In what appears to be a sworn declaration signed less than a month before he died, former Eureka City Councilman Lance Madsen claims Eureka City Attorney Cyndy Day-Wilson lied to him and tried to get another city hall employee to do the same in an effort to cover up her allegedly distributing a confidential and explosive memo to city employees.

The declaration and an accompanying six-page investigative report, both of which Madsen apparently made a top priority during the last months of his battle with lung disease, were delivered by certified mail to the city on June 5 by Daniel Cooper, Madsen’s probate attorney. Together, the documents shed new light on an apparently toxic environment in city hall and a rift on the city council. And they raise serious questions about Day-Wilson’s honesty, ethics and job performance.

“Mr. Madsen requested that I provide this information to the city council after his death so that its present members would follow through on the investigation his declining health prevented him from completing,” reads a cover letter to the city from Cooper. “Mr. Madsen’s request also directed that I allow his family ‘private time’ to grieve and adjust to his passing before this affidavit was delivered to the city council.”
Madsen, who resigned his post with the council in December due to his prolonged battle with lung disease, was in hospice care when he signed the affidavit on March 6. He died April 5.

A two-time council member who was awarded the city’s first ever Mayor’s Community Service Award of Merit, Madsen was also a former cop and detective, and it shows in his investigation report. At issue was the handling of a memo penned by former City Manager Bill Panos and emailed to city council members on Oct. 4, 2013, Panos’ last day in office after just nine months on the job. The email — which the Journal has requested a copy of, a request that’s currently pending city review — was critical of some department heads and included suggestions to the council for future planning, according to Madsen’s report.

Madsen says he was immediately concerned upon opening the email, which was marked as confidential and dubbed a “reorganization blueprint.” Madsen says he stopped reading the document after its first line: “The information contained in the document is confidential as it involves personnel matters. As such, please use discretion with the information in this email and attached document.” In his declaration, Madsen wrote that he still had not read the rest of the email or the attached ‘reorganization blueprint’ at the time of signing the affidavit.

“Because of my health and resulting absences from the city and city hall; I was not aware of how divisive [Panos’ email] was to the council and until the latter part of October, I was not aware that it had been released to staff,” Madsen writes, adding that he began hearing “mutterings about the document” from city employees the week of Oct. 20.

On Oct. 30, Madsen says he sat down with City Clerk Pam Powell, who told him that “almost everyone in City Hall was aware of the documents and had knowledge of at least the essence of its contents,” adding that she believed city Personnel Director Gary Bird had a copy, or had at least seen one. Madsen says he then spoke to Bird.

Madsen says Bird told him that he was sitting in his office with Community Development Director Rob Wall discussing the “rumored email document” from Panos. As their meeting broke up, Bird said they ran into Day-Wilson at the office’s front counter, where she was “collating a document into several stacks.” Bird said, according to Madsen, that Day-Wilson told he and Wall to “hold up,” that she had something they needed to see.”

“She took them into Gary’s office,” Madsen says. “She gave a copy to Gary and she started reading or referring to statements about Rob from a separate copy at which point Rob asked for a copy and was provided one.” The three continued to discuss the document for a period, according to Madsen, then left, each with their own copy. Bird told Madsen, according to the declaration, that Day-Wilson “was clear to them that it was not a confidential document but a public document because of its email delivery and it did not qualify as such under personnel matter rules.” Nonetheless, Bird said he shredded the memo after reading it.

The following day, Madsen met with Day-Wilson in her office and asked her directly how she got Panos’ memo. “She was hesitant to give me an answer,” Madsen says, adding that he pressed, noting that as a councilman and one of Day-Wilson’s “five bosses,” he had a right to know. Madsen says Day-Wilson then told him that Mayor Frank Jager “already knew,” and that it was Councilwoman Melinda Ciarabellini who provided her with the copy. “I expressed that was unfortunate,” Madsen says, adding that he and Day-Wilson then discussed the memo, which she felt was “very negative about her and a number of department heads.” Madsen says Day-Wilson told him she was unsure how the memo got distributed to other staff members, adding that her copy was in Bird’s personnel files, “locked away with a hostile workplace complaint filed on (Day-Wilson’s) behalf by (Councilwoman Linda) Atkins .”

Madsen says he then went to meet again with Bird, who told him “the only copy of the document he had was the one he destroyed. … He said that a hostile workplace complaint filed on (Day-Wilson’s) behalf by Councilperson Atkins did not and had never existed. He further informed me that Councilperson Atkins had never asked for such a file to be created and only (Day-Wilson) could ask for such a file to be created, which she had not.”

On Nov. 1, Madsen sat down with Ciarabellini, who said she turned Panos’ memo over to Day-Wilson because she was concerned that the document could result in litigation by those named in it “and because the city attorney was one of those addressed in the document. Melinda did not express any knowledge as to how it had been distributed to staff.”

Madsen says that when he told Ciarabellini about Bird’s statements, “she said she didn’t believe it and clearly accused Gary of making the whole story up… she insisted that (Day-Wilson) would not have distributed the document.”

Feeling someone was clearly lying to him, Madsen then turned to Wall, who he interviewed on Nov. 4, according to his investigation report.

Wall told Madsen that he first became aware of Panos’ memo the night of Sunday, Oct. 6, when he got a phone call from an anonymous woman at his home. “This person told him about what she described as Bill Panos’ ‘hit list’ and that he held a prominent position on that list,” Madsen says. “She went into some detail describing the contents of the ‘hit list.’” Madsen says Wall told him the phone caused him to lose sleep that night. When he arrived at work the following day, Wall said it seemed like everyone at City Hall knew about the document and its contents, according to Madsen’s report. Wall said he then went and met with Bird. Following that meeting, Wall said he and Bird found Day-Wilson at the personnel counter and another meeting ensued. According to Madsen’s report, Wall’s recounting of events was the same as Bird’s, and he relayed that Day-Wilson had provided both men with copies of Panos’ memo.

Madsen says he then consulted an attorney specializing in human resources litigation, “Rick Bolzano’s,” who said the council should discuss the matter in closed session due to potential legal exposure over the document. “His advice was sought after it became clear that the city attorney could be one of the possible litigants as she had threatened lawsuits against the city in the past,” Madsen writes. “ The agenda item never got addressed as two council persons walked out in defense of the city attorney and in protest over using Rich Bolzano’s.”

While Madsen repeatedly refers to the attorney he consulted as “Bolzano’s,” there’s no one registered with the California State Bar Association by that name, nor “Bolzano” or “Bolzanos.” It seems likely Madsen was referring to Richard Bolanos, a partner specializing in city labor relations and employment law for the San Francisco firm Liebert, Cassidy and Whitmore. A call placed to Bolanos to confirm this was not immediately returned.

On Nov. 7, Madsen writes, he again sat down with Wall after receiving some new information. Madsen says he asked Wall to confirm that he’d met with Day-Wilson the day before. “He told me that a meeting had taken place,” Madsen says. “That the city attorney had entered his office that morning and told him that ‘he had to have her back.’” Wall, according to Madsen’s report, said the city attorney instructed him that if anyone asked him about seeing Panos’ memo, he should say that he had walked into Day-Wilson’s office on some other city business while she was not there, and that, while waiting for her to return, he’d found a copy of the memo on her desk and read it. “He told (Day-Wilson) he could not comply with her request as her story was not what happened and it was not the truth,” Madsen says.

Madsen also notes in his report that he spoke to Finance Director Paul Rodrigues about the document, which Rodrigues said he’d never seen. However, Rodrigues said he got a phone call from a former city employee, a female, in the days after Panos sent the memo to council members informing him of the “hit list” and its contents.

That concluded Madsen’s investigation.

“Consider this my dying declaration,” he writes in the report. “I do. I am dying and doubt I will see the far end of the estimated time span provided by my doctors; around April 1, 2014. The actual time is in God’s hands but I will be surprised if I am still here mid-March 2014. … I declare that everything in this document is truthful and correct to the best of my ability and I am aware of the potential ramifications it may have on the person(s) named within and as a practicing Roman Catholic, the impact it would have on my own after life. I do not do this out of any feelings of spite or some unresolved contest but solely out of concern for the people of the city of Eureka, its council and its employees.”

In closing, Madsen makes clear that he believes Day-Wilson was dishonest with him and attempted to convince Wall to lie on her behalf. “To lie to me as a sitting council person is to lie to the whole council and an attempt to further conceal the original lie is another act against the whole council,” he writes. “I believe the city attorney’s behavior was/is unethical and is a breach of good faith and of the contract with the council.”

Madsen also appears to have taken issue with the possibility that Day-Wilson informed Jager that she’d received a copy of Panos’ memo but not the city council. “The fact that she wanted to refuse to give me the source of the document and I had to be as assertive as I was surprised me,” Madsen writes. “Then she said that Mayor Frank Jager already knew as a part of the reasoning for telling me, which made me wonder for whom she was working. Seems like a charter issue was well as a contract violation. It is for that reason that I provide this document.”

Under the city’s charter, the city attorney works for and serves at the pleasure of the city council, of which the mayor is not a member. It appears that while Madsen specifically directed Cooper to send his report to the sitting city council, he did not ask that Jager be served with a copy.

If the information contained in Madsen’s affidavit and report is accurate, it seems the city would have little trouble firing Day-Wilson with cause for violating her duties, both in disseminating the confidential document to other city employees, and in lying about it and it and encouraging others to do the same. Further, according to University of California Hastings College of Law professor David Levine, the California State Bar could potentially take disciplinary action against Day-Wilson for violating the duties owed to her client if an independent bar investigation corroborated Madsen’s claims.

It’s also worth noting that Day-Wilson’s alleged stance that Panos’ memo was a public document simply because it was delivered to the council via email is completely inaccurate, according to Californians Aware founder and chief legal counsel Terry Francke, who said that would have no bearing on whether the document would be exempt from public disclosure because it dealt with personnel matters.

Panos — who resigned his post to take a position with the Wyoming Governor’s Office after just nine months on the job in Eureka — was a controversial figure in City Hall, esteemed by some and criticized by others as a micromanager who pushed to “modernize and streamline” city services by merging multiple city departments without having a firm understanding of how they operated. The push — which resulted in the merging of both the city’s public works and engineering departments, and its community development and building departments — reduced both the total number of city employees and the number of city boards and commissions.

Day-Wilson took Eureka's city attorney position in September 2011, coming to the city from San Diego. She also currently serves as counsel to the Humboldt County Fair Association.

So far, the Journal has been unable to independently verify Madsen’s role in creating the documents. Calls placed to Cooper and Madsen’s family were not immediately returned, but the documents appear to bear Madsen’s signature and contain Cooper’s notary public stamp. Numerous city sources have also confirmed that Madsen was conducting an inquiry into Day-Wilson’s conduct during the time period covered in the report recently submitted to the city.

Messages left for Panos, Day-Wilson, Jager and Councilwoman Linda Atkins were not immediately returned. Wall and council members Melinda Ciarabellini and Marian Brady declined to comment. Councilman Mike Newman said he can't say much about the situation, but said he knew Madsen was "working on something regarding things" and that the council will have to discuss the matter and the best way for the city to move forward.

Reached this afternoon, new City Manager Greg Sparks said the council has been in strategic visioning sessions recently and is really intent on focusing on the future direction of the city and the community. But, he said the council received Madsen’s letter sometime late Friday and is taking it under advisement.

“They haven’t directed anything as a result of this,” he said. “Obviously, they view it as an employer-employee issue and it’s probably a little bit of uncharted territory for a council to deal with when you have an affidavit from a deceased former council member. I think the council will be determining a course of action herein the weeks ahead.”

In both his report and affidavit, Madsen makes clear he is putting the ball in the council’s court.

“What I present to you, you can read, toss; act on it or ignore it,” Madsen says, adding that his health prevented him from seeing the matter through on his own and opening meeting laws prevented him from talking to each of the council members personally about it.

But, it’s also clear that Madsen felt some action should be taken.

“To me, a willful or malicious misrepresentation of the truth, no matter how artful the words used, is one of the acts of human behavior I hold in the lowest esteem,” he states in his report. “A lie told by a trusted employee in a position of power and responsibility should not be tolerated. … You can also be assured that the first lie will be followed by another and another, etc.”

The Journal will update this story as more information becomes available. To read Madsen's full affidavit and report, click   here.