The South San Luis Obispo County Sanitation District won’t seek a civil lawsuit against former administrator John Wallace, the district announced Thursday.
A legal analysis of the district’s case against Wallace, who was accused of conflict-of-interest violations during his 27-year tenure with the district, showed the statute of limitations on most of the claims against him expired in February 2017, district administrator Jeremy Ghent told The Tribune.
“This was an outstanding issue with the district that needed some closure,” Ghent said in a phone interview Thursday. “In my first few meetings, we talked about possible courses of action, what it might take to pursue action against Wallace.
“Looking at some of the data from the criminal case, it was clear there were some issue with the statute of limitations.”
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The San Luis Obispo County District Attorney’s Office filed felony criminal charges against Wallace in January 2017, saying he violated conflict-of-interest laws during his long tenure as district administrator.
The charges came roughly a year after an explosive 626-page-report claimed Wallace mismanaged the agency for close to a decade.
In March 2018, Wallace reached a plea agreement with prosecutors.
According to a Tribune report on the agreement, Wallace plead no contest to two misdemeanor counts of prohibiting public officials from negotiating contracts in which they have a financial interest.
He originally faced two felony conflict-of-interest charges and four misdemeanor counts of public official interference.
Under the deal, he paid a total of $59,724 to the Avila Beach Community Services District and South San Luis Obispo County Sanitation District.
At the time, Superior Court Judge Timothy Staffel said the plea agreement was in the best interest of all parties and said the prosecution’s case had “significant statute-of-limitations issues.”
“I think this is a just resolution,” Staffel said.
When considering what action it could take against Wallace, Ghent said those “statute-of-limitations issues” were at the forefront of the discussion.
“We knew that going in, but time was of the essence,” he said.
So the district approved plans to pay up to $5,000 for a legal analysis. Once it was clear that the statute of limitations had indeed passed, Ghent said the district stopped all legal work on it. Ghent said in total the district spent $5,215 on the analysis.
“At this point it’s not in the financial interest to pursue anything, so we made the decision to stop and make progress on projects we have ongoing,” Ghent said.
The analysis didn’t assess the strength of the case, or potential dollar recovery the district could have sought, Ghent said.
“We don’t know if we would have prevailed on any of those cases, or what the dollar amount would have been,” he said. “None of the potential cases are available to us.”
“My main takeaway off this is this was a big question that needed to be answered, and now that we have this answer, we need to focus on our other projects,” Ghent said.
In an email response to The Tribune on Thursday, Wallace’s attorney Kenneth White said his client “is pleased that the district has acknowledged this additional reason that any lawsuit based on his contracts would be meritless.”
“The district dictated the form of Mr. Wallace’s contracts and voted in public to approve that form based on advice from the district’s counsel many years ago,” White wrote. “Everything about the contracts was known to, and approved by, the district and the county at the time. Mr. Wallace has put this matter behind him and moved on in his distinguished engineering career and in community activities.”