Dennis Huston won a partial victory in court Tuesday when a judge ruled that parts of Franklin County's internal report should be turned over to his defense attorney.
County officials sought to keep the nine-page report private, claiming it's a confidential document that never was intended to be made public and is protected by attorney-client privilege.
The investigation, handled by two Seattle-area lawyers, was done at the county's request to determine whether co-workers and managers of Huston -- the former public works accounting and administrative director -- knew or should have known about his alleged embezzlement of almost $2.8 million in county funds.
John Jensen, who's defending Huston against criminal charges in Franklin County Superior Court, said he has yet to see the report despite repeated claims that it is relevant evidence in the case.
He has said he has a right to see all documents related to his client, especially after a copy of the investigative report was leaked to the Tri-City Herald and was the subject of a story.
Deputy Prosecutor Janet Taylor argued the report contains opinions because it was commissioned when the county needed legal advice on possible employee discipline issues and civil actions in the wake of his alleged financial misconduct.
Huston was not interviewed as a part of that investigation and the report does not rise to the level of evidence that could be used in the criminal case, she said.
But Judge Craig Matheson disagreed, asking what makes it any different than a police report. He questioned if the county looked into who may have given the private report to the Herald and asked how he is supposed to determine if privilege was waived if he doesn't know how the newspaper got it.
"If it got to the newspaper, then it should go to the defendant," Matheson said of the report, which was completed by Jim Webber, a Kirkland attorney who also does workplace investigations.
The judge ruled that Huston is entitled to the information compiled from interviews with county employees but not Webber's opinions on disciplinary actions against employees. He gave Taylor two weeks to submit the original report and a copy with redactions, both of which will be sealed in the file.
Matheson then will review it while behind closed doors and make the final approval of what is to be released.
Huston, 65, is charged with first-degree theft, money laundering and cocaine possession.
Officials suspect he took more than $2.8 million from the county since 1996 to support his cocaine and gambling habits. The charges, however, allege a conservative loss of $1.8 million.
He was arrested Feb. 2 and placed on administrative leave, then fired six days later by the county commissioners.
The same day Huston was jailed on the embezzlement allegations, the county hired Seattle attorney Suzanne Michael for legal advice on issues not connected to the criminal investigation. Michael then hired Webber to do an internal investigation of the facts and write up a report.
The report then was "addressed in private session with the county commissioners" but was not shared with anybody else, Taylor told the court Tuesday. "It is the county's position that the only way the county would waive privilege on this is via a vote of the county commissioners, acting in their official capacity."
The Herald in late September anonymously received a copy of the report believed to be the same document that two of the three county commissioners have refused to make public since April.
The report states the county didn't do enough after Huston admitted to having a criminal past. It concludes that Huston's superiors were "remiss in not taking any action in response to Mr. Huston's revelation, especially since Mr. Huston worked in a financial capacity."
Assistant Attorney General Scott Marlow, who is handling the criminal case because of the county connection, has said he doesn't have access to the investigative report and has been turned down when he's asked for it from Franklin County Prosecutor Shawn Sant.
Taylor told Judge Matheson she does not know if an investigation has been done into how it was leaked to the newspaper.
"It's my understanding that the Herald claims it received a copy of the report," Taylor said. "I don't know if (the paper) has retained a copy of the report or spoken to somebody who read it."
Jensen said based on the Herald story, the report appears to include statements about the theft of funds that could be used to impeach individual witnesses.
He noted there appears to be oral statements in the report that are attributed to Huston, which would fall under discovery rules in a criminal case. Also, "the report has some information that could go to innocence or punishment of Mr. Huston," Jensen wrote in his motion.
Taylor also took issue with the fact that Jensen represents Huston in a lawsuit, filed in March by Franklin County against Huston and his wife, Noel. The county is seeking to recoup the $2.8 million.
If the report, even redacted, is released to Jensen in the criminal matter, he should be forced to quit as Huston's lawyer in the civil case, Taylor argued.
She told the court she wants to keep it separate from any civil action, and therefore also shouldn't get into the hands of lawyers for Noel Huston and Tim Fife, the county's former public works director and engineer.
Huston's trial is scheduled Jan. 16, though the defense on Tuesday said that it wants to push it out to late March.
Marlow said he objects to the delay because the case has been going on since May and "the paper trail is very straightforward and, frankly, repetitive again and again and again."
A judge will be assigned to preside over the case, and Matheson said he'll let his colleague decide if the defense arguments warrant a two-month trial postponement.