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Across the Region: County faces bankruptcy after jury awards $30M


County faces bankruptcy after jury awards $30M

It started with a murder, was followed by a botched trial and has ended with a small Nebraska county facing a $30 million judgment it can’t possibly pay.

Now the farmers and small town residents of Gage County find themselves on the brink of a rare public bankruptcy, and wondering about possibly selling off the county’s road equipment, public buildings and few other assets to pay down the debt.

“It’s just devastating,” said Darrell Fletcher, who owns a carpet store in the county seat of Beatrice. “It’s going to affect the whole area — businesses, farmers, you name it.”

The county’s problems stem from the horrific rape and killing of 68-year-old Helen Wilson in 1985 and the conviction months later of three men and three women who spent decades in prison before DNA evidence exonerated them and implicated an Oklahoma man who died in 1992. Those wrongly convicted filed a federal lawsuit claiming investigators recklessly worked to close the case despite contradictory evidence, and last July, a federal jury awarded them $28.1 million, plus additional money for attorney fees.

Unless the verdict is tossed out on appeal, which experts say is unlikely, the county will be ordered to immediately pay the $30 million.

That’s a mind-boggling prospect in a rural county of 22,000 residents that collects only $8 million in taxes a year. The county, on the Kansas border about a 90-minute drive from Omaha, is mostly cropland.

Bankruptcy is “definitely an option on the table,” said Myron Dorn, the county board’s chairman, but it’s not clear how that would work.

Only a handful of cities and counties have sought bankruptcy protection in the nation’s history. The biggest was Detroit, in 2013. Bankruptcy is normally out of the question for cities and counties because, theoretically, public jurisdictions can raise taxes to pay off their debts.

But Nebraska’s constitution caps how much revenue can be raised from property taxes, and Gage County could raise only about another $3 million before hitting the legal limit. Although residents could vote to go higher, chances of approval are slim in a place where median household income is about $35,000 and farmers are struggling with low commodity prices. Don Schuller, a 61-year-old farmer, said paying off the judgment in one year would cause the county portion of his tax bill to quadruple.

“I think for a lot of people in Gage County, the unknown is the part that’s giving them the most stress,” Dorn said. “We get all kinds of questions about what’s going to happen. And, well, we just don’t know yet.”

When Detroit faced bankruptcy, it had valuable assets like the art in the city’s art museum, although private donations helped avert a sale of masterpieces.

In Gage County, the assets consist mostly of the courthouse, bridges and roads.

“You need those things to keep the county functioning,” said Larry Dix, executive director of the Nebraska Association of County Officials.

Attorney General Doug Peterson has rejected the idea of a state loan, and the county’s insurance companies say the judgment isn’t covered.

“I just hate the thought of them holding the citizens accountable for that money,” said Nick Jurgens, who owns a computer repair shop on Beatrice’s main drag. “It wasn’t really any of our faults.”

But Jeffry Patterson, who litigated the case for the wrongly accused, said it has to find a way to pay up. “Some of our clients are not in good health, and I’d really like to see them reap some benefit,” he said. One of the six died in a factory accident in 2011. He declined to make the others available for an interview, saying they want to be left alone.

If Gage County files for Chapter 9 bankruptcy, it will follow the path taken by Jefferson County, Alabama, in 2011. Jefferson County had to lay off employees, close a hospital and sell a nursing home, among other assets, to defray a $4.2 billion debt.

Gage County has little to sell.

“Wow,” said David Carrington, a commissioner in Jefferson County. “They’re in real a mess.”



ACLU sues Milwaukee police over stop-and-frisks

The Milwaukee Police Department is operating a stop-and-frisk program that mostly targets black and Latino residents who are often detained without cause, the American Civil Liberties Union of Wisconsin alleges in a lawsuit filed Wednesday.

The federal lawsuit was filed on behalf of six black and Latino plaintiffs who say they’ve been stopped once or multiple times since 2010 without a citation or clear explanation. The lawsuit alleges the stop-and-frisk program is citywide but is concentrated in areas largely populated by minorities, including the predominantly black neighborhoods in the north of the city, creating a “deepened public fear of and alienation from” the police.

Police Chief Edward Flynn has suggested that increasing the number of stops in certain areas will disrupt and deter crime, the lawsuit alleges.

It asks the court to order the police department to immediately end the program and to declare that department is violating the 14th Amendment’s equal protection clause and the Fourth Amendment’s protection against unreasonable searches and seizures.

Flynn denies his department has a stop-and-frisk policy, though he maintains that traffic stops in “high crime areas” reduce crime.

“No discussion of our crime tactics is complete without reference to the hyper-victimization of disadvantaged communities of color by high rates of violent crime,” Flynn said in an emailed statement. “But MPD considers it our moral duty to confront violence where it occurs.”

The lawsuit also names the city of Milwaukee. A spokeswoman for Mayor Tom Barret didn’t immediately return a call for comment.

“What we’ve uncovered by talking to people in the community and looking closely at plaintiff’s experiences is that the Milwaukee Police Department is running a vast, unconstitutional stop-and-frisk program that subjects people to law enforcement encounters without reasonable suspicion of criminal activity and based on their race and ethnicity,” said Nusrat Choudhury, an ACLU attorney.

The ACLU has challenged similar police initiatives in Boston and Chicago over racial-profiling concerns. New York halted its stop-and-frisk policy in 2014 after a federal judge ruled it unconstitutional.

The number of traffic and pedestrian stops in Milwaukee rose from 66,657 in 2007 to 196,434 in 2015, according to police department data cited in the lawsuit. The ACLU contends the stop-and-frisk directive began in 2008.

Figures the ACLU obtained from the police department through an open records request found that black people comprised 72 percent of the more than 33,300 pedestrian and traffic stops officers conducted between 2010 and 2012. Blacks make up about 39 percent of Milwaukee’s nearly 600,000 residents, according to 2015 Census data.

The ACLU’s analysis of those stops found that 41 percent lacked a clear explanation, with the reasons listed being “other,” ‘‘null,” or “suspicious circumstances,” ‘‘suspicious vehicle,” and “suspicious person.”

ACLU attorneys also contend that the department encourages quotas for stops. They cite a May 2016 letter from the police union to department supervisors about placing officers “in a very difficult situation.”

“Basically, stops must be made to preserve employment, rather than to facilitate public safety,” Milwaukee Police Association President Michael Crivello said in the letter, which claimed officers were being told to make two traffic stops per day or face discipline. Police department officials have denied a quota system exists.

One of the lawsuit’s plaintiffs is a 17-year-old boy who says he’s been detained without cause three times, including once when he was visiting a friend when he was 11. Another plaintiff is 60-year-old Alicia Silvestre, who alleges that two police officers pulled her over and followed her home to look through her purse and verify she had a driver’s license, which she didn’t have when they stopped her. She said she was not ticketed or told why she was pulled over.



Supreme Court splits on elder abuse law

In a split decision, the Iowa Supreme Court has ruled that age alone is enough to show a person needs protection from elder abuse under a state law enacted in 2014.

The ruling Friday comes in the case of Judith Chapman, 69, of Grimes, who successfully obtained an elder abuse protection order against her adult son, John Wilkinson Jr., in late 2014. Chapman had bought a mobile home in 2008 and later transferred title to Wilkinson, telling him that when she died, the trailer would be his inheritance.

After an adult daughter moved into the trailer, Wilkinson demanded $35,000 to transfer title back to his mother, according to court records. When she refused, he posted eviction notices on her door three different times, leading Chapman to seek the protection order. A lower court granted the order, and the Court of Appeals affirmed it.

On Friday, Justice David Wiggins wrote that the law defines a vulnerable adult as a person 60 or older who is unable to protect himself or herself as a result of “age or a mental or physical condition.” Three other justices agreed.

In a dissent, Justice Edward Mansfield was joined by Justices Thomas Waterman and Bruce Zager in saying there was no evidence that Chapman was unable to protect herself because of her age. The dispute, the dissent said, should have been worked out in a title proceeding.

An attorney for Wilkinson, Carmen Eichmann of Des Moines, said the case is likely to get the attention of the Iowa Legislature, which she believes should tweak the language in the fairly new law to show that a person must show he or she cannot protect themselves from abuse, and not simply declare that being older than 60 entitles them to the protection.

“The bottom line here is, having a normal, working man be declared an elder abuser — I think the dissent made it very clear how significant that is,” Eichmann said. “That’s a sad thing here.”

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