Blunt trial ready for jury

BISMARCK — Closing arguments in the trial of former Workforce Safety and Insurance CEO Charles “Sandy” Blunt were scheduled for 12:30 p.m. today after the defense rested and prosecutors called one rebuttal witness this morning.

Following arguments, the jury will get the case and begin deliberations.

The trial is in the Burleigh County Courthouse in Bismarck. The trial began Monday.

Blunt, CEO at the state workers’ compensation agency from mid-2004 to December 2007, is charged with two felony counts of misapplication of entrusted property.

This morning, WSI general counsel Jodi Bjornson was the only witness, testifying first for the defense and then as a prosecution rebuttal witness. She had been subpoenaed by both sides.

Bjornson testified that she kept notes during the fall of 2006 when WSI was the subject of a state performance audit because she wanted to protect herself. She said she was concerned that Blunt was making statements about advice she had given him in some instances, when she had not given him such advice.

One day, Blunt came to her office after he met with state auditors and made a comment “that shocked me” because “I had not given that advice… there were words put in my mouth,” she said. The subject of what Blunt said to Bjornson that day was not disclosed at the trial.

“I felt like I needed to do that (keep notes) to protect myself (because of) concerns surrounding the audit and concerns about Mr. Blunt’s well-being at the time,” she said. She said that Blunt’s demeanor about the time the agency was responding to auditors was “troubled, unstable.”

Bjornson also wrote in her notes that Blunt intended to blame three employees or managers at WSI for the negative outcome of the audit: Tammy Dolan, who was finance director at the time; Barry Miller, who was the internal audit manager at the time, and Angie Scherbenske, a procurement officer. Scherbenske quit WSI in November 2005 because, she testified earlier in the trial, she was uncomfortable with the way WSI upper management made purchases that she thought weren’t legal. Neither Dolan nor Miller work at WSI now.

When Scherbenske left WSI, she had an exit interview in which she told Human Resources Director Billi Peltz about her concerns that improper spending was going on. Peltz informed the state Budget Office’s Risk Management Division, which conducted an investigation concluding WSI was not following laws, state rules and policies on state agency spending. The state Auditor’s Officer came in shortly thereafter to look into procurement and other issues.

Bjornson said Blunt sometimes proceeded with actions against her advice, but other times did follow it.

Bjornson testified for the defense that she did, indeed, give Blunt a legal opinion in October 2006 saying a former manager at the agency did not have to repay nearly $8,000 of the moving expense reimbursement he had received after moving from Ohio to Bismarck. Dave Spencer worked at WSI for about 18 months before he was told to resign or be fired. A letter he received when he started work there said that if he quit before two years, he would have to repay half those expenses.

Bjornson testified that, in checking state law, state budget policy and WSI policies, she found ambiguities.

“I recommended my client not pursue it,” she said.

Because WSI funds are part of state government, prosecutors allege nearly $50,000 in expenditures that Blunt approved are covered by laws that prohibit spending of public funds for private benefit, including the unrepaid moving expenses.

Bjornson also testified that she took part in the office’s discussion about the necessity of Spencer being let go due to the way he treated his staff.

“Were you concerned he was creating liability issues?” asked Burleigh County Assistant State’s Attorney Cynthia Feland.

Cole works for Forum Communications Co., which owns The Jamestown Sun.

“Yes,” Bjornson said.

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