In a stunning new twist in an already convoluted case, Paula June ‘P.J.’ Kennedy, former payroll manager for the County of Mendocino, is seeking a mental health diversion from prosecution of a felony charge of misappropriation of public funds along with suspended Auditor Chamise Cubbison.
In a report submitted this week to Mendocino County Superior Court Judge Ann Moorman in support of the diversion motion, a forensic psychologist contends that the 64-year-old Kennedy is wrestling with isolation, anxiety, and waves of depression after being suspended from her job and being publicly labeled a thief.
Public Defender Mary LeClair said the mental health diversion option is justified given the impact the case has had on Kennedy’s emotional stability. Kennedy’s not guilty plea stands, and if she is diverted to a treatment program, she can eventually petition for dismissal of the criminal charge, said LeClair.
District Attorney David Eyster, who filed the high-profile case against Kennedy and Cubbison, did not respond to requests for comment on the new motion. Special Prosecutor Traci Carillo, who was hired earlier this year by Eyster to try the case, is out of her office until next week and unavailable for comment.
For Kennedy, her professional downfall is in sharp contrast to her history of the highest employee evaluations for her role as the county’s Payroll Manager. As recently as June 2022, Kennedy was recommended for an “extraordinary merit increase,” according to documents attached to the motion seeking diversion from further criminal proceedings. Kennedy's annual salary in 2021 was $85,830, according to Transparent California.
From the beginning of a high-profile case laced with County politics, Kennedy has maintained that she was told to use an obscure payroll code to compensate herself for 2,300 hours of excess time that she racked up over a three-year period during the Covid pandemic. Prosecutors estimate that about $68,000 in extra pay is involved.
A 2022 internal County memorandum cited Kennedy’s “ongoing dedication to her role as Payroll Manager, most especially during the last couple of years of the pandemic, staffing shortages, high turnover of department payroll clerks, software upgrades, and constantly changing pays and deductions” for more than 1,100 county employees.
Technically, as Payroll Manager, Kennedy was an exempt employee and not entitled to extra pay unless authorized by the County Executive Office. She was given compensatory time-off, but the job demands continued to increase and the hours required surpassed the compensatory time allowed.
Kennedy said in effect, “I was working for free.”
“My supervisor and I requested additional staff, but the executive office refused. They also refused to pay me overtime, though in practice the county has many times previously approved overtime pay for exempt employees,” according to Kennedy’s account that is provided in court documents.
Kennedy said she was eventually told by an unidentified supervisor to use the obscure pay code to draw against her accumulated time off.
Now, however, prosecutors have “framed it as a design to steal cash,” said Kennedy in a transcript of an interview with a psychologist and on file with the court.
“Nobody is saying I didn’t work the hours,” lamented Kennedy. “I did what I was told and now they want to put me in jail.”
The 64-year-old Kennedy, skilled in complex payroll requirements in both the public and private sectors, was suspended along with now retired Auditor Lloyd Weer when the unauthorized payments first surfaced, and evidence presented to then-acting Auditor Chamise Cubbison.
For a year District Attorney David Eyster sat on results of a year-long Sheriff’s Department investigation after County administrators tipped him. Eyster offered Cubbison a plea deal of only a misdemeanor charge if she resigned. Cubbison refused, however, provoking Eyster to file felony criminal charges against her and Kennedy, but not Weer, the now-retired Auditor who was in office when the extra pay arrangement was made.
Eyster claimed in a sworn statement filed Dec. 12, 2023, with the Superior Court that Kennedy and Weer pointed the finger at Cubbison for allowing the unauthorized payments. Cubbison has contended that in fact the special arrangement was between Kennedy and Weer.
Cubbison attorney Chris Andrian of Santa Rosa has said Eyster targeted Cubbison out of political revenge after she challenged his office spending including unauthorized annual parties labeled “training sessions” for staff, and their guests at a local steakhouse. Regarding the diversion request, Andrian said, "I don't have any first hand knowledge of Ms. Kennedy's situation but I am not surprised. That woman worked endless hours during a difficult time and they just beat her down in attempts to get at an elected Auditor who challenged them."
Kennedy and Cubbison entered not guilty pleas to a single felony charge of misuse of public funds early this year, but the case has dragged on for months since defense attorneys learned that thousands of internal county emails with possible factual relevance were lost when a County archive system became “corrupted.” Now County officials are saying emails among Weer, Cubbison and Kennedy have been recovered. A most recent hearing on the missing emails ended with Judge Moorman ruling that all are to be turned over to her for review and determination as to whether any are relevant to the pending criminal case.
The court documents show that Kennedy believes she is the victim of a political struggle between the DA and Cubbison, exacerbating a worsening mental state that dates to 2018 when she first sought counseling for depression under a County employee assistance program. Kennedy has been seeing a private counselor for the past four years, according to the documents.
Public Defender Mary LeClair, Kennedy’s lawyer, said she is entitled to a mental health diversion under Penal Code section 1001.36 because she has been diagnosed within the last five years by a qualified mental health expert with a mental disorder, that her issue was likely a significant factor in the commission of the charged offense, and that she could respond favorably to mental health treatment.
Psychologist J. Holden of Ukiah in his supporting report wrote that Kennedy is prepared to waive her rights to a speedy trial and comply with any court-ordered treatment as a condition of diversion. He also stated that “Ms. Kennedy has no known history of being a danger to public safety, and in my opinion does not currently present any such danger.”
Judge Moorman will consider Kennedy’s motion at a hearing scheduled for 1:30 p.m. Aug. 15.
PS. Besides the Kennedy matter, Judge Ann Moorman met with all the attorneys involved and the county IT director Tony Rakes this week. Judge Moorman learned that all emails involving Kennedy, Weer and Cubbison have been retrieved by the County. Moorman said she will act as special master, and directed that all emails be provided to her for her review, and possible action.
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