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An accountant resigned from her $42,000-a-year part-time job as West Seneca’s comptroller two months ago after employees accused her and an aide of using a tape recorder to secretly record their workplace conversations.

Town officials confirmed that two town employees made complaints against Jean M. Nihill, 57, about a month before she resigned from her job as the town’s top finance officer on May 12. Nihill, a certified public accountant, is the business partner of one of the town’s most politically powerful individuals – town Democratic Party leader Paul T. Clark, who served as town supervisor for 16 years.

The employees also alleged that former deputy comptroller Linda Kauderer took part in the bugging. Kauderer retired from her town job May 20.

Police investigated the complaints and verified that a tape recorder was used to record the employees while they were working in town offices, Police Chief Daniel M. Denz confirmed.

Authorities decided not to file criminal charges after police consulted with the Erie County District Attorney’s Office, Denz said. He added that a union grievance was filed over the bugging, but said he does not know the status of the grievance.

“The DA felt this did not rise to the level of something that should be criminally prosecuted, and that it should be handled by the town as an administrative matter,” Denz said. “We agreed with them.”

According to New York State laws on surveillance and recording of conversations, it is not illegal for an individual to secretly tape-record a telephone or face-to-face conversation, as long as the individual who is doing the taping is part of the conversation.

But a person in New York State cannot legally tape conversations that he or she is not part of, according to state law.

According to Denz, police are aware of only one incident – on April 1 – in which finance workers were recorded by someone who was not in the room, and not involved in the conversation.

Denz added that employees in the finance office also alleged that one of their bosses accessed one worker’s computer information while the employee was out of her office. The police chief said that did happen, but said there was nothing illegal or improper about it.

Both Nihill and Kauderer admitted that they had tape-recorded their employees without the employees’ knowledge, and both women said they thought there was nothing wrong with it, Town Supervisor Sheila Meegan said.

Nihill could not be reached for comment. She did not respond to three telephone messages and two email messages The News left for her.

Kauderer told The News that the incident was a misunderstanding that was “twisted around” by people who made false allegations against her and Nihill. Kauderer said she carried a tape recorder with her “for years,” but only used it to make notes for her job. She said she never used it to make secret recordings of fellow workers, and never knew Nihill to engage in such activities.

When asked why anyone would make such allegations if they were not true, Kauderer said: “Politics.”

Nihill was on the job just five months before she resigned. In a short resignation letter she sent to members of the Town Board, she made no mention of the bugging allegations.

“Due to the lack of cooperation by the town supervisor and her staff, I have found it impossible to do an effective job as town comptroller,” Nihill wrote.

Meegan said Nihill’s letter presented an inaccurate picture of what led to the resignation. She denied that she or anyone on her staff had refused to cooperate with Nihill.

Aside from the alleged bugging of her employees, Nihill “couldn’t do the job, because she had no municipal experience,” Meegan said. The town has an annual budget of nearly $35 million.

Meegan said that Nihill and Kauderer both admitted to her in conversations at Town Hall that, on numerous occasions, they used a small tape recorder to record what employees were saying about them.

“She admitted to me, ‘I’m recording them all the time,’ ” Meegan said, describing a conversation she said she had with Nihill several weeks before Nihill’s resignation. “She said, ‘I’m protecting myself.’ ”

Nihill “didn’t think anything was wrong with it,” Meegan said of the tape recordings. “She was proud as a peacock about it.” She said Kauderer also admitted to tape-recording employees.

Kauderer said she never made any such admissions to the town supervisor. When asked if the bugging allegations prompted her to retire, she said she had 28 years of town service and was planning to retire anyway.

The situation was described as “an outrage” by Dale Clarke, a former town councilman who now attends Town Board meetings as a taxpayer and raises questions about government actions and spending. The bugging incident has been raised by Clarke and others in discussions during at least three recent board meetings.

“When Jean Nihill was first hired, I questioned it. I wanted to know why we are hiring the business partner of Paul Clark, a man who was convicted of election law violations. I wanted to know why we were putting Paul Clark’s business partner in charge of all town finances,” Dale Clarke said. “I think it stinks.”

As for the tape-recording of town employees, Clarke said: “I think it’s a big-time violation of the rights of workers. You have to go to work worrying that your boss is listening to everything you are saying? That’s not right.”

Denz said police found no evidence that any tapes made of employees were going to be used against the employees. He said this is the first time in his 25-year police career that he has ever heard allegations of West Seneca town employees being tape-recorded by their bosses.

“I do not believe this is widespread, no,” Denz said.

The bugging allegations came up during a public discussion at the Town Board’s most recent meeting on Monday. Councilman Eugene Hart said he believed the recordings were the work of someone else in the office, and not Nihill.

“I don’t believe she was actually involved in the recording; it was another employee,” Hart said.

Regarding the one incident when finance workers were recorded by someone not in the room and not involved in the conversation, Kauderer acknowledged that she was using her tape recorder that day to tape some computer training. She said she never intentionally would have left the recorder on when she was not in the room.

District Attorney Frank A. Sedita III said prosecutors from his office reviewed the West Seneca situation and determined the town should deal with it rather than start a criminal investigation.

“The police receive complaints every day about conduct which is inappropriate, maybe even outrageous,” Sedita said. “Not every inappropriate act in the workplace rises to the level of being a prosecutable crime.”

Sedita said he would be much more likely to recommend a prosecution if someone were using hidden recording devices to make tapes of someone undressing, or tapes that would be used in an extortion plot.

Nihill’s status as Paul Clark’s business partner had no bearing on the DA’s consideration of the case, said Sedita, adding that he had no idea that Nihill worked with Paul Clark until a reporter mentioned it to him during an interview.

Paul Clark, who also did not return calls seeking his comment, pleaded guilty to misdemeanor election law violations in 2008, admitting that he failed to report a $10,000 donation. In January 2009, he and his campaign organization were ordered to pay $1,900 in fines and fees.

Town officials said the grievance filed against Nihill over the alleged bugging incidents probably will be dropped, because both Nihill and Kauderer have left their town offices.

With Nihill’s departure, the town has hired the accounting firm of Drescher & Malecki to oversee town finances.

Reporter Janice L. Habuda contributed to this story.

email: dherbeck@buffnews.com