BURLINGTON — The Vermont Supreme Court has upheld a lower court ruling that found a former city employee can’t be held liable for $17 million improperly spent to prop up Burlington Telecom.
The unanimous decision released Friday found there was no evidence former Chief Administrative Officer Jonathan Leopold acted in bad faith when he started borrowing from the city’s general fund in 2007 to cover the telecommunications utility’s operating costs.
Using public money to pay for BT violated the terms of Burlington’s 2005 certificate of public good from the Public Service Board, which regulates utilities in the state. Leopold has said he was unaware of that restriction until a city attorney informed him in November 2008.
Leopold then waited months before informing the mayor and City Council. The plaintiffs in the case the high court addressed, former City Councilors Fred Osier and Eugene Shaver, argued that Leopold’s actions amounted to fraud and he should be held personally liable for the $17 million in taxpayer money spent on BT.
However, the Supreme Court ruled that to hold a municipal employee personally liable for improper spending, there has to be evidence the person acted in bad faith.
“There was no self-dealing, no effort by Leopold to line his pockets or those of his friends, and no inappropriate motive,” Chief Justice Paul Reiber wrote for the court. “To the extent that Leopold permitted payments for BT to continue after November 2008, he did so because he believed it was necessary to keep BT in operation.”
Osier and Shaver brought the lawsuit on behalf of taxpayers in 2009. The city was initially also named as a defendant but was later dropped from the suit.
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