HELENA - New Secretary of State Linda McCulloch has put a hold on issuing nearly $58,000 in "performance awards" that former Secretary of State Brad Johnson had authorized to be paid to his nine departing top appointees.
"This is walking-out-the-door money," McCulloch said Friday. "I've never heard of people getting performance bonuses when they walk out the door."
The checks, authorized by Johnson on Nov. 25, are supposed to be issued Jan. 14, but McCulloch questioned their legality. They were for 10 percent of the various individuals' annual salaries.
"We need to make sure we break no laws," McCulloch said. "If it's legal, then checks will be cut to them."
On Nov. 4, McCulloch, a Democrat, unseated Johnson, a Republican. When she took office Monday, McCulloch said she was surprised to learn that the payments would be made under her tenure.
McCulloch, who spent the previous eight years as Montana's superintendent of public instruction, said she never approved such performance awards to departing staff members and wasn't aware of any elected officials who did.
"It's one thing if it's performance-based and if it's targeted to specific work that benefits Montana," she said.
As superintendent, McCulloch said she would give a staff member a $100 award or a couple of days off for extraordinary service on a project, but it all had to be documented in lengthy forms.
Johnson said his office determined the performance awards were legal, and he said believes other elected officials have issued similar awards. That could not be immediately confirmed with state officials.
"Bottom line is this: That team did a remarkable job serving the people of Montana," Johnson said. "I do not apologize for a minute for those performance awards. We did extensive research before they were granted and believe they were appropriate and legal."
Johnson voiced disappointment that McCulloch didn't just call him instead of politicizing it, saying that would be "the professional thing to do."
Johnson's chief deputy, Ralph Peck, left a voice mail on the phone of McCulloch's chief deputy, Harper Lawson, saying here will be a lawsuit if the checks aren't forthcoming.
Peck told Lawson there's "going to be one hell of a row" if the checks aren't issued to the nine people on Jan. 14. He questioned McCulloch's legal authority to stop the checks.
"We don't need this kind of thing, but if that's the new position that your boss wants to take, I guess that's up to her," Peck said in the message. "But, of course, there will be damages and all those kinds of things, and she'll be on the front page for a long time, along with Brad. I'd sure like to avoid that kind of thing if I could."
Later, Peck said in the voice mail: "So if those checks don't show up on the 14th when they should, this is going to get really nasty, and I don't want to go there."
On Nov. 25, Johnson directed Peck to adjust some pay retroactively of his appointed staff and to give them performance awards "in recognition of the superior performance, service commitment and dedication provided to the state of Montana," according to a memo from Peck to Johnson that recapped their conversation.
The individual performance awards ranged from $3,502 to $8,755.
Upon learning of the payments, McCulloch immediately notified the Legislative Audit Division. The division's attorney said she didn't see a problem with McCulloch's holding the checks until it's determined whether they're legal, the secretary of state said.
McCulloch's attorney, Jorge Quintana, issued a memo concluding that she had the right to hold the checks until a legal determination is made.
Her office has also asked the state Department of Administration, where the State Personnel Division is located, for a legal opinion.
Sheryl Olson, deputy administration director, said an agency lawyer is examining the issue.
Johnson said state law prohibits severance pay being issued, but the performance awards are different.
"It was the appropriate thing to do, given the way those folks had served," he said. "This office had run better over the last four years than any secretary of state office for decades."
Tabbed for the performance awards were Janice Doggett, $8,755; Stan Ullman, $8,240; Jean Branscum, Jeff Garrard, Bowen Greenwood, and Peck, all $6,695; Susan Ames, $5,431; Lynn Staley, $5,271; and Stephanie Hess, $3,502.
Peck worked half-time as chief deputy. His award was set equal to the office's deputies.
Lisa Kimmit, Johnson's elections deputy, turned down her $6,695 award. She was the lone person from Johnson's appointed staff to be retained by McCulloch.