assigned to types of projects where an additional layer of “confidentiality” or security is desired.

    Severance agreements usually discuss termination dates pertaining to employment, benefits, etc. and any severance amounts that will be provided.

    Sometimes, the severance pay and the benefits beyond the termination date are directly tied into a “you will not sue.”

    Therefore, I guess I fail to understand why someone would be looking for “complaints” in a severance agreement, or looking for those who might have signed a previous agreement to now sue.


  35. - Anonymous - Wednesday, Feb 5, 14 @ 6:26 pm:

    And I believe that there is a difference between not suing and testifying as a witness. And that in some cases, NDAs and/or severance agreements have been challenged.


  36. - steve schnorf - Wednesday, Feb 5, 14 @ 6:32 pm:

    In my experience, the use of “severance agreements” was extremely limited and virtually always involved around agreeing to allow an employee to resign rather than be discharged, and frequently didn’t result in anything except the resignation being reduced to writing


  37. - steve schnorf - Wednesday, Feb 5, 14 @ 6:33 pm:

    Of course, my experience was also a long time ago


  38. - Anonymous - Wednesday, Feb 5, 14 @ 6:38 pm:

    Maybe sloppy language is being used, but severance typically means consideration is given on both sides of the equation. You leaving is often the consideration sought by the employer (for whatever reason) and money is most often the consideration for the employee. It happens often in the private sector, but as noted by many here it’s not something one associates with public sector employment. And certainly if there was an expenditure of public funds that would be public information. I am quite curious in what cases any such deal can be legally done for a public sector employee. One might consider an early-out deal passed by the GA as a form of severance but does an individual constitutional officer in Illinois have authority to enter into such a deal? I don’t know but some state’s specifically prohibit such deals, and understandably so.


  39. - Anonymous - Wednesday, Feb 5, 14 @ 6:53 pm:

    I get it now. Thank you for the information, Anonymous 6:38.


  40. - Pot calling kettle - Wednesday, Feb 5, 14 @ 7:39 pm:

    Steve S cites the type of severe agreement I have seen. It’s typically done because the employee has done something marginally wrong, the employer does not want to spend the time and money to discipline and fire, the employee does not want to be fired and is willing to go with two weeks pay ( or something similar) and the employer agrees not to give negative references.

    It looks like the accusers atty is trying to imply that two were many and intended to hide Dan’s actions rather than the employees’.


  41. - Arthur Andersen - Wednesday, Feb 5, 14 @ 7:46 pm:

    So, are we saying that Swenson misspoke about $300k payouts being common in the Treasurer’s Office, or we still don’t know yet?


  42. - wordslinger - Wednesday, Feb 5, 14 @ 7:47 pm:

    Schnorf, Pot, thanks a lot.

    I can’t figure out how this $300K deal could even be possible.


  43. - Anonymous - Wednesday, Feb 5, 14 @ 7:52 pm:

    That’s interesting. Government severance agreements promise not to give negative references?


  44. - wordslinger - Wednesday, Feb 5, 14 @ 7:52 pm:

    AA, I’m on that line, too.

    It was a written statement from her, I figure the words are supposed to communicate something to someone.


  45. - Anonymous - Wednesday, Feb 5, 14 @ 7:56 pm:

    I know that there’s been a lot of talk about how the 300K would be paid out, but I never interpreted what I’d read as the amount being the “standard.” I thought the reference was to severance agreements and that the 300K was being negotiated as part of one. Is that not right? Now I feel like I have to go back to re-read what had been said.


  46. - Anonymous - Wednesday, Feb 5, 14 @ 7:57 pm:

    And I should clarify that the “talk” I’m referring to is I believe between word and AA on this blog.


  47. - Pot calling kettle - Wednesday, Feb 5, 14 @ 8:41 pm:

    ==Government severance agreements promise not to give negative references?==

    Kind of a no-fault severance. Employer’s reference would be a simple confirmation of the dates of employment, neither positive nor negative. This is the kind of thing subsequent employers don’t like because they can end up hiring a bad apple and not know it.


  48. - Anonymous - Wednesday, Feb 5, 14 @ 9:21 pm:

    = This is the kind of thing subsequent employers don’t like because they can end up hiring a bad apple and not know it. =

    Really? I believe primarily to avoid lawsuits, the private sector only provides date of employment and position for ALL employees and it’s usually done through a service.


  49. - Oneman - Wednesday, Feb 5, 14 @ 9:25 pm:

    Generally in a private sector severance agreement there is something about what party may say about each other (reason for termination) and there is some compensation and an agreement not to sue.

    Someone went to court one time to argue that a severance agreement was basically a lawsuit settlement and therefore not taxable (or differently taxable, he lost anyway)

    When I got one as part of a mass layoff, I got a set amount based off my time of service (It was like 2 or 3 weeks per year I was with the company, the severance policy was defined in writing in the employee handbook) I also had any amounts I owed (about $8,000 or more) from the continuing ed benefit forgiven.

    When I signed the agreement I also agreed not to sue for any sort of discrimination, I think I also agreed to some other things.

    I have worked at places where they had agreements in part after major company changes (like a takeover) where they explained the severance policy as well as identified key personnel who would receive bonus payments for staying past some key dates (walked away from one of those once).

    Also have worked at places where unless you were terminated for an HR like cause, you were given severance and a reason was agreed upon (I have even worked places where they were rather generous with people terminated for job performance reasons).

    However, not sure how this works in government.


  50. - steve schnorf - Wednesday, Feb 5, 14 @ 9:37 pm:

    Large layoffs in state government involve, almost by definition, many union employees. That leads to “impact” bargaining which normally does result in a type of severance agreement, with consideration being provided. The sorts of consideration I’ve seen normally might include such things as ability to claim jobs outside the employees worksite, extension of health coverage for 6 months, that sort of thing.

    The only things I’ve ever seen that involve any significant amounts of money (and they were very rare) either involved formal lawsuits or situations where employees, for whatever reason, had been suspended for longer than normal periods of time without pay, and they were allowed to return to the payroll with a more recent resignation date, thereby picking up a few or several months pay in return for the resignation.


  51. - wordslinger - Wednesday, Feb 5, 14 @ 9:48 pm:

    Schnorf, that’s why I’m so hung up on the “300K” to “walk away and keep it under wraps.”

    Can you pull that off in state government? Ms. Svenson said she had “experience” in such matters.


  52. - steve schnorf - Wednesday, Feb 5, 14 @ 9:55 pm:

    word, I suppose there could have been some I didn’t know about, but I can’t remember ever hearing about anything involving cash payouts that weren’t the result of formally negotiated settlements of filed lawsuits. Like you and others, I can’t even think of how you would pay it, and out of what line item. But, as I said, I’ve been gone a long time now.


  53. - Pot calling kettle - Wednesday, Feb 5, 14 @ 10:05 pm:

    If you read Ms. Svenson’s quotes, she implies that this kind of thing was going on but she does not say that she had 1st hand knowledge. She uses the word “may” quite a bit. She is encouraging people to read between the lines, but it is not at all clear if there is anything actually there.

    I’m very suspicious when she uses blanket statements like “Their standard M.O. (mode of operation) is to work out standard severance agreements.That’s what they do, and they’ve been doing that the last two or three years with employees.” Especially when it appears there were actually only two agreements and its unlikely she knows what the contents of those agreements were. Her statement may be accurate, but it seems to be very misleading.

    It is possible that the employee she represents was aware of the other severance agreements, but was mistaken about the cause and contents. Not an unusual situation. They then approached Rutherford with an offer based on assumptions that were incorrect. Rutherford then assumes that its a ploy by Rauner (whose people are shopping around the hotel story), rejects what he sees as a trap, and goes public. Seems plausible…


  54. - hisgirlfriday - Wednesday, Feb 5, 14 @ 10:19 pm:

    @wordslinger:

    You may be reading too much into Svenson’s “in my experience” statement IMO.

    If Svenson is constantly representing employees of the treasurer’s office against Rutherford, I would think that would undercut her claims that none of what she is doing is motivated toward personal/political animus toward Rutherford.


  55. - Anonymous - Wednesday, Feb 5, 14 @ 10:24 pm:

    So how do you explain Corboy’s office, the work they do, who they represent, and who they sue?


  56. - All is fair - Wednesday, Feb 5, 14 @ 10:48 pm:

    nice work pot. all of your ideas are plausible and may be very close to the truth.


  57. - Anonymous - Thursday, Feb 6, 14 @ 1:48 am:

    On a lighter note, I just watched an NBC5 report (Ahern) and Dillard delivered a comment that had me laughing for about five minutes. I’m sure most of it was the way he delivered it and the way they clipped it, but I’m pretty sure it’s going down as a classic.


  58. - woodchuck - Thursday, Feb 6, 14 @ 1:56 am:

    For what some refer to as a “left-leaning” blog, I have to say the intensity and intellectual logic of those trying to understand and potentially refute some of this on the Rutherford issue would lend credence to the notion that this is not a left-leaning blog, but rather the most intellectually stimulating conversation on all things state government. Even disagreements here are mostly respectful, even if not down right funny and “bless your heart” kind of funny. It’s often the highlight of my day, intellectually at least - to read and think through the logic of the commenters on here who have so much skin in the game and care and concern about the future of our state. My thanks to all of you, even those I may disagree with occasionally. This group collectively challenges us to challenge our thinking and that’s a good thing.


  59. - Anonymous - Thursday, Feb 6, 14 @ 3:33 am:

    =Even disagreements here are mostly respectful, even if not down right funny and “bless your heart” kind of funny.=

    You’re either an old-timer who’s returned and needs to look around, or you’re new and have an odd sense of humor.

    On that note, “Bless Your Heart” to Oswego Willy and word today…”dudes.”


  60. - Oswego Willy - Thursday, Feb 6, 14 @ 5:30 am:

    - woodchuck -, you “get it”, good on you.

    ” - Anonymous - “, you “get what you give”, so…


  61. - Anonymous - Thursday, Feb 6, 14 @ 7:27 am:

    At what point is an employee responsible for their own actions? If they perform an illegal activity during their work hours in order to move up with a politician into a higher office, how could they claim to not know it is illegal? They are doing the work to feather their own nest, not the elected pols. Anyone doing campaign work during state employment knows it is an illegal activity.


Sorry, comments for this post are now closed.


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