Almanac

News - December 11, 2013

Hanretty released from prison, appeals court order for $2.7M in restitution

by Barbara Wood

Tim Hanretty, the former Woodside and Portola Valley school official who was imprisoned for embezzlement and misappropriating public funds in 2012, has been released after serving a year of his two-year sentence and has taken steps to appeal a court order to repay $2.67 million to the Woodside Elementary School District.

Mr. Hanretty's former attorney, Michael Markowitz of Danville, said he has filed a notice with the court of appeals on Mr. Hanretty's behalf to give him more time to appeal the restitution order. Mr. Markowitz said he has asked for a court-appointed lawyer to handle the appeal for Mr. Hanretty.

Mr. Hanretty, the former Portola Valley School District Superintendent and Woodside Elementary School District finance officer, pleaded no contest to six felony charges of embezzlement and misappropriating public funds in both school districts in July of 2012 and was sentenced to two years in prison the following October.

In Woodside he was accused of forging documents that allowed a loan of up to $3 million to be made to the district, despite the fact that the school board had approved borrowing only $632,000. He eventually obtained a loan of $2.6 million, which district officials say was spent on school projects. He changed the loan terms from a 10-year payback to a 21-year payback.

In Portola Valley further investigation found Mr. Hanretty had turned in $100,926 in invoices for work on his own home, to be paid by the district's solar panel fund.

Beth Polito, superintendent of the Woodside Elementary School District, said the district learned from the district's county counsel, John Nibbelin, that Mr. Hanretty had been released from prison. The district has asked Mr. Hanretty's probation officer to have him "steer clear of us because it's awkward and uncomfortable," Superintendent Polito said.

In September Mr. Hanretty had been ordered to repay the Woodside district about $2.67 million to reimburse the cost of the loan he had fraudulently obtained, plus interest costs and the costs involved with uncovering the crime.

That total — nearly $2.937 million — was reduced to reflect $20,000 Mr. Hanretty has already paid toward restitution and $250,000 from insurance payments to the district.

Mr. Markowitz had argued that the Woodside district had benefited from all the loan proceeds, and had fought the district's attempt for restitution based on an unauthorized debt that it was saddled with. The district sought about $3.63 million in restitution.

Superintendent Polito said the district realizes there are "substantial obstacles to any significant recovery of the restitution," but they are working with the probation department to try to get as much as possible repaid to the district. Superintendent Polito emphasized that the district is not in financial trouble and should "be able to meet all of their financial obligations in the current year and in all future years."

Mr. Hanretty had already been ordered to reimburse the Portola Valley School District for the money spent on his home, plus associated costs of investigating the theft for a total of nearly $182,000. By September he had repaid almost $121,000, according to Karen Lucian, the district's administrative coordinator.

The misappropriation of public money was first discovered in 2011 when a Woodside school board member questioned the amount of debt service the district was paying.

After investigation uncovered the dubious loan, Mr. Hanretty resigned in January as the Portola Valley district superintendent, a job he began in August 2010. Before that, he had served as chief business officer of both districts.

Comments

Posted by John, a resident of another community
on Dec 11, 2013 at 9:36 pm

Mr Hanretty has a long history of stealing monies from non profit organizations and his most recent positions in school districts. Those aware of his prior actions were vindicated that he was finally caught. He should NEVER be trusted around money as he certainly knows how to "play the part." It is unfortunate he was released after serving one year; given the light sentence he received.


Posted by Wait a sec, a resident of Atherton: other
on Dec 11, 2013 at 10:27 pm

My reading of these articles found:

1. Mr. Hanretty apparently had $101,000 of home-related solar work reimbursed by the school district. This is stealing, and he definitely needs to pay it back.

2. Mr. Hanretty spent $2.6M of school district loan money on school district projects he presumably thought were important but were not authorized. It's hard for me to call this theft, since he didn't steal the money for himself. Certainly a misguided public servant who thought the ends justified the means, and who thought he knew better. I would agree this is misappropriation of public funds.

Should he have to pay the entire $2.6M back? That's a bit fuzzy. If it was spent on things the school absolutely didn't need, and currently has no use of or benefit from, then there is a very persuasive argument that he should. But what if the school is benefiting from at least some of this? I'm not sure repayment of the entire amount is fair in this case. What would make sense to me is getting an independent auditor or citizen group to figure that issue out to see if there can be some middle ground.


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