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What Atherton Could Have Settled for in the John Johns Case

Original post made by seeing red, Atherton: Lindenwood, on Apr 28, 2010

Here is the inside story of Atherton’s most recent financial catastrophe:

In April 2008, John Johns lost a battle to suspend discovery on his wrongful termination suit against Atherton until the District Attorney completed it criminal investigation of Mr. Johns on allegations that he used town time and property while moonlighting as a consultant.
At the time Mr. Johns was working as a Director for KPMG LLP, a “big four CPA” firm. He was distressed at the prospect of being indicted. He feared the loss of his job as a result of the negative publicity that would ensue. He feared the crushing financial burden of having to defend himself in criminal court, all the while trying to feed his family and trying to make the mortgage payments without an income.
Mr. Johns was at a low point. He authorized his Attorney to settle his case in exchange for a $10,000 payment and a letter from the Town to the District Attorney advising the District Attorney that the Town was not interested in seeing Mr. Johns prosecuted. What motivated to settle the case so cheaply was that he received an assurance from one member of the City Council that if the Town wrote such a letter, the District Attorney would deem it not to be in the public interest to prosecute him.
In response to Mr. Johns’ overture, the Town countered with an offer of $1,000 in cash and a statement that it would cooperate with the DA in the criminal matter. In short, the Town reneged on the offer it extended to him through back channels.

It is not known what prompted the City to reverse its position and to adopt such an agressive posture. It may have been hatred towards Mr. Johns by Marsala, Janz and Carlson, or it have been hubris.
The end result was that John Johns decided to hunker down. He dismissed his lawsuit while retaining the right to re-file at a later time. Mr. Johns who still had friends at town hall also gathered the records necessary to vindicate him. He contacted his former finance assistant and asked her to run a report from the Town’s financial management system documenting the date and time worked on the general ledger.
This report, slipped to Johns on the sly, turned out to be the Town’s undoing. The report provided a clear indication that Johns was where he said he was, at his desk working from 9 am to 5 pm and occasionally on nights and weekends. There was no way the DA could win a conviction against Mr. Johns, the evidence exonerating him was overwhelming.
What was most shocking about this episode is that the Town, knew full well or should have known that the charges against Mr. Johns were false. This is the case because Johns used the information in the Town’s possession to prove he was innocent of the charges against him. Somehow when the Atherton Police Department seized his computer and raided his office, it overlooked the evidence that would prove Mr. Johns was no criminal.
What was even more shocking about this episode is that when the Town knew the criminal charges of moonlighting on Town time and property were going nowhere, it tried to pin additional charges on him, including credit card fraud and the theft of cash receipts.
These complaints went nowhere as well because there was no evidence to offer in support of the charges. The only thing the DA had to go on was the word of a former employee of the Atherton Building Department who held a grudge against Mr. Johns.
After the District Attorney declined to file a criminal complaint against John Johns, he started his counteroffensive. He filed a mandamus for reinstatement.
Rather than attempt to settle with the Johns, the Town expended an additional $400,000 to defend itself, only to pay out $225,000 and to issue a letter of commendation.
These are the kind of decisions being made in Town hall. Public funds are being expended to crucify an honest public servant. Good money is then being thrown after bad to defend actions that are indefensible.
These are how our tax dollars are being spent. You should be outraged. You should, as do I, see red.

Comments (13)

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Posted by Jon Buckheit
a resident of Atherton: West Atherton
on Apr 28, 2010 at 10:43 pm

I think it is disdainful that $615,000 of our money was wasted on this vendetta. What did it accomplish? I do believe anyone who voted against a $10,000 settlement with Mr. Johns needs to step forward and explain his or her irresponsible vote.

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Posted by Colleen Anderson
a resident of Atherton: West Atherton
on Apr 29, 2010 at 1:21 am

Did the money come out of tax payers dollar or insurance? $625,000?

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Posted by John P. Johns, CPA
a resident of another community
on Apr 29, 2010 at 7:44 am

Seeing red has provided a thorough, accurate and well written account of what happened.

I appreciate the time taken to tell this story on my behalf.

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Posted by bean counter
a resident of Atherton: Lindenwood
on Apr 29, 2010 at 9:57 am

The money and legal fees were paid out of Town reserves. This loss was not insured.

The next time Jerry Carlson asks the questioin "When did we go broke?" The short answer is, "when you people at the top let your egos get in the way of making good business decisions".

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Posted by colleen Anderson
a resident of Atherton: West Atherton
on Apr 30, 2010 at 10:06 pm

Did it ever go public you offered to settle for 10,000. I heard about it after it was to late, and am just now finding out what it really cost everyone. SAD. I am glad it is over. Not happy about what was spent when the town could have paid out 10,000 not 625,000.

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Posted by net
a resident of Atherton: other
on May 1, 2010 at 12:27 am

What is really sad, is that Mr. Johns got exactly two thousand five hundred dollars after paying his legal fees (for 3 years of hellish persecution)------so the only beneficiaries in monetary terms here were the lawyers------ and then of corse who ever had whatever motivation to put the hit out on him to begin about wasteful witch hunts!.....and all paid for from the public trough.

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Posted by POGO
a resident of Woodside: other
on May 1, 2010 at 12:38 am

net -

How do you know how much Mr. John's netted from his settlement? How do you know how much he paid his attorney?

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Posted by drag-net
a resident of Atherton: other
on May 1, 2010 at 1:04 pm

I've known John well for years and went through a lot of this night mere with him as a horrified witness.
The first attorney got 50 for not much--he was terribly busy writing something for publication on the wonderful history of San Mateos' District Attorney's Office--not kidding about this.
The second one I've never spoken to--but seems to have honestly earned every penny of the next 150 - plus 10% of the top for another 22.25.
So after that is 222 .25 right? Out of 225,000. So I guess John got $ 2,750.00 and the letter of recognition for service to the town---after paying for his own legal fees.

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Posted by POGO
a resident of Woodside: other
on May 1, 2010 at 1:35 pm

I'm surprised at your level of knowledge.

You know, I didn't share the details of my legal bills with members of my family and yet you seem to know Mr. Johns bills to the penny.

Very curious.

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Posted by drag-net
a resident of Atherton: other
on May 1, 2010 at 2:24 pm

Well, technically I am only guessing --but the guess is based on paying very close attention trough out the whole ordeal, with genuine concern for John, and with the hope actually, that he would be financially able to go all the way to trial. My fear was that no real benefit to himself or society, or lessons learned for this Town, would come of it all if he wasn't able to.
I must add that you own rare interest and keen eye in the Johns matter has been a great source of hope to the lonely few that were closer to this terrible episode--and it has been, and is, most appreciated. Thank you for this Mr. Pogo and while I am at Thank you also for your attention to many other matters discussed on this forum.
I regularly wish that you would run for office or sign up for the civil grand jury--but please do at least keep paying attention and stating your views here.
I am a friend of Johns and am still very mad about what happened--also I really do believe that 2,750 is very close to spot on.

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Posted by another friend
a resident of Atherton: West of Alameda
on May 1, 2010 at 4:07 pm

Johns was never in it for the money. He just wanted his reputation back.

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Posted by drag-net
a resident of Atherton: other
on May 1, 2010 at 4:16 pm

While the approximation of net to Mr. John's described in the above posting may be only an estimate--it should surely serve as irrefutable proof that for him, this process was never about the money. All readers of this thread should be asking themselves what their own net take away from this ordeal has been.
I believe that no one gained anything except the people originally cited in his audit and a bunch of attorneys. Balance this against all that has been lost. When I have a few hours I will post my own estimate of the loss ledger for review. It is a very long list and still growing.

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Posted by drag-net
a resident of Atherton: other
on May 1, 2010 at 5:51 pm

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Sorry, but further commenting on this topic has been closed.

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