Multi-year investigation leads to arrest of Armstrong officials
Tuesday, Feb 16 update: Former Armstrong City Clerk Mary “Kate” Staton was charged with one count of theft in the third degree and one count of tampering with records, both aggravated misdemeanors, in a two-count trial information approved by the Emmet County District Court.
Staton surrendered herself at the Emmet County Courthouse on Feb. 16, 2021, and appeared before the magistrate that same date.
This charge also stems from a multi-year investigation led by the Emmet County Sheriff’s Office, with assistance from the Division of Criminal Investigation and following a special investigation by the Auditor of State’s Office.
Sunday, Feb. 14 update: Armstrong Police Chief Craig Merrill was arrested in Martin County, Minnesota Sheriff’s office on Saturday evening, Feb. 13 and booked around 8 p.m. Bail was pending as of Sunday afternoon. Merrill was listed as “fugitive from justice in other state” and awaits extradition to Iowa.
Friday, February 12, the Emmet County Sheriff issued the following statement:
“On February 11, 2021, the Iowa Attorney General’s Office filed charges related to an investigation of current and former public officials and employees with the City of Armstrong in Emmet County, Iowa.
Mayor Greg Buum, police chief Craig Merrill, city clerk Tracie Lang, and former city clerk Connie Thackery were charged with felony and misdemeanor offenses in a 21-count joint trial information approved by the Emmet County District Court. The top count against Buum, Merrill, and Thackery is a charge of ongoing criminal conduct, a Class B felony. The top count against Lang is fraudulent practice in the first degree, a Class C felony. The trial information also alleges additional counts against some of the defendants for theft, felonious misconduct in office, non-felonious misconduct in office, tampering with records, assault with a dangerous weapon, and falsifying public documents, as committed by one or more of these defendants. Three of the defendants were arrested by the Emmet County Sheriff’s office on February 12, 2021, with assistance from the Iowa Division of Criminal Investigation.
These charges stem from a multi-year investigation led by the Emmet County Sheriff’s Office, with assistance from the Division of Criminal Investigation and following a special investigation by the Auditor of State’s Office. The investigation uncovered wrongdoing committed by the defendants, including but not limited to misappropriation of city funds, the presentation of fraudulent public records, deploying a TASER against a civilian in exchange for cash, and falsification of ledgers to conceal embezzlement. The Iowa Attorney General’s Office is prosecuting these cases at the request of the local county attorney due to a potential conflict of interest and one or more additional arrests are pending.”
Buum’s bond was set at $67,000, Thackery’s at $33,000 and Lang’s at $44,000 through the Dickinson County jail.
A report from the Office of Auditor of State showed $100,650.10 of undeposited utility collections and “improper and unsupported disbursements.” In addition, supporting documentation was not properly maintained, according to the report.
The Iowa Division of Criminal Investigation said Friday, “Stay tuned for another arrest in this case.”
Irregularities in Armstrong were first brought to light in early 2017.
City hall, administrative and financial issues, city in “state of high concern,” mayor cuts off communication between city officials and clerk
After placing her on administrative leave, the Armstrong city council at its April 10, 2017 meeting reinstated then-city-clerk Kate Staton to her position. A week later, April 17, 2017, Mayor Buum posted a letter to the city hall door stating the city was closed and in a state of high concern.
Council member Clinton Davis resigned from the Armstrong city council as of April 14, 2017, citing the city council and mayor’s inability to work together respectfully.
State auditors and Iowa DCI were investigating the city of Armstrong in 2016 due to serious irregularities in financial statements and lack thereof for months on end, and a stack of cash found in the city offices that appeared to be utility payments from city residents, but without receipts or financial records could not be determined.
Staton’s administrative leave happened as a result of an investigation by the Emmet County Sheriff’s office, state auditors and the Iowa Department of Criminal Investigation (DCI) relating to alleged improprieties in water billing, filing of reports, payment of sales tax, employment withholding taxes, unemployment taxes, plus numerous penalties and late charges incurred from March through November, 2016.
The state auditor’s report cited improper disbursements, these included a $520 payment to Staton for back pay that was not supported or approved by the City Council. Staton also received an estimated overpayment of $416 for paid time off not approved by the council.
The auditor identified $400 payments to Staton and city maintenance worker Tylor Evans for vision and dental reimbursements, but there was no supporting documentation to substantiate that they incurred any vision or dental expenses. As a result, they were not authorized to receive the payments.
The city does not have a policy regarding cell phone allowances, but Staton received a $300 check in July 2016 for a cell phone allowance. The auditor says the payment was improper.
Staton received a check for $605.82 in August 2015 that was signed by the mayor, but not approved by the council. The auditor was unable to determine what the payment was for, and deemed it improper.
Evans received checks for $601.76 and $325.87 in November and December 2016, respectively. The auditor was unable to determine why the payments were made, but they had not been authorized by the council, making them improper.
Two disbursements to vendors were deemed unsupported: a $400 check to a dental office and a $174.65 check to the postmaster.
Finally, the auditor identified nearly $8,000 in late fees, penalties and interest paid by the city, including penalties and interest paid to the IRS for the late submission of reports. Late fees and interest were incurred on multiple occasions for certain vendors, including the city’s credit card.
A condition of Staton’s reinstatement is that retired city clerk Connie Thackery would oversee Staton’s work, particularly with utility and fee payments and bookkeeping. Thackery had retired in early 2016 and Staton was hired as city clerk in February, 2016.
When Staton arrived at Armstrong City Hall April 17, 2017, she was locked out, and she waited on the bench outside for someone to let her in.
“I heard some people were coming to protest my reinstatement,” Staton said. A letter issued by Mayor Greg Buum stated the action of closing down city hall was “due to the actions of Armstrong City Council members Rhett Hiney, Dan Moore, and Patty Thackery”
Instead, Staton said, “a handful of people showed up to support me and my reinstatement.”
Buum eventually came to ask what was going on.
Staton said she was waiting to get into the building to work.
Staton said Buum replied, “You’ll have to talk to a locksmith.” Buum then handed out a letter stating his directives.
Buum directed the police, sewer, water, and maintenance offices to “have no direct contact with [Staton].”
Buum stated this was due to “security and integrity of reports and record keeping.”
In addition, the mayor, police and maintenance offices were moved to “alternate locations.”
Buum concluded by stating, “I as Mayor declare a state of high concern for the City of Armstrong.” A state of high concern is not an official declaration, according to officials of other cities, and it may have been unlawful for Buum to shut down the city and prohibit officials from contacting the city clerk, even for official business.
Buum became mayor in a special election May 25, 2016, defeating Patty Thackery 210-201.
Buum is father-in-law to Police Chief Craig Merrill.
Then-city-attorney Brian Thul of Whittemore, newly hired by the city to replace Chris Fuhrman of Estherville, assured the public that everything was up and running and business was proceeding as usual for the city of Armstrong by April 18, 2017.
April 27, the Armstrong city council called a special meeting to discuss whether to fill Davis’ vacant council seat by appointment or special election, and to hold a discussion of city hall security, communications among the city clerk and council members and other city officials, city audit processes, and authority to speak outside of council meetings.
Police Chief allegedly used taser as party entertainment
The Armstrong City Council went into closed session June 28 after an investigation into Police Chief Merrill’s taser use and other activities. The council at that time voted to seize the computer and taser of Chief Merrill for investigation. They turned it over to the Emmet County Sheriff.
In July, 2017, in a special Armstrong City Council meeting called by three council members, Rhett Hiney made a motion to place Police Chief Craig Merrill on paid leave until the July 31 council meeting. Patty Thackery made a second and a roll call vote of 3-2, with Nathan Anderson and Dave Grussing voicing the nay votes, secured the decision.
Citizens seek removal of three council members
In August, 2017, 106 residents of Armstrong, just over 10% of the city’s population, filed a petition in Emmet County District Court for the removal of council members Rhett Hiney, Dan Moore, and Patty Thackery. City attorney Thul sought to take deposition of all 106 signatories in order to determine if they have legitimate reasons for signing, or if the matter is, “all for political sabotage of the three (3) council members and a frivolous lawsuit,” according to Thul’s Application.
Judge David Lester denied the petition signers’ demand for jury trial September 21, 2017 but granted Thul permission to depose all 106 signatories. However, the parties settled with the State of Iowa, represented by then-county-attorney Doug Hansen, and the case was dismissed January 4, 2018.
The Armstrong Journal began live streaming Armstrong city council meetings.
City officials unlawfully avoid and sabotage bargaining with city employees
May 10, 2018, Preston DeBoer, the union representative from AFSCME (American Federation of State, County and Municipal Employees) Iowa Council 61, filed five complaints against the city of Armstrong. City attorney Thul filed an answer stating simply that the city denied any and all allegations in the complaint.
Patty Thackery and Hiney were defeated in the November, 2018 city elections. Later in November, the city council held a special meeting to discuss firing Thul as city attorney after seven months of service. Dave Grussing made the motion for removal and Bradley Layne seconded it. In a role call vote, Grussing, Nathan Anderson and Layne voted yes. Rhett Hiney voted no. Dan Moore was absent, stating he was on the road for an out-of-state job and had not been given the required 24-hour notice for the meeting.
Thul was at that point representing the city against the five complaints filed by the Association of State, County and Municipal Employees (ASCME #61), and also representing the three council members Patty Thackery, Dan Moore, and Rhett Hiney against the citizens’ petition for their removal from office.
DeBoer said at the time that the city’s extreme avoidance of bargaining with its employees, several tentative agreements that were brought before the council with one council member voting no to the very agreement that he had bargained on behalf of the city, and refusing to bargain on health insurance, an item DeBoer said is a required element of bargaining, were “clear violations of the law.”
City avoids paying county for Armstrong dispatch services, loses dispatch coverage temporarily
The city of Armstrong and Emmet County had struggled with a dispatch agreement going back at least to 2012. Emmet County and Armstrong signed a dispatch agreement in 1983, which stated Armstrong would pay a set amount for dispatch. Starting in 2012, payments were not coming in, and the tab grew to over $15,000 as of August, 2016, at which point the county suspended dispatch services to the city of Armstrong. Mayor Buum said at the time as Armstrong radio traffic was practically zero, he felt Emmet County could provide dispatch services at no charge. Emmet County disagreed, with then-county-attorney Hansen telling Chief Merrill, “You need the services, Craig,” and stating some legal action could arise if the arrears were not paid. County supervisors pointed out that one hopes to never need the fire department, emergency services or law enforcement, but they must be prepared, trained and equipped for times they are needed, and that to run a police department, dispatch service is required.
Fuhrman presented a dispatch agreement to the Emmet County supervisors in late September, 2016 in which the city of Armstrong agreed to pay the dispatch arrears in two installments and the Emmet County Sheriff’s department agreed to cover needed time off for illness, emergencies or personal reasons for Chief Merrill and one weekend per month. The agreement was approved by both sides, though issues relating to the two payment installments continued.
Mayor said he wanted to put issues behind city
Mayor Buum stated in a June, 2017 interview with the Estherville News that he wanted to solve and put behind the city the issues that weighed it down as well as resolve the investigation from the Iowa Dept. of Criminal Investigation that had begun. “I want to concentrate on future projects and put to rest special, hidden agendas,” he said.
A criminal charge is merely an accusation and the defendants are presumed innocent until and unless proven guilty.