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Final 'coffee fund' case ends with plea agreement

Published: Thursday, June 20, 2013 11:33 a.m. CDT • Updated: Thursday, June 20, 2013 10:44 p.m. CDT

(Continued from Page 1)

SYCAMORE – DeKalb County State’s Attorney Richard Schmack said his predecessor was too aggressive with the Northern Illinois University “coffee fund” scandal, after the last case ended with a plea agreement Thursday.

Schmack, who defeated former State’s Attorney Clay Campbell in the November election, said the nine people charged after an investigation into an off-the-books scrap metal recycling operation never should have faced felony charges typically punishable by up to seven years in prison. Campbell did not immediately return a call seeking comment Thursday.

Under Schmack’s direction, six of the cases were dropped and three ended with misdemeanor plea agreements. Seven of the defendants have returned to work at NIU, while one had retired before the charges were filed and the other is expected to return soon.

The coffee fund account maintained at Castle Bank was used for office retirement parties and similar expenses, NIU officials have said. The account accumulated at least $13,000 since 2005 and held $2,187 when it was closed in August.

Schmack said money was improperly diverted to the coffee fund, but was maintained by state employees and used for government functions, not personal gain.

“Some may disagree with the wisdom or prudence of governments using public funds for employee retirement luncheons, but until the state Legislature says otherwise, I do not think it is a crime,” Schmack said in the news release. “It is also not criminally wrong for an NIU department to maintain its own bank account, although it’s certainly not a good accounting practice.”

His office pursued the plea agreement for supervisors and dropped the charges against their subordinates, Schmack said.

“I do believe that the lack of any intent to steal is made clear by the precise and detailed records which were maintained by all those involved, regardless of who actually controlled the account,” Schmack said in the news release.

Schmack’s comments came in a news release issued after prosecutors finalized a misdemeanor plea agreement with Kenneth Pugh, 57, of Sycamore.

Pugh stipulated that prosecutors could have proven him guilty of a violation of the State Property Control Act, and was sentenced to a year of court supervision. That means no conviction will go on his record if he successfully completes the sentence. Prosecutors dropped felony charges of official misconduct and theft as part of the agreement.

“Mr. Pugh did not plead guilty; I think that’s an important distinction,” his defense attorney, Richard Larson, said. “He would not have been willing to plead guilty; he did not feel that he had committed a crime.”

Larson said NIU officials probably should have handled the cases as an internal personnel matter. The criminal case was stressful and embarrassing for Pugh, who has no criminal record and stood out “like a sore thumb” in the courtroom with other criminal defendants, Larson said.

“I think if the university, the university police and the prosecutor’s office had given a little more thought to the cost of these prosecutions on the lives of the defendants, they may not have handled it like they did,” Larson said.

He expects Pugh will return to work at NIU soon. Pugh, director of materials management, has been on paid leave since Aug. 29.

It’s a similar deal to those Schmack’s office finalized with Lawrence Murray, NIU’s manager of property control, and Robert Albanese, former NIU associate vice president of the Division of Finance and Facilities. Murray, 52, of Rochelle, was sentenced to 16 months of court supervision May 20 and returned to work June 1.

Albanese, 62, of Elburn, left the university July 31 after signing a separation agreement that said he faced unrelated “serious and substantial allegations of misconduct.” Albanese was sentenced March 18 to 18 months of court supervision.

At a glance

The three supervisors charged in the NIU “coffee fund” scandal accepted misdemeanor plea agreements. Here are the details.

Robert Albanese • Title: Former Associate Vice President of the Division of Finance and Facilities • Annual salary: $198,553 • Job status: Retired July 31 • Criminal sentence: 18 months of court supervision

Lawrence Murray • Title: Manager of Property Control • Annual salary: $53,818 • Job status: On paid leave from Aug. 29 to June 1 • Criminal sentence: 16 months of court supervision

Kenneth Pugh • Title: Director of Materials Management • Annual salary: $108,243 • Job status: On paid leave since Aug. 29 • Criminal sentence: 12 months of court supervision

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