Report: Cash Missing from Palos Heights Building Department

A Palos Heights Police Department report describes an investigation into Building Commissioner James Dougherty, who was fired from his position earlier this month.

By Nick Swedberg
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August 28, 2012

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A report from the Palos Heights Police Department outlines an investigation into the City’s Building Department regarding the possible theft of cash collected from building fees.

The alleged missing money came to light after a Palos Heights official noticed a $2,000 discrepancy in the recording of fees collected from a homeowner on June 20 and approached police, according to the report obtained by Palos Patch.

Building Commissioner James Dougherty, who headed the department, was questioned by Palos Heights police and Cook County State's Attorney's investigators on July 27 regarding several cash transactions made with the department since January that allegedly had gone unrecorded, according to the report. Among other things, the report states Dougherty was asked about his relationship with department secretary Lisa Kean, who is also a part of the police investigation, and about prior criminal arrests, including a 2005 arrest in Downers Grove.

Both Dougherty and Kean were terminated from their positions with the City of Palos Heights earlier this month.

Mayor Bob Straz has declined to comment on specifics around the firings but has said there was “mismanagment, overall” in the department.

Attempts to reach Dougherty for comment through phone numbers listed with his Bolingbrook address were unsuccessful Monday afternoon. Neither he nor Kean have been charged in connection with the current Palos Heights investigation.

Cook County Assistant State’s Attorney Dave Coleman told Dougherty during the interview that he believed the building commissioner was keeping unreported cash collected from fines, according to the report. Dougherty denied the accusations and said he never handled cash or issued receipts in his time as head of the department.

The report outlines a transaction on June 20, where a Ridgeland Avenue homeowner paid $2,345 in cash for permit fees and building fines to City Building Inspector William Hayes, according to the report. The money was counted twice, first by Hayes and then by Kean, before a receipt was issued to the homeowner. The following day, the report states, Hayes noticed a file for the homeowner on Dougherty's desk with an unknown amount of cash inside. On that Friday, Hayes discovered a cash transaction of $345 had been recorded in the department's accounting program.

Dougherty denied ever seeing the receipt when questioned about it by Palos Heights police and representatives from the Cook County State's Attorney's Office on July 27. He also said he did not have any knowledge of cash being placed on his desk. In his time as building commissioner, Dougherty told investigators, he had never handled any cash and was only familiar with the department's accounting software.

When asked why there was no record of the $2,000 payment, Dougherty said "You'd have to ask Lisa (Kean)."

Investigators also presented Dougherty with a receipt dated Jan. 5 obtained from United States Alliance Fire Protection which showed fines levied by the building department totaling $700 that were paid in cash. According to the report, building department accounting records did not show receipt of the payment. Dougherty said he had no knowledge of this transaction either.

A third receipt found by investigators in City Hall records showed a $100 credit card payment from "Midwest Country" dated May 23, according to the report. A receipt found in building department records from Midwest County, also dated May 23, included a line that reads "Fines Code $325.00" and the handwritten note "cash" written below it—both of which are missing from the receipt found in City Hall records.

Kean later told investigators that she deleted the line "Fines Code $325.00" at the Dougherty's direction, the report states.

Investigators also questioned Dougherty about prior run-ins with the law, including a Downers Grove arrest from 2005 on a charge of retail theft and a 1974 arrest in Minnesota, during which Dougherty was accused of forging a check to the First National Bank of Minneapolis, according to the report.

Dougherty was also asked about his relationship with Kean and about what the reports states were emails "sent back and forth between the two parties regarding Dougherty's genitals" on July 17. The email exchange allegedly took place using Kean's personal email account and Dougherty's City of Palos Heights email address. Dougherty said the emails were a joke, according to the report, and that his relationship with Kean was entirely professional.

Kean, who interviewed separately, said she had altered receipts on Dougherty's instruction and was "concerned" about building department activities she was told to do or watch, according to the report.

While being interviewed, police searched Dougherty's office and found half-empty 750 ml bottle of Bailey's Original Irish Cream and a mostly full cup of Starbucks coffee, according to the report. The coffee cup was tested and came back positive for the presence of alcohol.

Dougherty had been the City's building commissioner for six years.

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Related Topics: City of Palos Heights and James Dougherty

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mom

6:48 am on Tuesday, August 28, 2012

This is only the tip of the Ice Burg. There is proboly more tax payer money abuse as far as the building commisione goes.. I wonder how honest he was when using his city privledges such as receipts for using the City vehicle and gasoline, city paid cell phone, expences, ect. All the officials should have an eye kept on them . They need to be accountable to the tax payers of this City. There should never be cash dealt between city officials ,builders, and homeowners. These kind of abuses can add up and hurt our City and it's taxpayers.

Jim Jones

9:23 am on Tuesday, August 28, 2012

Oh I bet there is a lot that went on. From spending the City budget like his own piggy bank between remodeling his office. He micro managed everything in that office so to claim he had no interaction with money is a load of bull.

Chronicles of Bob

7:59 am on Tuesday, August 28, 2012

Mom,
"How honest he was?" You're a 100% correct, there would be no doubt he used all the privledges to his benefit... And I know for a fact he handled cash, because I myself handed a good sum to him... So I know he is a liar about that. The article makes it sound like Hayes may have been the one to goto the police. If true, then good for him, as I bashed him before.

Billable Hours

8:18 am on Tuesday, August 28, 2012

Whistle blower or not.....Hayes still needs to stop busting residents' stones when they are attempting to do home improvements. He makes everything difficult!

Chronicles of Bob

8:02 am on Tuesday, August 28, 2012

Nick,
I'd be interested to know how a huy like this was hired? Who hires him, the alderman? Hired in 2006, so were background checks done? Guy has all kinds of criminal history, including an incident the year before his hire.
Just curious.

Nick Swedberg

11:20 am on Tuesday, August 28, 2012

Thanks for the ideas. I'll keep working on it.

Chronicles of Bob

1:36 pm on Tuesday, August 28, 2012

Thanks, and great job so far...

Palos Lifer

8:27 am on Tuesday, August 28, 2012

I agree with Bob regarding the background checks. I would think that anyone who comes in contact with money should be thoroughly screened prior to a hiring. And, I was surprised at how many people were paying cash for permits fees. This was a red flag for certain. A good practice is to require all fees be paid in check form. Unbelievable.

mom

8:45 am on Tuesday, August 28, 2012

I was made aware of things going on in the building dept as soon as this guy was hired. And I also know certain city officials tried bringing things to light about the building commisioner and nothing was done. Cronyism at it's best. Citizens should never deal in cash. I had heard of this guy's background along time ago and I am just a citizen. I would like to know who his boss is and why he is not being held responsible. This small town has too many chiefs and not enogh indians!!

mom

8:53 am on Tuesday, August 28, 2012

Oh and the drinking on the job is just aweful!!! What if this guy (under the influence) while on duty for the City hurt or killed someone while operating a City vehicle?? That would sure cost the tax payers of our city a prettty penny, not to mention our reputation and an injury to an inocent person!! The whole thing stinks!!

Jim Jones

9:18 am on Tuesday, August 28, 2012

"I got to be honest with you" was his favorite line. Which only makes you wonder was he not honest with you all the other times? As my mother always said, what comes around, goes around. He left the Village of Lemont with the same dark cloud over him and came into the City of Palos Heights with an attitude and acted like nothing but a bully. He made life hell for those that were there well before him and surprisingly enough none of them are there any more. The Patch should look into his history at Lemont and track down his former secretary at Palos. She would probably have enough insight into how he operated things at Palos.

Totally not surprised by the drinking. However, since he drove the City SUV back and forth from home every day and while on the job, it really makes you wonder HOW he got away with it for 6years!

I am not knocking Hayes since I do not know him. But Jim had been hell bent on cleaning house when he joined Palos and bringing in his own people. He bad mouthed the past employees which was uncalled for. If you have an agenda fine, but don't sully the careers of good people just for your own personal gain. Was Hayes one of his own? Did they work together in the past? I have heard several neighbors complaining about both Hayes and Jim giving them a hard time about work being done from non-preferred contractors. Makes you wonder if there was another scam going on there.

Good riddance Jim. It is nice to see a bully get his dues.

Chronicles of Bob

9:30 am on Tuesday, August 28, 2012

On behalf of all us Bobsters, I feel we should file a "FOIA" to find out what was in that genitals email...

Jim Jones

9:32 am on Tuesday, August 28, 2012

Good one, Bob! I am going to stab my eyes out now to get that image out of my head!

Billable Hours

9:41 am on Tuesday, August 28, 2012

Did someone say "head"?

Rock Bobster

9:47 am on Tuesday, August 28, 2012

COB, there's about this dufus' 'nads that is of interest to me!LOL

Perhaps the first thing to find out is how this guy got hired with criminal record for theft. Was it Straz or Koldenhaven? You remember mayor K, of course, the guy whose family owned a brick business that "mysteriously" provided the materials for the new Police Station. Was Chief Yott involved in this, since he was the "manager" for the project?

Another question was why these fines were paid in cash. Was there an "undertanding" that less would be fined if it was paid that way? Businesses just don't pay this kind of expense in cash, UNLESS there's something fishy going on.

I am concerned that the State's Attorney, rather than the US attorney, in involved in this investigation. SA Alvarez has never been known for prosecuting corruption, ESPECIALLY if the suspect is a Dem.

I can remember an investigation by the SA abut a decade ago into a local Palos School district after an admin wrote hunderds of thousands of dollars in checks to family members and the admins workers in his the side businesses he owned, but there was little documentation regarding what the purpose of those checks were.

The US attorney was chomping at the bit to get involved, but they don't interefere in ongoing States Attorney investigations.

The States Attorney kept their "investigation" open until the statute of limitations ran out.

If the guys connected to the Dem party, the same thing could play out.

Chronicles of Bob

9:58 am on Tuesday, August 28, 2012

RB, I agree with you!!!!
Honest question, different thread, but did you find out anything with 218 in terms of them being at a surplus yet still charging fees... That was the one point, (i stress ONE...lol) that I was curious about that you stated.

Billable Hours

9:48 am on Tuesday, August 28, 2012

I heard his computer screen saver would say, "Mr.Smithers you're good at turning me on"!

Chronicles of Bob

9:57 am on Tuesday, August 28, 2012

Lenny black, carl white...

Kathy

5:30 pm on Tuesday, August 28, 2012

I never dealt with the Building Dept before this year and I can tell you from experience what a grueling ordeal it was. Every time the builder went in with the required documents, they were told there were yet others that were needed. It was very frustrating.

It's no wonder that businesses don't flock to Palos Heights. Between trying to get plans through city council and dealing with our building department, it feels like we don't want them here.

Palos Lifer

9:36 am on Wednesday, August 29, 2012

Like Kathy, I recently had to work with the Building Dept. for the first time, and it was onerous. Worse, though, was dealing with Morris Engineering. The architect working on my project told me that it is easier getting work accomplished with The City of Chicago than it is with Palos Heights......quite an indictment. I'm going to ask my city reps to require a review of all work processes going on in the office of the City Administrator. This would include everything from the permit process to reviewing how contracts are decided with consultants. Time to clean things up. The citizens are supposed to be the customers of this department.

mom

8:13 pm on Tuesday, August 28, 2012

Kathy you are right on~!! Why don't businessess come to Palos Heights? I called the city administrator 4 years ago and he told me places like Corner Bakery and Trader Joes Don't come because of Palos Heights Geographics. That is a bunch of bunk. What could be better for a business: You have Harlem Ave, Rt 83 &, Ridgeland. There is a real reason why this town stinks as far as shopping and eating. I mean no disrespect to the existing businessess but how many times can you go out for Italian? I shop out side of this town and now since Dominicks does not honor the .3 off a gal of gas, I am buying gas else where. This sweet town has so much potential but no vision. And as a builder I have first hand pulled permits in this town and waited and waited . And as far as asking for an inspections there is nothing but waits. I am glad these problems have come to light and I hope the Mayor and Alderman are listiening. !!