Internal investigation into alleged fraud within Eau Claire Human Services Dept. finds no illegal activity

Independent report follows 2-year criminal investigation by county sheriff, which didn't lead to charges

A gavel in a courtroom.
Joe Gratz (CC0 1.0)

An internal investigation into alleged fraud within Eau Claire County’s Human Services Department has found no instances of illegal behavior by staff. It follows a two-year criminal investigation by the County Sheriff Department that has “taken a toll on morale and working environment of the entire county government.”

During a four-hour Eau Claire County Board of Supervisors meeting Tuesday, attorneys with Milwaukee-based law firm Von Briesen and Roper gave a presentation rebutting multiple allegations of fraud in a 442-page investigative report from the sheriff’s office that claimed Eau Claire County Administrator Kathryn Shauf, former human services director Diane Cable and others obstructed officers.

Attorney Mindy Dale said the sheriff’s criminal investigation caused years of uncertainty for the human services department and the firm’s independent findings represented “the rest of the story.”

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“In our opinion, after hearing our report, any additional investigations stemming from the Eau Claire County investigation are unwarranted and inadvisable,” Dale said. “Potential liability has already been created by inaccurate characterizations and potentially slanderous statements made in the public.”

The Sheriff’s department launched its investigation in May 2020 after two county board members raised concerns about the human services department being over budget by around $2 million the previous year. Part of that came from an accounting error, which the supervisors said wasn’t reported but has since been remedied, according to Dale.

The sheriff’s investigation resulted in search warrants being served on the human services department, county administrator’s office and a nonprofit organization in the Twin Cities. Hundreds of thousands of emails, instant messages and documents were collected by the sheriff’s office during the investigation, and evidence was turned over to La Crosse District Attorney Tim Gruenke. The district attorney opted against pressing charges.

A March 31 statement from Gruenke said he “found no facts that were deserving of a criminal offense, especially considering the burden of proving a crime beyond a reasonable doubt.”

Gruenke applauded the Eau Claire sheriff’s office for its thoroughness and said the concerns did justify an investigation. He said he hoped his decision “can begin to heal what seems to be an environment lacking cooperation and transparency both within the levels of government and amongst departments.”

“It is obvious from the emails and messages in the report this entire process of the investigation has taken a toll on the morale and working environment of the entire county government,” Gruenke said.

In lieu of criminal charges, the Eau Claire County Sheriff’s office published a report of more than 400 pages that includes copies of emails and other communications between human services staff, the county administrator and the county’s attorney. It included accusations that the county administrator and others obstructed the investigation, that human services staff purchased expensive items like an $1,800 swimming pool, a $650 tricycle, a Victoria’s Secret gift card and an $829 piano.

During Tuesday’s board meeting, Dale said those purchases were justified uses of funds for therapy or incentives for children in various human services programs.

“And we’ve all heard about the Victoria’s Secret gift card,” Dale said. “There was an incentive program that allowed children in the juvenile justice program to have a gift card if they complied with certain requirements, and they could go to the mall and buy anything they wanted. And this teenage girl wanted to have some nice underwear.”

Dale also noted the sheriff’s department insinuated human services staff were overspending on hotel rooms because employees were not required to share rooms.

“In this day and age with privacy interests, workers should not have to share hotel rooms,” Dale said. “I don’t care if the Eau Claire County Sheriff’s Department requires employees to bunk together. For good policy reasons, you don’t require it for employees.”

Dale prefaced her report by saying she can guarantee Von Briesen’s findings “will not make everyone happy.” Her comments followed a wide array of angry county residents who cited allegations in the Sheriff’s department report and called for new county leadership.

Just before Tuesday’s board meeting concluded, several supervisors said they have more questions and want to hear from sheriff’s department investigators in closed session.

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