Former employee sues Rutherford for sexual harassment, political coercion

Published 02/10 2014 03:10PM

Updated 02/11 2014 10:18AM

Latest: 10:02 pm
ILLINOIS -- State Treasurer Dan Rutherford is doing his best to debunk serious claims against him. He says he's never sexually harassed any member of his staff. All of this is detailed in a federal lawsuit filed by one employee Monday afternoon. He also accuses the treasurer of making him do political work on state time. As WCIA-3's Steve Staeger shows us, Rutherford has a strong case against the allegations.

They're laid out in a 15 page complaint filed in federal court. The plaintiff is the Treasurer's former director of community affairs, Edmund Michalowski. The defendants are Treasurer Dan Rutherford and his chief of staff, Kyle Ham.

Among Michalowski's claims are an overnight retreat to Rutherford's Chenoa home in 2011. Michalowski says he was staying in the guest room and, in the middle of the night, Rutherford came in and touched him inappropriately. But, just hours after the lawsuit was filed, Rutherford responded with a travel voucher and email showing Michalowski didn't spend the night. In fact, it shows him home in Chicago by 4.

Michalowski alleges other sexual advances by the Treasurer, but Rutherford denies them all. Then there's this. Michalowski claims another staffer in the Treasurer's office sent him a text message saying the Treasurer requested he wear a tank top to an event. But, Rutherford released the full text conversation showing it was a jovial back-and-forth.

The other staffer: "No shirt and tie required tomorrow. Business casual fine."

Michalowski: "What about my toupee? Should I bring my business casual one too?"

The other staffer: "The Treasurer specifically asks that you wear a tank top. Totally your decision if you want."

Michalowski: "Sounds like a plan."

Rutherford say she will release more of his internal investigation into the matter soon.
Update: 4:18 pm
Rutherford's office released the following statement:

Edmund Michalowski filed a federal lawsuit today against Treasurer Dan Rutherford and Chief of Staff Kyle Ham. While an independent investigation is on-going, the Illinois State Treasurer’s Office conducted an initial review of documents Michalowski claims support these allegations, as well as its own records, and preliminarily found there was no merit.

The Allegations Are False.

To our knowledge, there are no witnesses to three alleged incidents of harassment—one of which allegedly took place at the treasurer’s home on April 2, 2011, and the other two at events outside the office in August 2011 and August 2012. The alleged incidents in December 2013 were only raised in the complaint filed today, and the treasurer’s office had not been previously informed of any harassment in 2013. In any event, Treasurer Rutherford strongly denies any inappropriate conduct, regardless of the date.

State records reviewed by the treasurer’s office bear no resemblance to Michalowski’s allegations. For instance, Michalowski claims that he was harassed at “an overnight retreat” at the Treasurer’s home in Chenoa on April 2, 2011. However, a travel voucher submitted and signed by Michalowski for the date of April 2, 2011 shows he traveled home from Pontiac (not Chenoa) at 2 in the afternoon. Most importantly, contrary to his claim that he planned to stay the night and that he was harassed in the evening, the voucher indicates Michalowski returned to his residence in Chicago by 4 in the afternoon that day. An email written by Michalowski to another co-worker confirms that he traveled to Pontiac and returned home the same day.

Details such as a July 24, 2011 text from a staffer that the treasurer asked that Michalowski wear a “tank top” are deliberately taken out of context. Michalowski provided to the treasurer’s office what he claims to be the entire string of texts, which shows that Michalowski was engaging in light-hearted conversation with the staffer about appropriate dress.

Further, contrary to his claims, Michalowski did not report any incidents of misconduct to his supervisor or through the Equal Employment Opportunity process, nor did anyone else report any type of misconduct on claims that are 2 and 3 years old. Chief of Staff Kyle Ham vehemently denies that any report was made to him about this conduct.

No treasurer’s office employee in this administration has been pressured or otherwise coerced into performing political activity. Employees such as Michalowski have volunteered to perform political activity on their own time and using their own resources.

Michalowski has never suffered any demotion or decrease in salary, which was substantial; his $99,000 annual salary placed him among the six highest salaries at the treasurer’s office. He was never promised any promotion or position. The text messages produced to our office by Michalowski show continual civility, camaraderie, appreciation, and support from the treasurer and other co-workers for Michalowski and from Michalowski to the treasurer and other co-workers. This is true both pre- and post- the alleged harassment.

Participation in politics is not a factor in advancement at the treasurer’s office. Of 55 non-union employees receiving salary adjustments in the Rutherford administration, 71 percent were employed prior to the Rutherford administration, with many being long-time employees.

The Allegations Are Untimely.

The alleged incidents of harassment started in 2011 and 2012, well beyond the statutes of limitations provided under state law and federal law for Equal Employment Opportunity claims. Only today does Michalowski raise incidents occurring in 2013 as a way to make these allegations seem timely. Like the timing of the claims, this is very convenient for Michalowski.

Likewise, the political activity is alleged to have primarily occurred in 2011 and 2012. Michalowski, like every Illinois State Treasurer’s Office employee, receives Ethics Training annually, and employees are instructed to report any allegations of prohibited political activity or other misconduct to the Office of Executive Inspector General. However, there is a one-year statute of limitations for the Office of Executive Inspector General to open investigations. These allegations were never reported to the Executive Inspector General at the time.

The Timing of the Allegations Is Calculated.

These false allegations were only brought to light on the eve of a political debate on January 23, 2014, and six weeks before a contested primary election. Attorney Christine Svenson accompanied these allegations with a demand of $300,000 to keep these damaging allegations “under wraps.” Because of the nature of the allegations, the treasurer has been unable to publicly discuss them. The treasurer’s office has taken great care not to reveal the identity of Michalowski.

Public records show that Michalowski is in the midst of an on-going bankruptcy proceeding in which Michalowski is delinquent in making payments as of May 2013, with a hearing scheduled on the delinquency for January 23, 2014—the date his attorney first contacted the Illinois State Treasurer’s Office. His home was foreclosed upon in April 2013. In October 2013, Michalowski filed for divorce.

The treasurer’s office will release a summary of the findings of its independent investigator, and will turn over the entire investigative file to its Executive Inspector General at the conclusion of the independent investigation. The treasurer’s office remains committed to providing a workplace that is free of any misconduct.

Original: 3:10 pm
CHICAGO -- A former employee in State Treasurer Dan Rutherford's office filed a federal lawsuit Monday, accusing the treasurer of forcing him to do political work on state time and sexually harassing him.

The employee, Edmund Michalowski, worked as a Deputy Director of Community Affairs and Director of Community Affairs. He resigned his job last week.

The 15-page complaint accuses Rutherford and his chief-of-staff, Kyle Ham, of forcing Michalowski to use his long list of political contacts to solicit donations for Rutherford's campaign and Mitt Romney's campaign for President. Rutherford led Romney's campaign committee in Illinois.

The suit also accuses Rutherford of sexual misconduct. It details an incident in 2011 when Michalowski allegedly drove Rutherford to an overnight retreat at Rutherford's home in Chenoa. Michalowski claims other staffers were supposed to be there, but weren't. According to the lawsuit, after dinner, Michalowski went to a guest bedroom in Rutherford's home. He says Rutherford came in that night and "grabbed at (his) genitals." According to the lawsuit, Michalowski pushed Rutherford off, gathered his belongings and left.

The lawsuit also claims that when Michalowski reported the incident to Ham, Ham said "at least we have job security," and indicated something similar had happened to him.  

The suit also alleges that in August of 2011, while in Springfield for Republican Day at the State Fair, Michalowski was talking to a group of women at a local bar. The suit says Rutherford circled the table complaining that Michalowski wasn't talking to him. It goes on to say that while Michalowski was leaving the bar with the group of women, Rutherford pulled him aside and said, “if you go home with me, you can have anything you want in the office.”

The lawsuit also alleges that at the Republican National Convention in Tampa in 2012 after a reception at the delegation's hotel, Rutherford grabbed Michalowski's arm and invited him to his room. When Michalowski refused, the lawsuit claims Rutherford said, "you just said 'no' to the treasurer."

Rutherford tweeted Monday that he would address what he called "false allegations" during a 4:30 p.m. news conference in Chicago.

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