Lawsuit alleges retaliation by West

The city of Spokane is being sued by its former retirement director who alleges he was fired two years ago after refusing to take steps to substantially increase state retirement benefits for then-Mayor Jim West and two of his assistants.

Daniel M. Daniels alleges he was fired by West after blocking the mayor’s attempt to use his $138,000 annual city salary as the basis for his state retirement benefits, instead of the approximate $35,000 a year he was earning in his final years as a state lawmaker.

“It would have boosted the amount of his retirement tremendously, probably three times or more,” said Spokane attorney William J. Powell, who filed Daniels’ “wrongful discharge and retaliation” lawsuit on Wednesday in Superior Court.

The suit, naming only the city of Spokane as a defendant, has been assigned to Judge Kathleen O’Connor.

The lawsuit was filed after the city rejected Daniels’ June 2006 claim for $750,000 in damages.

The suit seeks damages for economic loss, emotional distress and attorney fees. Those total damages, if proven at trial, could exceed the amount of the claim filed with the city, Powell said.

After Daniels was fired by West on Aug. 24, 2004, changes were made that allowed the Spokane mayor to use the “portability” of his city salary in the calculation of his state retirement under the PERS Plan 3 system. Without the city salary to add to the equation, West’s full pension for 17 years of work would have been just $525 a month because he had chosen to defer some state retirement payments to a 401(k).

In addition to his state pension, West received a $459.96 monthly pension from the Spokane Employees Retirement System for his two years as Spokane’s mayor, said city spokeswoman Marlene Feist. West “was qualified to vest earlier because he was already vested in the state system,” Feist said.

West replaced Daniels with Leo Griffin, the city’s current retirement director. He referred reporters’ calls Friday to Feist.

The city’s attorneys just received the lawsuit, and the city wasn’t prepared to respond to the allegations, Feist said.

Some Daniels loyalists reacted strongly to his firing two years ago, according to e-mails obtained last week by The Spokesman-Review as part of a public records request.

Nancy C. Schneider, who was a city employee at the time, fired off an e-mail to the late mayor on September 16, 2004, after Daniels was fired.

“I was shocked and totally disappointed that you would let someone like Dan Daniels go. He has been with the city for 18 years and has done nothing but excellent work with our retirement funds,” Schneider said.

Schneider told West she hoped the city retirement board “has a backbone and fights you on the firing of Dan Daniels and any involvement you might want with our retirement.”

West replied three days later.

“Retirement funds are sacred and I consider them so,” West said. “As you know the removal of Dan Daniels had nothing to do with his technical administration of the fund but rather his administrative style. It appears someone is spreading and fueling rumors to cause panic among our employees in hopes that will result in Mr. Daniels being rehired,” West said. He called the rumors “reprehensible.”

“I had heard many concerns about what Mr. West was up to,” Schneider said Friday when reached for comment in South Dakota.

Daniels, who has been unemployed since losing his city job, declined public comment on Friday and referred questions to his attorney.

The city’s former retirement director refused West’s request to blend his state and city retirements and those of the mayor’s assistants, Cody George and Brian Murray, who had worked with West when he served in the state Senate, Powell said.

“Daniel’s decision not to do it was based on legal opinions from the city attorney and the state retirement board,” Powell said. “He was simply following the legal advice he had.”

After West became mayor in January 2004, “several requests” were made to Daniels “to initiate a transfer of the retirement account of Mayor West and two of his assistants from the (state) Public Employee Retirement System Plan 3 to the Spokane Employees Retirement System,” the lawsuit says.

Daniels’ suit claims his termination “was in retaliation for his refusal to perform an illegal act of facilitating portability of the accounts” that would have been “in violation of the public policy of the state of Washington.”

After his termination, Daniels was placed on a city Civil Service transfer, voluntary demotion and layoff lists for the positions of Accountant II and Accountant I, positions he had previously held.

On April 26, 2005, the City Accounting Department had an opening for an Accountant II, and Daniels was the only certified applicant on the Civil Service Commission’s eligibility list, the suit says.

But Daniels ultimately was passed over for the city job after Michael Shea, the city’s human resources director, wrote a letter to the Civil Service Commission “falsely accusing Daniels of misconduct during his supervision of the city retirement system,” the suit adds.

To avoid Daniels’ appeal before the Civil Service Commission, the city withdrew its job posting for the Accountant II position on July 5, 2005, the suit alleges.

Shea, reached for comment on Friday, said he had not seen the lawsuit and couldn’t comment even if he had seen it.

According to state pension documents, West was a member of at least three public retirement systems from his employment as a law enforcement officer in the 1970s, a state lawmaker for 17 years and as Spokane’s mayor from January 2004 until December 2005, when he was recalled by voters in an abuse-of-power scandal. He died in July after a lengthy battle with cancer.