ST. JOSEPH — Berrien County Commissioner Teri Freehling has been cleared in a criminal investigation into whether she failed to disclose a conflict of interest over money from the drain commissioner that went to her late husband, the prosecutor’s office announced Wednesday.

The Board of Commissioners, however, will be conducting its own inquiry.

“The Berrien County Board of Commissioners has its own bylaws concerning disclosure of commissioner conflicts of interest. At this point in time the board has made no decisions on this matter,” a statement released by the board Wednesday read. “To protect the rights of both Commissioner Freehling and the integrity of the board’s bylaw standards, the board has retained special counsel to review the facts of this conflict of interest issue and to advise the board concerning its appropriate course of action. The special counsel will make a report to the entire board in the next three weeks.”

Board Chairman Mac Elliott said the special counsel will be former Berrien County Judge John Dewane.

Freehling could not be reached for comment.

At issue are contracts from the county drain commissioner awarded to Doug Hartzler of Bridgman, who was paid around $400,000 over two years. Heavy equipment owned by Freehling’s husband, Patrick, was rented to Hartzler, and “a significant amount” of the money paid to Hartzler eventually made its way to Freehling, the prosecutor’s office said in a news release.

Patrick Freehling died in May in an accident on their Baroda Township farm.

The prosecutor’s office, asked by the Board of Commissioners to look into the issue, determined that there wasn’t evidence of knowledge of a conflict of interest on Teri Freehling’s part. 

“Commissioner Freehling could have known and perhaps should have known the full extent of her husband’s work for Hartzler on county drain work; however, her actual knowledge, and her failure to disclose that knowledge, would be necessary in order to sustain a conviction,” the prosecutor’s news release stated. “In a criminal case, the prosecutor has the burden of proof beyond a reasonable doubt. These factual and legal issues are simply too great to establish guilt beyond a reasonable doubt.”

The prosecutor’s office looked into whether the county commissioner had complied with the Contracts of Public Servants with Public Entities Act.

“That act requires municipal elected personnel to disclose financial interests in contracts between the municipality and, in the case of a county, a commissioner, which directly or indirectly benefits the commissioner,” the release explained. “That act says, in part, that a public servant shall promptly disclose any pecuniary interest in a contract to an official body that has the power to approve the contract. A violation of this act is a 90-day misdemeanor.”

The Michigan State Police was asked to investigate and found that Teri Freehling had voted to approve some payments to Hartzler, but apparently did not know about all the money going to her husband.

“While there is evidence Commissioner Freehling knew of the rental of equipment by her husband to Hartzler for county drain work, as she abstained on some votes authorizing payments to Hartzler, but not all, the facts known through the investigation would be insufficient to prove she knew the full extent of the moneys paid to her husband for county drain work,” the prosecutor’s office concluded. “Such proof would be necessary for a criminal conviction. In addition, she did disclose in county board meetings her husband’s involvement in renting equipment to Hartzler but not to the full extent of the actual involvement. In addition, her husband filed an LLC (limited liability corporation) to insulate her from the income.”

The prosecutor added that there also was a legal question as to whether the money used to pay the contracts for drainage work is county funds or drainage assessment districts funds, for which Freehling’s disclosure as a commissioner may not be necessary.

Freehling has agreed to acknowledge, “whether legally bound to or not,” the prosecutor’s release said, “that she should have researched and sought out the extent of her husband’s interest in drain commission contracts and disclosed that to her fellow commissioners.”

She said she will research and disclose any future interest she or her close relatives may have in continuing the rental of heavy equipment machinery to drain commission projects.

The prosecutor’s office said the investigation did not uncover any other information that would require a further inquiry.

The issue is the subject of a lawsuit filed by Hartzler against Teri Freehling, the estate of her late husband, and Drain Commissioner Christopher Quattrin, alleging fraud in the payments for drain projects.

Hartzler claims that Patrick Freehling talked him into setting up a company to get contracts from the county, and then funnelling some of the money to him through the equipment rentals. Hartzler said he didn’t get the money promised to him, and then was shut out of contracts by Quattrin.

Hartzler further charges that Teri Freehling failed to recuse herself from the votes to approve the contracts to him that she knew would financially benefit her family, and that Quattrin had knowledge of the arrangement.

Contact: jmatuszak@TheHP.com, 932-0360, Twitter: @HPMatuszak