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City of Englewood facing allegations of embezzlement, backdoor deals and breaking the law

Posted at 9:30 PM, Nov 08, 2018
and last updated 2018-11-09 00:32:02-05

ENGLEWOOD, Colo. -- Allegations of embezzlement, back door deals and breaking laws surround the City of Englewood adding to the rough year the city has faced after a deadly flood that overwhelmed an aging drainage system.

Tempers flared at a Monday night study session and city council meeting. City council members Rita Russell and Laurett Barrentine were vocal about the questions they’ve been asking and the research they’ve been doing on the city’s financial situation.

"Then this council sits here and doesn't do their homework and chastises the other council members that do," said Russell in regards to a comment another council member made.

JJ Margiotta is part of the group Englewood Citizens for City Transparency, a group alleging a whole lot of wrongdoing by current and former city leaders over the last two decades. He is currently involved in litigation with the city regarding a different matter.

"Our city laws are being broken left and right," said Margiotta. "There's (sic) people living very well when the rest of the city is paying the price."

Margiotta alleges mismanagement of funds, embezzlement, backdoor deals, and much more. 

"I’ve got millions of dollars sitting right here that nobody can give me any answers on," said Margiotta in reference to documents he’s requested from the city.

The mismanagement problems may have been obvious during the July flood that took a woman's life. The aging drainage system couldn't hold up and dozens of residents told Denver7 they had been asking the city to make much needed improvements.

"Why wasn't the money allocated for the infrastructure to do these repairs?" said Margiotta.

He's asked for copies of the city's financials several times under the Colorado Open Records Act (CORA) and told Denver7 he’s been given incomplete documents every time. He is interested to know who is getting paid to do what.

"There's zero oversight. Anybody can send in an invoice and get it paid without anybody's approval because there was nobody checking it."

He believes it started in 1997, when the city created two separate corporations that were still governed by a few city staff. The Englewood Environmental Foundation (EEF) and the Englewood McLellan Reservoir Foundation were formed to handle city-owned property and to manage development and remediation on certain sites, but Margiotta claims it was to skirt the law.

"They've not paid any taxes on any of the income they've had for 21 years. So are you exempt or are you not tax exempt? Are you a separate corporation or are you not a corporation? It depends on what day you ask and who you ask?" said Margiotta.

City council member Barrentine also started to ask questions and she told Denver7 she was met with retaliation in the form of a recall election, that she survived. At the Monday night meeting, she engaged in a fiery exchange with the lawyers representing the separate corporations.

At the end of the meeting, it’s clear council wants an audit, something Margiotta supports.

"All we are trying to do is actually make it a better city, find out where the problems are, move forward and hold people accountable,” Margiotta said. 

Also discussed at the meeting was the possibility of city council members transitioning to also become the new board of EEF, to better deal with the scrutiny being placed on the corporation. The council members had mixed reaction about the proposal. 

Denver7 contacted the spokesperson for the City of Englewood and the offices of the Englewood Environmental Foundation for interviews. The interim city manager provided the following statement:

The City Council will continue the discussion about EEF next Tuesday, November 13, at the Study Session.

The study session will begin at 6:00 pm. The EEF discussion is the third item on the agenda for that evening. City Council will discuss with staff any recommendations about the current or future status of EEF. This is an open meeting, all are welcome to attend.