DeKalb County prosecutors announced Thursday a plea agreement with the last defendant in Northern Illinois University’s so-called "coffee fund" scandal, wrapping up the criminal cases that have been a campus distraction for nearly a year.
Kenneth Pugh, director of NIU’s materials management department, pleaded guilty to a misdemeanor for his role in the alleged scheme in which workers sold university scrap materials and deposited the proceeds in an improper bank account.
NIU police found that employees were selling the materials, including those from campus building renovations, and using the money as a slush fund for holiday parties and other social functions.
Nine university employees were charged with felonies last year in the case; six employees had their cases dismissed and three supervisors pleaded guilty to misdemeanors.
State's Attorney Richard Schmack, who was not in office when the charges were filed, said Thursday that the felony charges were wrong.
He said there is no evidence Pugh nor the other defendants intended to steal money. Schmack’s predecessor, Clay Campbell, was defeated in last November’s election.
Schmack said that although it was set up improperly, the “coffee fund” was used for activities that are typically paid for out of other public, university funds. The fund was not an authorized university account.
“It was still used for a state purpose, not for personal gain,” Schmack said in a news release. “Some may disagree with the wisdom or prudence of governments using public funds for employee retirement luncheons, but until the State Legislature says otherwise, I do not think it is a crime.”
Pugh, 57, of Sycamore, pleaded guilty to violating the state Property Control Act, a law that says recycling proceeds generated by state agencies are to be directed to the state, according to the prosecutor’s office.
Pugh was sentenced to court supervision for a year and ordered to pay a fine and court costs totaling $825. Charges of felony theft and official misconduct were dismissed.
He declined comment to a Tribune reporter.
He has been on paid leave from his university position for nearly 10 months.
Pugh’s plea agreement is similar to that of the two other NIU supervisors charged in the case: Lawrence Murray, manager of the property control department, and Robert Albanese, a former associate vice president.
Schmack said he did not dismiss charges against them because, as supervisors, they had “at least some degree of responsibility” for ensuring state laws were followed.
Albanese resigned from the university last year. Murray and Pugh were put on paid leave in August; Murray returned to work June 1.
NIU police began investigating the “coffee fund” bank account last August and turned over their findings to the DeKalb County state's attorney's office in September.
The investigation found that at least $13,000 had been deposited into the account in the past six years, and about $2,100 was in it when it was closed in August and the balance transferred to the university's general fund, authorities said.