Former City Employee Files Retaliation Suit | Alleges Cover Up by City Managers

City Manager’s decision to remove and replace long-time employee ensues in conflicting accounts concerning the reason for termination

PHOTO: Eric Fabbro | News | South Pasadena City Manager, Stephanie DeWolfe

Lauren Rubin, a former long-time employee in the City of South Pasadena’s Finance Department, has filed an explosive lawsuit saying the city used shifting justifications to explain her November 2018 termination in an act of retaliation aimed at making her the scape goat in a scandal over business licenses.

Rubin alleges senior officials, including City Manager Stephanie DeWolfe and Human Resources Manager Mariam Lee Ko, engaged in a cover up, commissioned a “sham” audit and slandered her in a plan “to remove the older workers from the Finance Department and replace them with younger, less qualified employees.”

“The city does not comment on litigation issues,” South Pasadena spokeswoman Rachel McGuire said Wednesday. But during a Nov. 7, 2018 presentation on the reorganization of the finance department DeWolfe, without using Rubin’s name, said the city was “terrible at processing business licenses” and making changes to bring a “competency to the organization that we haven’t had.”

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The complaint lays out ten causes of action including retaliation, age discrimination, harassment/hostile work environment, slander and infliction of emotional distress. It seeks unspecified damages, claiming Rubin won’t be able to get a job with comparable pay “due to the manner in which she was laid off from her job and defamed.”

In the complaint filed March 6 by Encino attorney Vincent Miller, Rubin said she began at the city in 2005 and quotes from a glowing 2006 performance report.

It said in late 2017, Rubin repeatedly warned managers of the ill effects and outrage that would follow a plan to send 3,500 businesses what the suit says were misleading letters suggesting recipients needed to make license payments.

“City managers have subsequently lied” that the project was an “amnesty program” to help delinquent firms but in fact was a fundraising scheme “to license and collect fees from every last individual and business entity in the City who was not previously licensed…The hope was to scare as many residents as possible into thinking they had to pay license fees, and quickly.”

Public records show the City called the effort an “amnesty program” before the letters went out.

The suit says this “scheme” generated a flood of complaints that overwhelmed the finance department. “Residents viciously attacked Ms. Rubin” verbally, in person and on social media. She was inundated with 800 voicemails, hundreds of emails, and a stack of mail about 3 feet high” even as complainants filed into the office, causing her emotional distress and adverse health effects. Rubin acknowledged that by April 2008 she “was still extremely behind in her work.”

Managers attempted to “cover up their roles in the fraud.” Ko conducted one-on-one meetings with all department employees, demanding they sign “retroactive” non-disclosure agreements and, under threat of termination, warned against revealing anything happening in the department without DeWolfe’s consent.

Ko and DeWolfe were unequivocally trying to intimidate the staff including Plaintiff from blowing the whistle. [They] began plans to remove the older workers from the Finance Department and replace them with younger, less qualified employees…

“Rather than take ownership for its actions,” management removed the Finance Department supervisors and replaced them with interim directors who were ill-equipped to handle the tasks of a department they were assigned to oversee.” Ko and Karen Aceves, the City’s Principal Management Analyst, were those directors. “Neither had any prior documented experience in accounting or finance operations.”

The suit says starting in March 2018, Ko and Aceves ignored messages Rubin sent regarding “financial irregularities and mishandling of a substantial amount of government and public monies” that were not being accounted for, but that she got no response.

DeWolfe then commissioned a “sham” audit by Andrew Green–a former Pasadena finance department director who along with Pasadena’s public works director was terminated in January 2015 after the revelation of a $6.4 million embezzlement scheme. The suit states DeWolfe worked with Green when she was assistant city manager in Pasadena and brought him in to do the audit without competitive bidding in a way that “shield[ed]” his identity. “It is alleged upon information and belief that Defendant DeWolfe hired Mr. Green and his firm for corrupt purposes.”

In 2018 Pasadena Mayor Terry Tornek said Danny Wooten–who was convicted–was “the lone city employee involved in the [embezzlement] scheme.” Green and the public works director, who were fired “without cause,” received a total of $236,341 in severance payments.

Public records also show that during 2018, South Pasadena paid at least $65,061 to have Citygate Associates LLC,– the firm where Green is a “senior associate”–do a “comprehensive organization review” of the finance department, including “a separate confidential report as it pertains to personnel-related concerns and matters.” The contract specifies that the work is to be done by Citygate’s “senior consultant,” who is not named in the contract.

Alarmed about financial irregularities, the suit continues, Rubin again went to Ko who responded, “’step it up,’” which Rubin took to mean “do whatever we tell you to and stop talking about the City’s financial irregularities, or you will be retaliated against.”

In May, Rubin was put on administrative leave pending an investigation first over the “handling and processing of monies” and later for “inefficient and inexcusable neglect of duty.” She was escorted from her office “for all to see” and interrogated “multiple times and for hours on end” by a private investigator—retired Alhambra Police Chief Lawrence E. Lewis.

Rubin alleges DeWolfe “concocted” defamatory statements that Rubin was fired for financial improprieties, told Ko as much and instructed Ko to so advise union reps to “destroy her reputation.”

In August, after realizing it couldn’t concoct reasonable grounds for termination, management fell back on the “biased ‘audit’ and decided to use a ‘lay off’ pretext instead.”

Six months later and still in the dark about her status, Rubin learned from a November 2, 2018 news article she was being terminated. “The Defendants, including DeWolfe, published in writing and made oral statements, before and after Ms. Rubin’s discharge, a smear job variety of false ‘cover stories’ regarding Ms. Rubin’s purported competence, qualifications and character, including the assertion that Ms. Rubin was ‘terrible at processing business licenses.’”

The suit goes on to say that union reps and City Council members were given and passed on false statements about Rubin’s alleged misappropriation of funds and that DeWolfe made defamatory statements in public and to the press.

Rubin was forced from a job she served well in for 13 years, was defamed, denied appropriate investigation of her complaints, placed on an administrative leave and subjected to interrogations in a “fake and intimidating investigation.”

The defendants, the suit concludes, “engaged in extreme and outrageous conduct toward Plaintiff when it committed fraud on City residents and financial malfeasance and gross mismanagement and then framed the Plaintiff, subjecting her to an investigation with no basis and lying that Plaintiff committed their own wrongful conduct.”

Rubin is seeking special, general and punitive damages and other costs.


Ben Tansey
Ben Tansey is a journalist and author. He grew up in the South Bay and is a graduate of Evergreen State College. He worked in Washington State as a reporter in a rural timber community and for many years as an editor for a Western electric energy policy publication based in Seattle.


  1. There are a lot of quotes because this is taken directly from the lawsuit filed. I’ve read through it, and it is indeed an ugly situation that includes intimidation, back-dated NDs, and the fear of being fired if one dares to question what’s going on. No wonder we can’t retain staff!

    Having worked as a journalist, I want to thank Ben Tansey for his accurate and unbiased reporting. Just the facts, ma’am!

  2. Four finance directors in two years, a 29 year-old finance director with a degree in Spanish, a lawsuit by a former finance employee alleging irregularities and a cover-up, a long list of management employees running for the door, an endless string of new taxes and fee increases that are somehow never enough, and the chair of the Finance Commission says that everything is great and there’s nothing to be concerned about.

    Only outside intervention can possibly matter, at this point. We have no local checks and balances.