State approves money for lawyer to defend controller Augustine

Wednesday, Oct. 13, 2004 | 8:39 a.m.

CARSON CITY -- The state Board of Examiners on Tuesday approved a contract for up to $40,500 to hire a Reno lawyer to defend Controller Kathy Augustine against a sexual harassment lawsuit.

Attorney General Brian Sandoval said Augustine asked David R. Gundy to represent her against the lawsuit filed by her former Chief Deputy Art Ingram who is now on active military duty in Germany.

The attorney general's office cannot represent Augustine because it will be part of the prosecution in the impeachment trial of the controller in the Legislature, due to start in mid-November.

Sandoval said Grundy was a "top insurance defense lawyer" and the fee was reasonable.

Ingram, in his federal court suit filed in Reno in June, alleged that he resisted the sexual advances of Augustine and as a result he was reprimanded and suffered in his job. He says restrictions were placed on him in the office, he was threatened with a letter of insubordination and his duties and responsibilities were limited.

Augustine denies the sexual allegations.

Ingram is on duty in the Army as a lieutenant colonel in Germany and has extended his tour by one year. Augustine told investigators for the state Attorney General's Office that Ingram had caused problems in the office and that if he returns he must "demonstrate dramatic improvement" or he will be subject to demotions, suspension and termination.

He alleged Augustine touched him "in an overtly sexual manner," attempted to kiss him, demanded a hug from him and lifted her shirt and exposed her skin and her bra.

Augustine said "it is ludicrous for Mr. Ingram to even suggest I would lift my shirt and show him my bra or make sexual advances towards him" She said his behavior "became so erratic and unpredictable inside the office and out" that he was not extended any invitations to social functions.

She said she may have hugged him but added she hugged women in her office if they are having a bad day. She said there was nothing "improper or had sexual undertones."

She also said she gave him a kiss on the cheek when they were attending a political function in Elko. But she said it was harmless and it was merely to thank him for accompanying and driving her to Elko. There was nothing that "could've been constructed as sexual advancement," she said, noting that she was married at the time.

In other business, the examiners board approved a $23.5 million contract to hire Catalyst Rx of Las Vegas to operate the state's Senior-RX, a program that provides low-cost prescription drugs to about 9,300 low-income senior citizens. Catalyst, a publicly traded corporation, operates other health and drug programs in Las Vegas and other places including Louisiana and Washington, D.C. The state Department of Human Resources selected Catalyst from three bidders and the contract starts Jan. 1.

The board also approved a $1.6 million settlement for a 10-year-old boy who was severely beaten by a state-licensed foster parent in Washoe County. The child was three years old at the time of the beating. The terms of the settlement were sealed but Deputy Attorney General Charles Hilsabeck told the board the assailant was now in the state prison in Ely.

A spokesman for the attorney general's office said the boy was now a "vegetable" because of the beating and needs constant medical attention.

Board Chairman Gov. Kenny Guinn wanted to know how much the attorney for the youngster would get from this settlement. He said the state was still required to make sure the boy was treated correctly. But Hilsabeck said that was between the lawyer and the client. He said any fee for a lawyer would have to be approved by District Judge Jim Hardesty.