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Public Monies Floated by Cromwell City Councilor – Private Camera also Discovered

Public Monies Floated by Cromwell City Councilor – Private Wi-Fi Wire found with unknown IP Address

By Marvin Pirila


On October 15, 2014 the Cromwell City Council approved a resolution allowing Warren Peters to charge for services tendered in regards to the Point of Sale System at the municipal liquor store.


Mr. Peters was given a check (18179) for $1,985.00 on 3/4/15 for an All-in-One POS for the liquor store.  Mr. Peters deposited this check into his account on 3/5/15.  This money was allotted for:

*All-In-One POS Station:                 $1,499.00
*Cash Drawer:                                        149.00
*USB/Serial Thermal Receipt Printer:  249.00
*Shipping:                                                   88.00


At the March 18, 2015, regular meeting the notes reflect that the bar was “Waiting for delivery of the computer system.”  At the following meeting on April 22, it was reported that the “Computers with the POS system scheduled to be installed tomorrow.”


The council met in a special meeting on May 7, 2015 at 7:00 p.m. to discuss the failure of Mr. Peters to produce the agreed to items. 


Earlier that day (7:34 a.m.) Mr. Peters sent an email to LuAnn Freiermuth, city clerk, regarding the meeting.  “I will not be attending this meeting.  I have contacted and will be issued a refund on the POS terminal that still has not arrived yet, once that is given to me I will give that back to you.  Also the software is paid for and I will pay you for this in a couple of weeks since that is not returnable.  I am DONE.” [Interpreted as resigning from his IT role]  [On May 7, 2014, the money was said to be paid in two weeks]


During the special session Mayor Lund asked the liquor store manager to explain what has been happening.  “Raenese explained that when she returned from vacation on May 4 she had been promised by Warren that he would come over to the liquor store to set up the PointOS system [what happened to the agreed upon April 23 date?]  At around 11 am Warren arrived.  Raenese went to the keyboard and she pressed the POS icon and a trial mode came up.  The POS said to “update” but Warren said not to do that.  Raenese stated that this system was supposed to be set up and working on two screens and ready to go.  Warren told her the off-sale is missing.  Raenese asked him what he meant, “the off-sale is missing”, and asked him what had he been doing.  Raenese had given Warren all the information to input the off-sale last year while [Sam] Clark was still mayor.  At that point Raenese said she couldn’t do this right now and asked Warren to leave.


Raenese explained that she had previously asked for the phone number for the PointOS company to call about the All-In-One system and Warren said he would handle it because she had enough going on right now.  Raenese said it’s just a phone call, it’s my equipment, give me the tracking number and I will call.  Warren did not provide her with the phone number.  Raenese found a number and called PointOS on Tuesday, May 5, and talked to Chris, a sales supervisor.  Raenese asked him to look up under re-seller or sales for the license sometime between September 2014 to April 2015 and to look under City of Cromwell, Cromwell Municipal Liquor Store, Peter’s Home & Hardware, Warren Peters, or anything under Cromwell, Minnesota.  Chris stated the last thing he had for Cromwell was a 1-station purchase in August of 2014 and a 2-station purchase in July of 2014.  Other than these, Chris had no record of any license being sold.  Raense [sic] told Warren she had called PointOS and that there should have been a record of him purchasing a license but there was none.  Chris said the license that was purchased last July was a one-year license.  Raenese said that would not pertain to us because we did not have the approval to purchase the system at that time…She had her annual Shop and Wine party on Saturday and was not able to use the computer and also could not use the credit card proessor [sic].  Mike [Gilbertson] got one computer going so Raenese could get through the day until he could be authorized to actually look through the system and fix it.  He explained that if he got one computer working the other one should work also as they “talk” to each other.  Raenese explained that they haven’t worked together since she has been employed here and that has been over 3 years.  Mike explained that they are networked and should work together.  He also explained that there is no secure system on the computers.”  Source:  Special Council Meeting Minutes, 5/11/15.


On May 11, 2015 at 10:57 a.m. Mr. Peters sent an email to the city that included, “I have imported all of your inventory data, but have not connected the offsale Liq Beer or clothing to any buttons because I do not have the barcodes for these items.  All you need to do is import this information.”


“Mayor Lund expressed confusion as Warren said he does not have the computer but he has imported all the data, “How can that be?”  Raenese said it is not possible because she does not have a program to import it into.  Warren had claimed she does have the program and just doesn’t know how to put inventory on it.  While the clerk was in the liquor store on May 6th her and Raenese decided to “update”.  The company name came up blank, the serial number came up blank and the only thing that came up were the options:  Trial Mode, Exit Program, or Purchase PointOS…Raenese had previously asked for the license number and Warren said he did not have it.  She told him to go get it.  He did not provide it.  Warren had told the clerk that the company had forgotten to register the program to the city and that was why there was no record of a license.”  Source:  Special Council Meeting Minutes, 5/11/15.


On May 20, 2015, the council met again.  Among the discussion topics was the POS.  “Warren Peters submitted a bill dated May 11, 2015 for $300.00 for his labor setting up and installing the PointOS system.  Council requests a more detailed invoice from him…Warren Peters was paid $1985 for an All-in-One POS Station, cash drawer, and thermal receipt printer on March 4, 2015 which has not arrived yet.  Per Warren the equipment order has been canceled and he will return our money. [Emphasis added] The clerk is to ask for a deadline when we can expect our money.”


At the June 17, 2015 meeting “Mayor Lund asked Peters if he had a reimbursement check for the city.  He is still waiting for his reimbursement from Pulse Systems but said payment would be made by next month.”


On July 15, 2015 the Cromwell City Council met in regular session.  Among the topics was an update on computer equipment reimbursement from councilor Warren Peters.


At the regular city council meeting on Wednesday, July 15, 2015, Mayor Lisa Lund chastised councilor Warren Peters for failing to deliver a P.O.S. System or return the $1,985 the city advanced him for the system.  “You’re playing with public money.”


Mr. Peters claimed he ordered the P.O.S. through the company, but found it was on backorder from the supplier in China.  He said that’s where it’s made and after waiting six to eight week, he canceled the order.  His claimed his prepaid credit card was credited for the amount.

Mr. Peters said the money would be there Friday, depending on the mail service.  This followed his claim that the company would not refund money to his prepaid Walmart card unless it showed at least two months of inactivity.


Ms. Lund had called the company and they reported they had no purchase order on record for the city of Cromwell.  They also refuted Mr. Peters claim that they were waiting on any orders from China as there warehouses in the U.S. were fully stocked.


On 7/20/15, on behalf of Mr. Peters, Michael Schlichter, wrote a check (#2843) to the city for $1,985.  This check allegedly bounced.  On August 19, 2015 the council again met, and the agenda showed no item related to Mr. Peters paying the outstanding money.  Assuming Peters must have paid the money back, Floodwood Forum editor Marvin Pirila, added his name to the agenda to speak about the ‘floating of public money.’


Paraphrased, Mr. Pirila said he had reviewed the full file of information provided by the City of Cromwell regarding the money advanced to Mr. Peters for the purchase of the POS system and related items.  Pirila asked how a city councilor could be advanced money on 3/4/15, produce nothing as agreed, and then fail repeatedly to return the money.  In effect, he got a little more than five months of an interest free loan on behalf of the taxpayers.  Most troubling is that the file showed no purchase order, no email from the company itself, no invoice from the company, and no evidence a check had been returned by any company to Mr. Peters as a refund.  Yes, there was a screen shot showing a pre-purchase invoice, but that’s all.  It was as if there was no transaction whatsoever.


Clerk Luann Friermuth interjected to say that there was an invoice, but Mr. Pirila said that was nothing more than text in an email from Mr. Peters himself [actually a screenshot].  Mr. Peters argued that he could get an invoice.  If he could get one, it should have already been in the file to support his alleged purchase.  Ms. Friermuth then asked how Mr. Pirila knew that Mr. Peters had paid off his outstanding amount to the city.  It seemed obvious to Mr. Pirila that when the topic was missing from the agenda he had to have paid it.  When others are pressed to pay their debt or face court action, they tend to pay at the very last minute.  The council basically acknowledged that was the case here as well.  More concerning to Mr. Pirila was the fact that the city would consider this anything other than public information, available upon request, without the normal game of delay. 


When Mr. Pirila reminded the council of the last meeting they had on July 15th, they gave Mr. Peters until Friday to pay the bill.  Councilor Tom Borglund asked Mr. Peters during the course of that meeting, “You do have it right?”  Yes, Peters replied.  Friday came and went and there was no payment.  Allegedly, a check was presented the following week, but that bounced.  Ms. Friermuth than jumped to Mr. Peters defense again, “Who told you that?”  “Do you have the office bugged?”  What she and the council should be answering, is why this information wasn’t provided to the Floodwood Forum upon their Data Practices request made on July 27, 2015 asking for “Copy of check reimbursing city.”  A copy of the uncashed check was provided, but not a copy of one accepted by the bank.  The problem remains that the city hid this item from the public.  As clerk/treasurer Freirmuth filled this request, it leaves one to wonder why she answered a request with a copy of a check that she knew had bounced, knowing it did not constitute a repayment/reimbursement.  [Non-sufficient funds check #2843 later acknowledged on 11/9/15] 


Mr. Pirila sees this as an intentional misrepresentation of facts and that the public was purposely misled.  This failure seems to be a violation of Minn. Statute 609.43, Misconduct of Public Office or Employee.  This statute states “A public officer or employee who does any of the following, for which no other sentence is specifically provided by law, may be sentenced to imprisonment for not more than one year or to payment of a fine of not more than $3,000, or both:…(4) in the capacity of such officer or employee, makes a return, certificate, official report, or other like document having knowledge it is false in any material respect.”  [Emphasis added]


During the course of speaking, Ms.Friermuth (not even a councilor) joined Mr. Peters, Mr. Lally, and Mr. Lippo in asking that Mr. Pirila be removed.  Mr. Pirila was properly added to the agenda and was merely exercising the right than any citizen has to question government leadership, particularly in regards to taxpayer funds.  They can limit your time, although they have let others go on and on and on…  There was no justification for the plea other than to attempt to shut Pirila down from further questioning.  Mr. Pirila did not issue personal threats and in fact, never left his chair.  The council should have let Mr. Pirila talk without interruptions, but decided to attack.  Rather than address the questions and concerns, they went immediately into defense mode, and when that was failing, asked for Pirila’s removal.  [Ms. Friermuth's job description states in part, 'Attend City Council meetings and record proceedings.  Provide information to the public as required or necessary.  Nothing gives her the authority to enjoin the city council and make a request of any kind.]


There is nothing in the statutes authorizing a city clerk/treasurer to actively participate in a city council meeting.  Source:  Minn. Statute 412.151.  The clerk/treasurer is not an elected position in Cromwell, but one appointed by the council.  The fact that she was voicing any opinion on Mr. Pirila’s removal, and the failure of the council to ask for her silence, was a failure of city council rules regarding public meetings.  This problem was not addressed while they debated Mr. Pirila’s removal, which would have also violated the right of the public to question public officials.


In closing, Mr. Pirila said that he was alarmed that the council repeatedly defended each other’s actions without consideration of taxpayers.  He openly asked why the council had not gotten evidence of an actual purchase invoice in advance and pay the check directly to the company itself.  Instead, the check was written directly to Mr. Peters and immediately deposited into his personal checking account.  The city file didn’t show one financial transaction to the company the POS system was being purchased from – no check from Mr. Peters to the company, no credit card transaction, no successful order form, nothing.  Sadly, the only person on record wanting answers and reimbursement throughout was the mayor.  The rest seemed only lightly attentive to the situation.


The city council meeting also revealed, via the testimony of the bar manager that a private camera [later claimed as a feed - retrieving audio to clarify] had been discovered in the bar.  The footage was being sent to a private IP address.   A report was made with Carlton County who has taken no action to this point.


Mr. PIRILA has turned the information over to the State Auditor for their review.

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