Alleged misuse of $2 million in off-duty funds at center of David Goldrich civil trial

Opening statements in the civil trial arising from provisional-Deputy Chief David Goldrich’s CEPA claim against the City of Jersey City and Public Safety Director James Shea were heard in U.S. District Judge Susan Wigenton’s courtroom.

Public Safety Director James Shea (left) and provisional-Deputy Chief David Goldrich (right, photo: City of Jersey City)

It took about four years, but Jersey City Police Department (JCPD) provisional-Deputy Chief David Goldrich finally got his day in court regarding allegations that he was retaliated against for inquiring about the potential misuse of funds related to the city’s off-duty jobs program.

Though many of the original charges from Goldrich’s 2015 lawsuit were dismissed by U.S. District Judge Susan Wigenton on December 8, 2017, the City of Jersey City and Public Safety Director James Shea stand trial in federal civil court due to a Conscientious Employee Protection Act (CEPA) claim.

Though the city denies any misappropriation of funds occurred, Wigenton wrote in her decision that “CEPA does not require an actual violation of a law or regulation, only a reasonable belief that a violation has occurred.”

The judge also noted in the December 2017 decision that it is “undisputed that the off-duty trust account ledger did not reflect sufficient funds to cover the costs of off-duty work, and that the City needed to cover the wages.”

Concerns over $2 million in “misuse of funds” caused retaliation, Frost claims

Goldrich’s attorney, Mark Frost, opened the trial by discussing his client’s complaint about the “misuse of city funds” involving the off-duty program which apparently violated city ordinance.

At the time of the complaint, around September 2014, then-Lt. Goldrich’s primary duty was coordinator of the off-duty employment program for supervisors – a position he was originally assigned to by former Chief Robert “Bubba” Cowan. According to Frost, Goldrich was formally assigned to juvenile.

After Mayor Steven Fulop removed Cowan as police chief and replaced him with Philip Zacche in June 2014, Frost said Zacche wanted Goldrich to work full-time as the off-duty supervisor coordinator in the chief’s office (primarily during the day shift). When Goldrich was transferred to the chief’s office he also moved next to the JCPD Office of Off-Duty Employment, where civilian employees Thomas Mahoney (off-duty intake coordinator) and Elyse Gibbs (off-duty employment manager) worked.

As for the off-duty program itself, Frost explained the basics of the secondary employment opportunity for JCPD officers and informed jurors how the city would require vendors to pay for services ahead of time – with monies being deposited into the off-duty trust fund.

Sometime in September 2014, Gibbs allegedly told Goldrich there was not enough money in the off-duty trust fund to pay officers – with approximately $2 million less in the fund than there should have been – according to Frost.

A meeting between Shea, Goldrich, and Mahoney was setup for October 2, 2014, to discuss what was going on with the fund. Frost said that Goldrich told Shea there was a “deficiency in the trust account,” and that money was being taken out of the off-duty account in violation of city ordinance.

After that meeting, Shea, Mahoney, and then-Business Administrator Robert Kakoleski held a follow-up meeting without Goldrich, according to Frost. After that meeting, Gibbs was ordered by Kakoleski to produce a report – which was apparently supposed to be, but not, produced every 90 days – which revealed the fund had a starting balance of -$500,000 and vendors were delinquent in paying $2 million.

“Other monies were being paid, co-mingled” to pay for off-duty police officers, claimed Frost. “Taxpayers were funding the program,” the attorney alleged as he noted such a situation violated the ordinance.

Frost added that, from the moment Shea was hired, the public safety director wanted to abandon the program, didn’t do much with the program, and rarely ever spoke with Mahoney (or Mahoney’s predecessor).

On October 27, 2014, Goldrich was allegedly reassigned by Shea to be the South District desk lieutenant on the evening shift. Frost noted that left Goldrich with essentially two jobs because he was still coordinating the off-duty program during the day, apparently due to his “loyalty” to the program as he waited for someone to replace him.

The working of two jobs and no longer being at police headquarters was part of the retaliation, Frost stated. The attorney added that, after being reassigned, Goldrich was working different shifts than his wife, who is also a police officer, which violated existing practices in the JCPD and put pressure on their relationship.

Eventually Goldrich had to see a psychologist due to the stress and made less money because of the transfer, according to Frost. Despite the claims of retaliation, Goldrich was ultimately promoted to captain and relieved of his off-duty responsibilities, which concluded the two-year period at the heart of the trial.

Not a case about retaliation, city’s attorney claims

Attorney Eric Magnelli, from the law firm Brach Eichler LLC, represented Shea and told jurors “this is not a case about retaliation against plaintiff or harm.” Rather, it was about Shea’s agenda to civilianize non-police functions and have the JCPD operate more efficiently.

According to Magnelli, around the time of Goldrich’s transfer, Shea was supposedly working on a major reorganization of the JCPD which included returning lieutenants back to the desk so they could become the backbone of the city’s precincts. Additionally, Magnelli alleged Shea also learned around that time that Goldrich’s sole job was to schedule supervisors for off-duty work – which apparently couldn’t be justified.

Magnelli said that the lawsuit originated from Goldrich’s claim that Kakoleski was illegally withdrawing money from the off-duty account, something he claims Gibbs never alleged (nor did Mahoney ever hear).

The defense attorney also claimed that Goldrich only started seeing a therapist after filing a lawsuit, and that Shea’s name was never mentioned in the psychologist’s notes (to the extent they can be read). What will be found, according to Magnelli, is how Goldrich felt other officers felt towards him.

That’s because Goldrich, according to Magnelli, “surreptitiously recorded at least a half dozen cops.” Additionally, the attorney dismissed the defense’s claim about working two jobs as retaliation because Goldrich volunteered to be coordinator – mostly to assign himself jobs.

It was also noted that Goldrich was promoted not once, but twice, during the Fulop Administration in an attempt to dismiss allegations of retaliation.

After Magnelli finished his opening statement, Scott Carbone, Supervisory Assistant Corporation Counsel & Practice Group Leader (Labor & Employment) working for the City of Jersey City’s Law Department, mostly echoed his co-counsel in opening statements.

Shea is expected to be the first witness called to the stand by Goldrich’s lawyers.

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