Water district manager sued over credit card use
Austin American Statesman
by Molly Bloom

January 13, 2007- The general manager of a Bastrop County water district used a district credit card to buy a water heater and other items for her home and then fired the employee who reported her, according to a federal whistle-blower suit filed by that employee, former operations manager Paul Klaus.

Klaus filed suit in December against Karen Pinard, general manager of Bastrop County Water Control and Improvement District No. 2, and the district, which provides water and sewer services to Tahitian Village, a 2,000-house subdivision in Bastrop with an 18-hole golf course and Colorado River views.

In his suit, Klaus claims that the water district's board knew of the purchases by Pinard and declined to pursue criminal charges against her.

Between December 2005 and May 2006, Pinard used the water district's Home Depot credit card to purchase more than $400 in goods, including a water heater, a tool belt, a miter saw and a bathroom lighting fixture, said Craig Deats, Klaus' attorney.

"We don't know of any reason they would purchase a bathroom lighting fixture for a water control district," Deats said.

Pinard referred questions about the suit to board attorney Kyle Watson, who did not return calls seeking comment.

In September 2006, Klaus told the district's board of directors about the suspicious charges, according to the suit. Board Treasurer Bill O'Barr told Klaus he should do whatever Pinard asked, the suit says. The board would deal with the alleged credit card misuse, O'Barr said, according to the lawsuit.

Pinard eventually reimbursed the district for the water heater and said she will pay the state taxes she avoided by using the district's credit card for the purchase, O'Barr said at a Sept. 27 board meeting. The other items in question did not show up in an August 2006 audit of the district's inventory but were found in the district's possession soon after Klaus told the board about the charges, Deats said.

But Klaus is still out of a job. He had worked for the district for nine years and had received "uniformly positive performance reviews," according to his suit. But on Sept. 22, the day after the Home Depot charges were first discussed at a board meeting, Pinard fired him.

The basis for his termination was that Pinard had lost confidence in Klaus, according to his suit.

Pinard told Klaus that he should have brought his concerns about the alleged theft to her, rather than to the district's board, according to the lawsuit.

In his suit — filed in the U.S. District Court for the Western District of Texas, Austin Division — Klaus is seeking his job back, unspecified compensatory and punitive damages, and back pay.

The district has since changed its policy on the use of district credit cards, barring their use by employees for personal purchases. Using district credit cards for personal purchases could be abused by some employees, O'Barr said at the board's Sept. 27 meeting.