INDIANAPOLIS (WTHR) - A former state financial officer who claims she was wrongfully fired lost her appeal on ethics violations Thursday.
Leeann Walton was fired a year ago after the Department of Homeland Security said she failed to disclose family ties to three women she recommended for hire.
On the witness stand, three former temporary workers described their connections to Leeann Walton, the Chief Financial Officer at the Department of Homeland Security.
"He had heard rumors that I was Leeann's sister," said Lisa Hunt, referring to questions raised by an ethics officer.
Ashley Walton said she got her job after an executive within the State Fire Marshal's office told her step-mother about an opening for a clerical assistant. "She (Walton) took my resume and said that she would give me the information," Ashley Walton recalled.
A third relative also spoke about being confronted about her ties to Leeann Walton. "He (the ethics officer) needed to know if I was related. And I told him 'yes, I was related, that I was her aunt'," said Patricia Burdine, who worked in the finance section where her niece was in charge.
An aunt, a step-daughter and a sister were all hired at DHS without any of them divulging one important fact: Leeann Walton, the woman who submitted their resumes to the state's temp agency, was their relative.
"I was terminated unfairly. I didn't hire anyone," the embattled Walton told 13 Investigates.
But Indiana's Ethics Commission disagrees and upheld charges of nepotism against her.
"Our office received numerous complaints that she was hiring relatives," said Lori Torres, the Inspector General for Indiana.
In its unanimous 5-to-zero vote Thursday, the Ethics Commission determined that Leeann Walton hid the fact that she helped her relatives get jobs.
Walton was terminated in August 2016 for "poor judgment and lack of candor" after a nepotism complaint to the Ethics Commission about Walton's sister Lisa Hunt surfaced. Hunt worked in the finance office under a different supervisor.
Directors tried to remedy the problem by transferring Hunt to the training section.
Days later, investigators discovered something else. Walton's aunt, Patricia Burdine, was the receptionist in the finance office and Walton's step-daughter was a clerical assistant for State Fire Marshal Jim Greeson.
Walton admitted she handed over resumes for her family members and reported payment information for the positions but insists she was told by a DHS personnel director there wasn't a problem.
"As long as there was no direct line of supervision, they weren't a direct report to you and you didn't participate in their interview process, which I did not, it wasn't going to be an issue. So I didn't feel like I had done anything wrong," she explained.
But investigators with the Indiana Inspector General's office say the state's nepotism rule has been updated.
"Indiana Code 4-26-16(c) simply states that an individual employed by an agency may not hire a relative. Mrs. Walton had the authority to affect the employment and all those under her office," said Stephanie Mullaney of the Inspector General’s office.
Walton's attorney argues the charges are a stretch from the intent of the law.
"There's not a single state witness that said Lee Ann Walton hired anybody. There's no basis in fact for finding she somehow violated the nepotism rules. No base in law," said Steve Fulk.
Fulk said the women were all hired by the temporary agency.
The State points to text messages Walton wrote after the secret was out.
One of Walton's staff members wrote: "...asked me if I knew if Pat was related to you. Apparently he and the director have heard the rumors. I gave Pat a heads-up and wanted to let you know too," wrote the staff member.
To which Walton replied "I'm not sure what the hell. If she has told people then she should be let go. I can't have her there."
Walton, her aunt and sister were all terminated from DHS. Walton's step-daughter took a job at another state agency. Still, Walton believes she's being targeted.
"This has been extremely difficult," said Walton, choking back tears.
And now, after a year, the State Ethics Commission ruled Walton did violate state nepotism rules.
The board also took another step: Leeann Walton has been banned from ever working in state government again.
"She misrepresented her role to the commission," Torres told 13 Investigates. "People are watching. It was the people at Homeland Security that made these reports to us," she added.
Walton, who worked for several state agencies over 21 years and never had disciplinary action until her firing, says she appealed the charges of nepotism because relatives of other employees are working together within state agencies.
Torres says employees may be working at the same agency, but not knowingly under the supervision of another relative. Torres says in some rare cases there could be special exceptions that are approved by the commission.
13 Investigates received this statement from Walton's attorney:
"We appreciate the work of chairman James Clevenger and the members of the Indiana State Ethics Commission in their attempt to interpret and follow the rule of law. We support of the Commission's function in seeking to uphold the ethical functioning of state government.
"More importantly, I stand resolutely with my client Leann Walton and with the evidence adduced at her ethics hearing to pursue, likewise by the rule of law, the correction of the Commission's error in its order today.
"Given that the State's own witnesses admitted that Leann Walton hired and/or supervised no relatives, we are hopeful that the commission will see its error without in the necessity of judicial review.
"IDHS employees and hearing witnesses Kim Snyder and Beth Hampshire testified that they recommended Pat Burdine and Lisa Hunt (respectively) as independent contractors, and Ashley Walton was hired by Dave Smith and Robert Johnson within the State Fire Marshal's office. There was no evidence to the contrary.
"Additionally, because these individuals were not even State employees, but KHI contractors, as the state had been under a hiring freeze since 2016, we hope the commission will see the further error in its ruling.
"As the process of correcting such errors grinds on, we remain focused on the continuing revelations of systemic mismanagement within IDHS, including inappropriate use of federal funds, fraudulent utilization of Leann Walton's electronic credentials for FEMA funding access
and cash draws, the continuing climate of retribution surrounding reporting civil rights violations within the department (such as that suffered by Leann Walton), and the intentional omission of such equal employment opportunity violations in securing federal funds through the grants application/request process--from which revelations today's erroneous ruling is but a temporary distraction."To See the FEMA Funding Story: http://www.wthr.com/article/confidential-fema-accounts-sent-to-former-employee-indiana-dhs-accused-of-mismanagment
Steven Fulk, Attorney at Law
Counsel for Leann Walton