No charges for ex-business partner, Deegan

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Sarpy County Attorney Lee Polikov has decided not to bring criminal charges against former Bellevue schools Superintendent John Deegan and several other district officials.

"If we had big charges to file, we would have filed by now," Polikov told The World-Herald last week.

Polikov declined to say when he reached his decision, suggesting it was months ago. The Nebraska State Patrol launched a probe last April and presented Polikov with its completed report in early August.

He acknowledged last week that the State Patrol had recommended charges involving political coercion or official misconduct against five Bellevue school officials.

"In this case, there were just a lot of obstacles to overcome for us to be able to prove (a crime) beyond a reasonable doubt," Polikov said.

Polikov said he has not closed the criminal probe because he still wants to review the financial records of the nonprofit group, the Military Impacted Schools Association, that Deegan operated out of the Bellevue school offices.

For months Polikov oversaw an attempt to help the State Patrol and State Auditor Mike Foley gain access to that group's books. In December, a Sarpy County judge rejected Polikov's subpoena seeking the records.

Personal and business connections between Polikov and Deegan raise questions about whether Polikov should have sought a special prosecutor to handle the case.

Deegan and Polikov were part of a real-estate development group, formed in 1985, called Wayne Street Partners. Deegan, who later left the partnership, was serving on the Bellevue City Council at the time and Polikov was the chief Sarpy County deputy sheriff.

The two also have connections through attorney Patrick Sullivan.

Sullivan has served as treasurer for several of Polikov's political campaigns. Sullivan also has been the personal attorney for Deegan and several other Bellevue school officials involved in the State Patrol probe.

Sullivan is also the Bellevue school district's attorney and was the registered agent for the Military Impacted Schools Association until last year.

Stephen Sieberson, a Creighton University law professor, said Polikov should have recused himself once the Nebraska State Patrol finished its probe.

"Conflicts of interest are always nuances. It's hard to find black-and-white rules to absolutely cover something in every situation," Sieberson said. "If it does not pass the smell test to the ordinary person, then it's entirely likely that many others would see a conflict of interest or some other ethical violation."

Nebraska doesn't have a specific code of ethics for prosecutors.

Polikov disagreed that he had any conflicts of interest in the Bellevue schools probe.

He said his relationship with Sullivan had no impact on his impartiality, nor did his past social and business relationships with Deegan. He said he and Deegan have not been business partners for 20 years.

"We make decisions as we go," Polikov said. "I am sure there will be some people who think there must be a conflict, of course, but we didn't see the necessity (to seek a special prosecutor). I didn't see it as an issue."

Despite the patrol's recommendation, Polikov declined to file charges involving political coercion.

He concluded the charge could have boiled down to a "he said, she said" situation in court. Polikov said he did not want to embroil the criminal justice system "with personality and political conflicts."

Under state law, it is a felony for a person in a position of authority to coerce employees in voting or other political action or to threaten to discharge them because of their political action.

"What one person thinks is coercion, other people will think of as freedom of speech, and I anticipate that as a possible defense," Polikov said.

Criminal prosecutions involving political coercion are extremely rare in Nebraska and elsewhere, said Gary Plank, a retired Nebraska State Patrol investigator, now an assistant professor in forensic science at Nebraska Wesleyan University.

Plank recalled investigating only one case involving alleged voter fraud during his 28-year career with the State Patrol.

Optimally, he said, a prosecutor would be able to show that someone was forced to give money by someone in authority and subsequently threatened with punishment for resisting.

"Otherwise, it might be a little more circumstantial," Plank said.

However, he said, if employees were "willing to come forward who said they were forced to give, and they probably felt it was beneficial to their continued employment, to me that would be a pretty convincing case. ... If they all perceived the same thing, it would make a solid case."

During its investigation, the patrol interviewed about 35 school officials, business owners and past and present school board members and obtained evidence of campaign contributions.

Deegan was accused of directing political contributions to certain Bellevue school board candidates in 2004, 2006 and 2008. According to the patrol, principals and other school administrators were told how much they should contribute to Deegan's preferred candidates.

The State Patrol forwarded information to Polikov about the 2008 election. The statute of limitations had expired for the earlier elections.

"It's not a simple case. In this case there are a lot of suspicions and some emotions and hard feelings," Polikov said. "I really think we need something pretty clear, from someone saying, 'I was made to do something against my will. I was disciplined, terminated or transferred.'

"It takes a lot to get to a criminal charge."

Bellevue resident Cindy Copich, who lost her 2008 bid for the school board, said Deegan's actions were inappropriate. Copich, who wasn't on the preferred slate for three seats, finished fourth out of five candidates. Deegan's slate won.

"I don't think the money bought any votes, but it put other people at a disadvantage in their campaigning for financing of our own campaigns," Copich said.

Polikov also declined to pursue charges of official misconduct, rejecting the State Patrol's recommendation.

The patrol uncovered several potential competitive bidding irregularities in which Deegan and Assistant Superintendent Doug Townsend appeared to bypass the school board's rules.

Townsend has maintained that Deegan ordered him to sign many of the contracts against his wishes.

Deegan's forced resignation in December 2010 was fueled by Townsend's refusal to sign off on a heating, air-conditioning and ventilation project.

Board policy requires advertising for bids for construction, remodeling, repair or site improvements if the complete project exceeds $40,000.

Deegan wanted Townsend to sign a purchase order for $250,000 for work at Bellevue West High School. After Townsend refused, Deegan signed it.

The May 14, 2010, purchase order authorized repairs by Apollo Heating and Air Conditioning in Bellevue, owned by Tom Yeoman, a friend of Deegan's.

Deegan then broke the contract into about a dozen separate units, ranging from $13,000 to $39,000 per unit. The Bellevue school board hadn't authorized any of the repairs.

Last week Polikov told state lawmakers it was too hard to bring charges of official misconduct without a more structured framework for school purchasing. He was testifying in support of Legislative Bill 1168, which seeks new statewide standards in school district purchasing.

Two Bellevue school board members disagreed that such legal changes are needed.

"Determining whether or not there is a criminal violation, that needs to be made by the county attorney," said Nina Wolford. "I don't think he needs more laws in order to determine that."

Board President John Hansen agreed, saying the board immediately sought an outside probe of Deegan after learning about several possible improprieties involving the contract letting.

"I don't know what we as a school board could have done differently," Hansen said.

Nebraska State Patrol Lt. Scott Kracl said his agency uncovered plenty of evidence that warranted charges. He acknowledged, however, that prosecutors have discretion over whether to file charges, and there are many times when prosecutors decline.

"We believed we had some good leads here that obviously needed to be pursued," Kracl said. "It is up to them to decide. They're the ones who have to file the charges and defend it in court."

The statute of limitations will expire Wednesday on the last of the allegations involving official misconduct. It has already lapsed on about 10 potential bidding irregularities.

"As a criminal case, this has not been easy," Polikov said.

World-Herald staff writer Paul Hammel contributed to this report.

Contact the writer:
402-444-1056, john.ferak@owh.com

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