North Myrtle Beach cites fraud in suit against Bailey

NORTH MYRTLE BEACH -- City officials, who had planned to fire William Bailey last spring for lying about a crime, now are accusing the former public safety director of lying to them about his plans to retire.

The accusations are included in court documents the city filed this week in its legal battle with Bailey, who is suing the city for alleged defamation and violations of his constitutional rights.

The city is accusing Bailey of fraud and defamation in counterclaims filed this week, calling his conduct "so extreme and outrageous as to exceed all possible bounds of decency."

The city is asking for unspecified actual and punitive damages, and it wants a judge to dismiss all of Bailey's claims.

City spokeswoman Nicole Aiello did not respond to requests for comment.

Kenneth Moss, a Little River lawyer who represents Bailey, called the fraud claim "ridiculous."

Moss said settlement negotiations for employees are not admissible in civil lawsuits and questioned whether the city included the claim simply to sway public opinion against Bailey.

"There is no basis for their claim," Moss said. "They just wanted to get it in the hands of the media."

The city's fraud claim stems from a contentious period in late April when former City Manager John Smithson gave Bailey an ultimatum to either resign or be fired.

The city says Bailey lied about his plans during an April 30 telephone call with city officials. Bailey said during that conversation that he needed more time to consider Smithson's ultimatum, according to court documents.

The city later learned that Bailey had already filed his retirement paperwork with the S.C. Retirement System when that telephone conversation took place.

Bailey "knew there was no longer a need for the city to discuss the terms of the cessation of his employment," the city states in its court filing, "because he knew he had already retired."

City officials, in court documents, say they needlessly spent time, public resources and taxpayer dollars to deal with Bailey because he misled them into thinking he had not yet retired.

Moss compared the negotiations to a game of poker and said Smithson "is mad that I didn't show him my cards."

Smithson's ultimatum followed months of debate over whether Bailey had lied about the circumstances surrounding the theft of his city-issued police handgun.

Smithson retired earlier this month.

The city, in its court filing, also accuses Bailey of defamation, saying he lied about Smithson and others trying "to ruin his career for their own benefit."

The city's court filing says Bailey made up the allegations "in an attempt to deflect criticism, be reinstated to employment with the city" and embarrass city officials.

Bailey's lawsuit was filed on June 11 against the city, Smithson, Aiello and Steven Thomas, the assistant city manager.

The lawsuit repeats claims Bailey has made for months that city officials forced him to lie about whether the glove compartment in his truck was locked on the night his gun was stolen from the vehicle.

Bailey has said he was made a scapegoat for city officials who had grown weary of intense media scrutiny in the months following an April 2009 wildfire in the Barefoot Resort subdivision, where 76 homes were destroyed.

City officials have repeatedly denied the claims, both in news releases and in this week's court filing.

Bailey was suspended from his job on Dec. 30 after Smithson said the public safety director lied to him about how his gun had been stored on the night it was stolen from his unlocked truck.

Smithson said Bailey told him the gun had been locked in the glove compartment of his truck. An investigation by The Sun News showed Bailey's truck does not have a locking glove compartment.

Bailey has said he told Smithson and others that his gun was secured, but he never used the word "locked."

A police incident report that Bailey filed on the morning his gun was stolen does not say the glove compartment was locked.

Bailey's lawsuit includes a copy of an e-mail that he sent to Aiello on Dec. 28 in which he answered questions from The Sun News about the stolen handgun. In that e-mail, Bailey states that the "glove box was secured." The e-mail does not use the word locked.

Bailey has said he was pressured by Aiello and Thomas the next day to say the glove compartment was locked.

Bailey said Aiello and Thomas wanted to use the word "locked" because they had been under "intense pressure" from the media.

When questioned about the fact that Bailey's glove compartment has no lock, Smithson issued a news release on Dec. 30 stating that Bailey admitted to lying about the storage of his weapon and apologized for misleading city officials. Smithson announced Bailey's suspension in that news release.

Bailey, in his lawsuit, said Smithson made up the comments that were attributed to him in the news release.

Separate from the city's actions, the State Law Enforcement Division looked into allegations this year that Bailey interfered in a criminal domestic violence investigation as a political favor. SLED's report has been turned over to the Richland County solicitor's office.

Bailey's police handgun was stolen from his truck on Dec. 21, according to an Horry County police incident report. The Sun News inquired about the theft on Dec. 28, and Smithson suspended Bailey two days later, saying he lied about how the gun was stored.

Bailey's retirement after 20 years of service means he will receive a full state pension and city-paid health insurance. The city will pay Bailey's health insurance premiums until he qualifies for Medicare.