The bipartisan panel said evidence supports second- and third-degree felony charges of misuse of taxpayer money and possibly a misdemeanor count for misusing Salt Lake Valley Health Department funds - dealing a potentially fatal blow to Workman's re-election campaign and her political career.

"The evidence is entirely consistent with Nancy Workman's guilt in the matter," the prosecutors wrote in a letter signed by all four. "We find that Nancy Workman lied to co-workers, to investigator Craig Watson and to the panel. . . . Her acts of deception are calculated acts to circumvent the safeguards that were in place to prevent misuse of public funds."

They left the decision of whether to charge the Republican mayor to Democratic District Attorney David Yocom, who declined to say late Wednesday if he would take the case to court. He may hire a special prosecutor to handle the case.

The panelists - prosecutors from four neighboring counties - said Workman misused about $17,000 in public money to pay two successive employees at the nonprofit South Valley Boys and Girls Club to assist the mayor's daughter in her work.

Prosecutors said the "scheme" would have continued - with the hiring of a third employee - if not for the investigation.

Workman vehemently defended herself, emphasizing she was helping the club's kids. She said the allegations are unfounded.

"I have to tell you I'm surprised and maybe shocked because there was nothing there," she said at a news conference Wednesday. "We did nothing wrong."

She vowed to continue her bid for a second term and stay in office. If she is charged with a felony, however, state law would require the County Council to place her on paid leave and appoint an acting mayor.

"It was absolutely the right thing to do," Workman said. "There was no benefit to me, no benefit to my daughter."

The mayor - dressed in boots, a T-shirt and jeans and joking that she was wearing "horse snot" from a morning ride - acknowledged she may have made a paperwork mistake, but insists there was no cover-up. "We should have done it a little differently."

Her private attorney, Ron Yengich, one of Utah's top defense lawyers, said he respects the panelists, but they are "flat wrong."

"I've looked at it and I don't think they can sustain misuse-of-public-money counts," Yengich said, noting the case, if filed, would go to a jury because there is little chance of a settlement. "They've made the political point that was desired to be made at the beginning, which is to investigate her, and I think they should drop it, because I disagree with their ability to convict her."

Workman is personally paying for Yengich's services, according to her office. If the mayor is exonerated in court, the county could end up footing her legal tab.

If charged, Workman would be the second Salt Lake County officeholder in recent months to face a felony for misusing public money. Former Auditor Craig Sorensen pleaded guilty last week to felony misuse of taxpayer money for using a county gas card to buy fuel for his personal cars.

Workman's troubles come amid a spate of county scandals, including the vehicle-abuse controversy that toppled Sorensen and two of the mayor's top aides.

The County Council may spell out a "plan of action" Tuesday in case the mayor is charged, according Chairman Steve Harmsen, adding that county residents should still have faith in their government.

"The important thing to recognize is that the problems of the mayor's office are not the problems of the county," said Harmsen, a Republican who notes he still backs Workman and believes she can rebound. "These [potential charges] should not reflect a meltdown of the county."

The bipartisan prosecution panel unanimously agreed there was enough evidence to warrant charges.

According to its "Findings of Fact," Workman told her chief administrative officer, David Marshall, in June 2003 that she wanted to hire Alina Iorga as a "community liaison

the Eastern European community on health issues. She never mentioned the Boys and Girls Club, the report says, and Marshall believed it was a legitimate health-related job.

Iorga had been employed by the club as an accountant for six months prior. She remembers doing some "translation work" after she was hired, but she was never assigned any county tasks and only did work for the club, the report says. Iorga reported directly to Workman, who also signed her time sheets.

When Iorga left the position, the club advertised for an accountant, not mentioning any county liaison position, the report says. Workman's daughter, Aisza Wilde, hired Jennifer Schroder, who responded to the ad. The county paid Schroder's salary but Marshall never was told of the new hire.

Health Department Executive Director Patti Pavey fired off an e-mail in May of this year to Human Services Director Kerry Steadman, referring to Schroder as a "ghost employee," and pressuring Steadman to resolve the issue. Pavey also sent an e-mail in June 2003 complaining about the hire while budgets for other programs, such as breast-cancer screening, were being cut.

Schroder's position was transferred to the mayor's operations fund and subsequently eliminated from the county payroll.

The panel said "there is no evidence that either [employee] ever performed any work for Salt Lake County."

County personnel records show the mayor's office was ready in June to use county money to hire a third employee, Kim Henage, to help at the club. The investigation halted the action. Instead, Henage is working at the club on the organization's payroll.

Utah County Attorney Kay Bryson said in an interview Wednesday that an offense "was committed" - essentially tapping Health Department funds to create "an assistant for her daughter."

Workman and other prominent Republicans previously charged that Yocom's investigation was "politically motivated." The mayor had backed away from that statement but restated it in a news release Wednesday.

"It is regrettable that so many precious resources would be used for someone's political agenda," she said in the release sent by her campaign on county stationery. "It is sad that our legal system can be abused in this fashion, but if the Democratic district attorney elects to press charges, I take heart in the fact that my day will come in court and I will be fully vindicated."

Bryson, a Republican, said "politics just didn't play a part in it." Those who say otherwise, he added, "don't have the facts."

Club Executive Director Bob Dunn was surprised at the panel's decision, but said he believes Workman's intent was to "help the kids" and the club. He pointed out that prosecutors said his nonprofit organization had done nothing wrong.

For her part, Workman said she intends to keep working, but her aides clarified later that she would follow the state law that requires elected officials to take paid leave if charged with a felony.

"At this point," the County Republican Party still backs Workman, according to Chairwoman Tiani Coleman.

"I'm one of those people who think it would be warranted to not bring the charges," she said. "I definitely believe there was no intent on the part of Mayor Workman to do anything criminal."

tburr@sltrib.com

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Tribune reporter Heather May contributed to this story.

Workman poll

According to a Dan Jones & Associates poll reported Wednesday night by KSL-TV:

* Should Workman resign?

Yes: 26 percent

No: 65 percent

* Should Workman continue as the GOP nominee?

Yes: 43 percent

No: 44 percent

* For whom would you vote for Salt Lake County mayor?

Corroon: 37 percent

Workman: 23 percent

Cook: 10 percent

Others: 3 percent

Unsure: 26 percent

Poll of 408 Salt Lake County residents on Sept. 1. Error margin is plus or minus 5 percent.