At a meeting of the city’s police commission last week Mayor James Sottile said that allegations of payroll fraud and theft against KPD Detective Lt. Tim Matthews could lead to further restrictions on off-duty employment by city police officers. Sottile added that the city may also reconsider its participation in the county-wide Ulster Regional Gang Enforcement Narcotics Team.

Meanwhile, in his first extensive public comments about the Matthews affair, Kingston City School District Gerard Gretzinger said that he was surprised and saddened by the allegations, but adamantly rejected claims that he ignored warning signs of potential problems which arose two years before state auditors uncovered the alleged double dipping scam.

Gretzinger’s remarks came at a Wednesday evening press conference in advance of a special meeting of the Kingston Board of Education where Gretzinger said he would outline recommendations to tighten scrutiny of pay vouchers for the 12 off-duty police officers who moonlight as school security guards. The press conference comes more than a month after Matthews was placed on administrative leave after auditors from the state comptroller’s office informed city officials that the veteran detective had billed the police department for overtime at the same time he claimed to be working security at the school.

State Comptroller Thomas DiNapoli alleges that Matthews “double dipped” on 16 occasions for a total of 57 hours between June 2009 and July 2010, the period covered by the audit.

Gretzinger Wednesday repeated his earlier claim that he had no recollection of a meeting with then-Assistant Superintendent for Business Robert Pritchard to discuss Pritchard’s concerns about Matthews’ time sheets. On two occasions during the 2008-09 school year, Pritchard instructed staff to deduct hours from Matthews’ paycheck because he had billed for working night security at the high school while simultaneously claiming hours spent working at school athletic events. Pritchard marked the timesheets with the notation “Deduct … due to double dip.”

Pritchard who is now superintendent of the Mexico New York Consolidated School District said that he recalled meeting with Gretzinger and Matthews in early 2009 after Gretzinger called him to his office to explain why Matthews’ time sheets had been rejected.

“[The meeting with Pritchard] is not one that I recall,” said Gretzinger. “I made that statement before and I stick to that.”

Gretzinger added that Pritchard’s notations, and the fact that the disputed hours were never paid shows that there was adequate oversight of Matthews’ work at the school.

“It was caught as a discrepancy or bookkeeping error (on the part of) Lt. Matthews,” Gretzinger said. “That only indicates that the error was caught by Mr. Pritchard and was never paid.”

Gretzinger added that he had placed his trust in Matthews as a respected member of the law enforcement community and gave him the job of scheduling the school security detail, in part, because Matthews’ was familiar with the officers’ schedules at the police department.

“I had complete trust in Detective Lt. Matthews, I had trust that he was the best person to schedule (the security detail),” said Gretzinger. “I never had any reason to doubt him.”

Gretzinger pointed out that school district staff had no access to police department pay records and therefore, had no way to know whether Matthews was billing both agencies for simultaneous hours. But, while Gretzinger said that he had no warning of the alleged fraud or reason to doubt Matthews’ integrity, he admitted that as the district’s chief executive, he bore a measure of responsibility.

“I take full responsibility for any errors that were made in the past and I am implementing new procedures to ensure that the same mistakes that were made in the past to not occur again,” said Gretzinger. “The district has nothing to hide, nor is anybody trying to hide.”

Changes coming, says mayor

Sottile’s comments come as the investigation into the activities of Matthews widens to include URGENT where Matthews served as co-commander from the unit’s inception in 2007 until 2009. Last week, FBI agents served federal grand jury subpoenas at City Hall, the Ulster County sheriff’s office and the County Comptroller’s Office seeking records related to URGENT that Sottile described as “massively voluminous.”

At the Feb. 17 police commission meeting, Sottile said that he had no knowledge of alleged misdeeds by URGENT, but added that the FBI investigation was cause for concern.

“We need to discuss whether and to what level do we continue to operate within URGENT if there turn out to be issues there,” said Sottile.

The city currently contributes four veteran narcotics cops to the task force which was formed in 2007 to draw together law enforcement resources from local, county and federal agencies in a single unit dedicated to fighting drug and gang crime. Since its inception, the task force has drawn near-universal praise from elected officials and become a mainstay of law enforcement in the county. In addition to ongoing undercover drug stings, the task force, which maintains detailed intelligence files on known criminals and a far-reaching web of informants, assists other agencies in investigations of robberies, burglaries, assaults and other crimes.

While Sottile said that it was too soon to make any decisions regarding the city’s participation in URGENT, the allegations against Matthews are likely to result in changes in how the city handles overtime and off-duty employment for police officers.

According to a report from the state Comptroller’s Office, which uncovered the alleged payroll fraud, Matthews earned $58,694 working as a security officer at Kingston High School between June 2009 and July 2010, the period covered by the audit. On 16 occasions, Matthews claimed overtime pay from the police department at the same time he was being paid by the school district, the report found. A review of Matthews school district payroll records between 2008 and 2010 by the Kingston Times found that Matthews routinely put in 50-hour weeks at the high school in addition to his duties as chief of the city’s detective division and, during 2008, co-commander of URGENT. Twelve other police officers were employed as security guards by the Kingston City School District. But Matthews, who made up schedules for school security, was by far the top earner among the security detail and the only member accused of payroll fraud.

The long hours appear to violate city regulations for off-duty employment by police officers. According to Barry Rell, president of the Kingston PBA, the rules state that officers are limited to 20 hours a week of off-duty employment, provided the work does not interfere with their police duties (the regulations also bar cops from working at alcohol serving establishments or for other police departments). But Rell, who estimated that 75 percent of Kingston cops either own businesses or hold second jobs said that the limitation on hours had never been enforced.

“Twenty hours has always been the rule of thumb,” said Rell. “But I have to think that some guys work a little bit more than that. As long as it doesn’t affect your ability to do your job, it’s never been an issue.”

That could change following the allegations against Matthews. Sottile, who at the police commission meeting said that he was unclear on the rules for police moonlighting, said that he planned to consult with city labor attorneys to discuss further limitations.

“It’s something that we need to look at,” said Sottile. “I need to speak to our attorneys about our rights with regard to restricting outside employment.”

But Rell said that it was unfair, and unnecessary, to institute a wide-ranging crackdown on moonlighting based on allegations involving a single officer.

“The issue at hand is pertaining to one individual,” said Rell. “I don’t think that you need to address everybody in the department because of one person’s supposed actions.”

The state comptroller’s report also pointed out flaws in the city’s administration of overtime, finding that Matthews was allowed to authorize his own overtime at the police department and did not record starting and ending times for his shifts. Sottile and other city officials dispute the finding. Beginning in 2009 (before the time period covered by the audit) the Common Council moved to limit overtime by moving most of the department’s discretionary overtime budget into the city’s contingency fund and requiring Police Chief Gerald Keller to request additional funds through the council’s finance committee. The new system also required Deputy Chief John Wallace to pre-approve all overtime requests. Under the new system, Sottile said, Wallace would have to decide whether detectives would be called out to investigate cases on overtime or wait until their regular shifts to follow up on the work of patrol officers who respond to crimes, take reports and make referrals to the detective division where appropriate.

Members of the council said that the system had worked, significantly reducing money spent on police overtime. But Common Council Finance Committee Chairman Charlie Landi (D-Ward 3) said he did not know why the new rules failed to thwart Matthews’ alleged double dipping.

“How this slipped through the cracks, I don’t know. Every time we talked to the chief and the deputy chief, they seemed to be on top of it,” said Landi. “Honestly, I think that there was an element of trust given to [Matthews] and that trust was breached.”

Dismissal ‘a possibility’

Matthews was placed on administrative leave on Jan. 14. Two weeks later, he was suspended without pay. At the police commission meeting, Sottile said that commissioners would discuss further possible disciplinary action against Matthews during an executive session. Sottile declined to specify the actions under consideration but responded to a reporter’s question by acknowledging that Matthews’ dismissal from the force was “a possibility.” Any disciplinary action against Matthews’ would need to be vetted by labor attorneys to ensure that the departmental charges could be upheld under state law and the city’s labor agreement with the PBA.