KINGSTON - Police leaders violated municipal policy prohibiting cash payments to officers working private security details at least 160 times and lied to cover up the violations, according to a report released Thursday.
An investigation by Philadelphia-based law firm Ballard Spahr found that former Police Chief Keith Keiper improperly diverted at least 31 checks from the municipal payroll system and that the former assistant chief Daniel Hunsinger, now Forty Fort police chief, diverted at least 111 checks since 2009.
The report says nearly $32,000 in cash compensation did not go through the payroll system and that police officers working security for Wyoming Valley West Middle School dances were directly paid cash in at least 18 instances. Officers hired in the past two years knew nothing about the policy, the report says.
The report says Mr. Keiper and Chief Hunsinger paid officers "cash in an envelope" for work at events not sanctioned by the municipality.
"As a result, Keiper and Hunsinger were operating the equivalent of their own security force and the officers were potentially not covered by the municipality's workers' compensation, disability or liability insurance policies," the report says.
Mayor James J. Haggerty called the officers' alleged actions "intolerable" and "unconscionable," saying they schemed to conceal their actions.
Luzerne County District Attorney Stefanie Salavantis said the matter appears to involve only personnel issues, which her office does not investigate.
Mr. Keiper, who was on paid administrative leave since the investigation began May 1, resigned last week, and as a result of the investigation Mr. Haggerty has accepted it effective May 29. As a penalty, Mr. Keiper had been suspended for 50 days, time that will be deducted from his accrued leave, Mr. Haggerty said.
Mr. Keiper did not return a call seeking comment.
In an interview Thursday, Chief Hunsinger said he was not contacted about the investigation until earlier this week. He denied a cover-up, saying the issue appeared to be a misunderstanding.
"I never saw a written policy," Chief Hunsinger said. "There's been so many policies that have started, been implemented and then just forgotten about based on past practice with the department I just assumed that the policy stopped, the practice had stopped. And I believed they were aware of it because they knew we were still working (special details)."
The municipality's investigation began amid reports that the Internal Revenue Service was probing records related to finances at Wyoming Valley West School District.
IRS spokesman David Stewart said the agency could neither confirm nor deny any investigation.
Contact the writer: jhalpin@citizensvoice.com