County counselor sought $125,000 and apology to cancel news conference on FBI probe

A lawyer representing Sedgwick County Counselor Eric Yost sought a $250,000 settlement from the county before going public with details of an FBI investigation into actions of county commissioners who have sought to fire County Manager Michael Scholes, according to memos obtained by The Eagle.

The documents show Yost later lowered that request to $125,000 and a public apology from Commission Chairman David Dennis, who on Oct. 24 had accused Yost in a public meeting of violating attorney-client privilege in his handling of county business.

The payment and apology did not happen, and Yost’s lawyer, Austin Parker, held a news conference Friday where he detailed Yost’s knowledge of an ongoing FBI investigation into the attempt to fire Scholes and Yost’s efforts to prevent the firing.

Parker said Yost and he had planned to hold a news conference to clear Yost’s name and lawyers hired by the county had reached out to him seeking an amicable private settlement.

“Obviously that did not come to fruition and we had to take steps to inform the public (of) the exact nature of the circumstances surrounding (Yost) in light of recent events,” Parker said.

He said the money Yost was seeking was equal to about eight months’ pay, which he figured he would need as a bridge to when he could start collecting full retirement at 65.

If the county had agreed to settle, Parker said he would have waived his fees.

He said Yost is 63 now and that it would be difficult for him to obtain a job for only a couple of years, especially with Dennis’ comments from the bench damaging his reputation.

Dennis said Monday he probably shouldn’t have made any public comments about Yost.

“I shouldn’t have said what I said at the time,” Dennis said. “I’m not an attorney, that’s my problem. I don’t understand attorney-client privilege, obviously. But in my mind there was a problem and I probably shouldn’t have expressed that since I don’t know the legal ins and outs.”

But he also said he didn’t think the negotiations on Yost’s departure were handled properly and he didn’t understand why Parker demanded they get it done by Friday.

“They were pressuring us into doing something and I don’t understand what the rush was on Friday,” Dennis said. “The whole thing is kind of strange to me right now. That’s not how you negotiate anything, is hold a gun to someone’s head and say we’re going to negotiate or else.”

He said the commission would have been happy to meet on Wednesday, the commission’s regular meeting day, to discuss it.

What will probably happen now is that the commission will call a special meeting Wednesday afternoon. The commissioners usually meet in the morning but will be attending a funeral for the father of a county department head.

Parker and Yost issued a statement at Friday’s news conference alleging that three commissioners attempted to fire Scholes for cooperating with an FBI’s investigation of O’Donnell last year.

O’Donnell has been charged with wire fraud and money laundering in connection with his handling of campaign funds. He continues to serve on the commission pending a trial set for January.

Yost and Parker’s statement on Friday identified Dennis, O’Donnell and David Unruh as the commissioners pursuing Scholes’ termination.

That, in Yost’s view, would have violated federal law prohibiting retaliation against government whistleblowers for cooperating with law enforcement, the statement released Friday said.

Commissioners Jim Howell and Richard Ranzau support Scholes and have boycotted closed sessions on a county-ordered investigation into county management.

The memos indicate all five commissioners were made aware of the status of negotiations with Yost.

The commissioners who voted to launch the county’s investigation of management have said they were motivated to do that not because of Scholes’ reports to the FBI but because key employees have either resigned or retired in the past year and others have told them they are considering leaving.

The memos outlining Yost’s settlement requests were sent to the commission by Kelly Rundell and Jon Newman, outside counsel hired to represent the county in negotiations for Yost’s departure from his position. They included a memo from Parker proposing the settlement for Yost.

Parker’s memo indicated Yost has been basically shut out of the county’s legal work because he had told Scholes that commissioners were illegally trying to force Scholes out because of his cooperation with the FBI.

The statement released Friday by Yost’s lawyer said Yost has now also been targeted for termination by some commissioners.

The memos outline several days of negotiations between the lawyers.

In one memo, Parker said costly litigation would ensue if the county didn’t reach a settlement with Yost, because Dennis’ comments hurt his chances of continued employment with the county and future job prospects.

The memo said Yost would settle “quickly and quietly” if the commission convened a special meeting before last Friday and approved the following conditions:

▪ A $125,000 settlement payment to Yost.

▪ A public apology by Dennis, the language of which would be agreed to by both sides.

▪ An agreement that the two sides would not publicly disparage each other, with exceptions for testimony in criminal, legal or disciplinary matters.

▪ An agreed-upon letter of reference, signed by the commission chairman, that Yost could use in seeking future employment.

Under those conditions, Yost would have been willing to resign as of Dec. 3, which would continue his health benefits through the end of the year, the memo said.

Otherwise, the alternative would be that Yost would sue the county and would not settle for less than $250,000, the memo said.

In the memo, Parker noted that the last whistleblower case he handled in federal court had generated $100,000 in litigation costs before it even went to trial.

When the special meeting didn’t happen, Parker carried through with the news conference.

He said Yost had not violated attorney-client privilege because he acted to prevent an illegal act by the commission majority of Dennis, O’Donnell and Unruh.

Lawyers can break confidentiality to prevent a client from breaking the law or to defend themselves in disputes with the client, Parker said.

Also at the Friday news conference, Parker said that Yost has been interviewed on that subject by FBI agents twice, for a total of 3 ½ hours. The statement Parker released said Yost was contacted to “discuss the activities of commissioners Dennis, Unruh and O’Donnell toward Scholes.”

A memo obtained by The Eagle earlier showed that the effort to oust Scholes has been going on for a year and Unruh had asked in late 2017 for Yost’s legal opinion on whether the commission could fire Scholes for providing information to the FBI.

Yost originally told Unruh he thought that would be permissible because Scholes owed the commissioners a duty of loyalty.

But he followed that up with a researched memo reversing that. The memo concluded that firing Scholes for cooperating in a federal investigation would be unlawful, exposing the commissioners to potential criminal and civil liability and exposing the county itself to potentially paying substantial civil damages.

Unruh said he took no action against Scholes for talking to the FBI before or after Yost’s memo.

This story was originally published November 5, 2018 at 1:35 PM.