The Utah attorney general’s office has declined to prosecute two former top Unified Fire Authority (UFA) officials — one of them a popular Republican Salt Lake County councilman — who faced allegations of nepotism and misusing public funds.

After a more than yearlong investigation, the office said it decided there wasn’t a reasonable likelihood that former Chief Michael Jensen and former Deputy Chief Gaylord Scott could be criminally convicted.

That’s because “the exorbitant bonuses, reimbursement for personal vacations attached to official travel, purchase of electronic equipment for personal use, and the hiring of close family members outside UFA hiring rules were all ultimately approved through the loose UFA governance and management structure,” the office concluded in a prepared statement.

But the 196-page investigative report, released to The Salt Lake Tribune through an open-records request, illuminates Jensen and Scott’s pattern of abuse of their public positions for personal benefit. It was a culture that put “loyalty over ethics,” in the words of one assistant fire chief, and which another former chief said was overseen by a board that was “asleep at the wheel.”

“The behavior of a few former UFA officials was troubling,” said the statement from the attorney general’s office. “The audit and investigation also revealed that the way UFA was structured, created an environment in which there was little oversight or control of the officials’ actions. It appears that certain former UFA officials recognized and exploited the absence of accountability.”

The investigation also uncovered three images of child pornography on Scott’s former computer, but a separate case on that matter also was closed without charges after the A.G.'s office concluded it would be difficult to win a conviction.

Chief allegations
• Yearly bonuses in the tens of thousands of dollars without proper approval.
• Taxpayer-paid vacations piggybacked on official business in places such as Phoenix and Anaheim, Calif.
• Nepotism. The employment of relatives in the UFA, including two sons, two brothers-in-law and a cousin of then-Chief Michael Jensen; three nephews of then-Deputy Chief Gaylord Scott.
• Computer, technology purchases for work that mainly were used for personal business.
• Child pornography images found on the former computer of Scott.
Utah A.G. conclusion
No criminal charges because of a lack of a reasonable likelihood of conviction.

The inquiry into the UFA officials follows an audit by State Auditor John Dougall’s office, which recommended the board seek criminal investigations of Jensen and Scott for a dozen potential violations and encouraged efforts to seek half a million dollars in reimbursement from them and three other former fire department administrators.

In a pair of reports, auditors found that Jensen and Scott put their personal interests ahead of the organization’s but got away with it because board members trusted the chief and failed to exercise proper oversight.

The investigation by the attorney general’s office verified those findings and built on them through extensive interviews with Jensen, Scott and nearly 40 witnesses, but a panel of experienced prosecutors who independently assessed the case ultimately found it lacked a reasonable likelihood of conviction.

“The threshold for criminal prosecution is higher than that required for civil matters," the auditor’s office responded in a prepared statement. "We appreciate the hard work of the investigators and prosecutors within the Office of the Attorney General and their confirmation of the findings of our audits.”

Jensen, reached Friday after multiple requests for comment, said he hadn’t read the investigative report and asked for a copy of it.

“I retired two years ago," he said later, after the report was provided to him. "I’ve moved on. I wish the UFA the best.”

He declined further comment.

Scott, through his attorney Richard Van Wagoner, also declined to comment on the A.G.'s report overall in a statement emailed Friday to The Tribune. He did, however, deny any knowledge or involvement of child porn on his old computer.

A ‘vindictive’ and ‘abusive’ culture

In an interview with investigators, UFA Human Resources Director Arriann Woolf recounted a time during a morning command staff meeting when she said she told Jensen that agency policy didn’t permit something he wanted to do.

Jensen got angry, the report says, and he “came over to the table,” yelling, “I don’t give a f--- what your policies say.”

In a separate interview with investigators, Michael Watson, an assistant UFA chief, recounted the same story.

That outburst was emblematic of Jensen’s and Scott’s attitudes toward rules generally, Woolf said.

Some policies were operational, which the chief could implement and get the board’s OK on later, while most required board approval beforehand. The chief preceding Jensen had erred on the side of caution, making most policy changes through board action, Woolf said. But Jensen wanted to push most such decisions into the operational policy category, “which were policies he could change and manipulate.” He and Scott would often change the travel policy, for example, immediately before or after they traveled to fit whatever they wanted to do, she said.

Witnesses said they were often aware of ethical violations or other actions that made them uncomfortable but were wary of taking their concerns to the board because its relationship with Jensen was “too cozy.” They also were afraid of retaliation, describing Jensen and Scott as “vindictive,” “intimidating” and “abusive.”

Erik Sandstrom, a former assistant chief at UFA and a current program manager, told investigators there “wasn’t a chance in hell” he could have gone to the board if he saw Jensen and Scott doing something wrong, the report states. If he’d ever circumvented them and done so, Sandstrom said he “wouldn’t have a job Monday morning.”

Several of the witnesses raised concerns that Jensen’s position on the County Council facilitated this environment. (Jensen also now serves on the Inland Port Authority Board, which has been criticized in recent weeks for a lack of public accountability because most of its deliberations seem to be occurring in closed-door committee meetings.)

The County Council oversees funding that would affect the board members’ cities, Watson and former Cottonwood Heights Mayor Kelvyn Cullimore explained in separate interviews. And former Eagle Mountain Mayor Christopher Pengra noted that Jensen at the time also sat on the board of the Central Utah Water Conservancy District, with which his city had contracts. Pengra told investigators it had crossed his mind that his UFA board actions involving Jensen might affect Jensen’s decisions on the water board.

Though some felt Jensen’s political clout made it difficult for the board to hold his “feet to the fire,” as Pengra put it, not everyone saw his County Council position as a negative. Donald Berry, a former UFA chief, said Jensen’s connections were an asset that helped form the agency.

Big bonuses, nepotism and questionable reimbursements

Details of exorbitant bonuses, or “incentives,” first came to light in a July 2016 article in City Weekly. These started out small but eventually reached more than $30,000 apiece a year for top officials.

Between 2011 and 2015, Jensen and Scott, along with Chief Financial Officer Shirley Perkins and Chief Legal Officer Karl Hendrickson ultimately received more than a combined $400,000 in incentive pay.

Christopher Cherrington | The Salt Lake Tribune
Christopher Cherrington | The Salt Lake Tribune

In the wake of the news story, the state auditor said he would begin a formal review. A week later, Jensen announced he would leave the agency. Scott had resigned about a month earlier, while Hendrickson left that October. Perkins had retired and was replaced in January, and later told investigators her departure was prompted by fear of retaliation for providing information about Jensen and Scott to a UFA board member.

The scathing report from the state auditor the following January recommended the UFA board seek a criminal investigation, and the matter was referred to the state A.G.'s office.

Jensen and Scott told A.G.'s investigators the financial incentives were justified because of top administrators’ additional work in funding and building new fire stations within the separate but related Unified Fire Service Area (UFSA).

The UFSA is a taxing district made up of municipalities that levy property taxes to build fire stations operated by UFA, and the UFA leaders' bonuses came from UFSA tax revenues.

UFA board members told investigators that they were unaware of the bonuses and had not approved them. Jensen rebutted that claim in his own interview, insisting the board knew about the incentives and said they were approved through proper channels.

Investigators dug into other questions raised in the audit, as well, such as whether Jensen and Scott violated state nepotism rules. Jensen had two sons, two brothers-in-law and a cousin under his command. Scott had three nephews in the UFA.

Looking into questionable travel expenses, investigators found that administrators, including Jensen and Scott, took at least two trips — one each to Phoenix and Anaheim, Calif. — related to their positions with UFA where they submitted reimbursements for expenses on days they had extended the trips beyond what was required for work responsibilities.

Records also showed a number of suspicious agency credit card charges, including one the night of Jensen’s 2016 re-election to a fifth term, when he, Scott, former UFSA Clerk Ryan Perry and their wives went to dinner in a nice restaurant at the Salt Lake City Hilton Hotel. The $430.80 tab was appropriately charged to UFA, Jensen and company said, because the group had discussed UFA plans for the next year.

The attorney general’s office said it appeared the incentives, reimbursements, purchases and hiring of close family members were ultimately approved through the UFA governance and management structure.

The investigation also probed Scott’s and Jensen’s technology purchases. The audit found that Scott had spent $23,000 of UFA money and Jensen $1,600 with his company card on iMacs, iPads, stainless steel Apple watches and cameras and the like. These charges were found to be “unsupported,” meaning they had not gone through proper channels with staff to log and monitor the equipment.

When the two men resigned, they returned their devices to UFA. The drives and memories had been erased but upon reconstruction, auditors found that one of Jensen’s computers had “a significant number of files which indicated it was used for a personal family business.” Other equipment had files soliciting campaign contributions.

Scott’s computer, the audit said, contained thousands of pornographic images. A.G.'s investigators found among those three images of child pornography and cited a separate case number for that inquiry. But that investigation, too, has been closed without charges, after the A.G.'s office concluded multiple people had access to the computer, making a successful prosecution difficult.

“Mr. Scott has no interest in and is offended by the existence of child pornography and victimization of children," his attorney, Van Wagoner, said in a statement to The Tribune. "He turned in his computer at the time of his retirement and had no reason to be concerned about its contents. If anything of that sort was on a computer he used or to which he (and possibly others) had access, he was unaware of it and has no idea how it made its way there.”

Timeline
July 6, 2016
Story published in City Weekly detailing allegations of excessive bonuses, perks and misuse of public money at the Unified Fire Authority (UFA).
Aug. 3, 2016
State auditor’s office announces audit of UFA.
Aug. 13, 2016
UFA Chief Michael Jensen announces his resignation. It comes about a month after Deputy Chief Gaylord Scott’s departure.
Jan. 18, 2017
State audit rips UFA on allegations of misuse of public funds, out-of-control spending. Recommends a criminal investigation.
Jan. 26, 2017
Salt Lake County district attorney declines case because of conflict of interest, refers case to Utah Attorney General Sean Reyes
July 18, 2018
Utah A.G.’s office closes case after more than a yearlong investigation. 
Aug. 31, 2018 
The Salt Lake Tribune obtains the 196-page investigation report through an open-records request.

Changes at UFA

In the time since the audit and the exodus of top officials from UFA, Robert Dahle, Holladay’s mayor and the agency’s new board chairman, said the changes have been “pretty dramatic” and include improved morale and better policies.

“We hired a new chief [Dan Petersen] from outside the state to come in, and he immediately reorganized the staff and assigned a fire chief to basically matrix out every finding that came out of that report from the auditor,” Dahle said. “And over a course of months, we went through every one of them. ... So, I mean, the way we operate has been totally changed. And I think the UFA is obviously better for it.”

For example, Dahle said, when the board became aware of the incentives, it put a policy in place that requires approval for all bonuses through a vote of the full board in an open session.

Dahle said the board of UFA has “some responsibility to bear” in the controversy but pushed back on assertions that the board had abdicated its oversight role.

“Part of the reason we got into the trouble we did was because the board was not receiving full information, and it’s hard for a board to act responsibly when they don’t have accurate, timely information at their hands when they make their vote,” he said. “So I certainly think there’s plenty of blame to go around, but it would not be right to place all the blame of what happened at UFA on the board of directors.”

With the conclusion of the investigation, Dahle said he hopes UFA can leave its troubled past behind.

“We’re anxious to just move on from this,” he said. “I think citizens should be confident that they’re receiving the best service at the best price and that the oversight of taxpayer funds is as good as it’s ever been in Unified Fire.”