SOUTH PORTLAND — The director of the city’s largest municipal department has been placed on paid administrative leave pending an independent review of his department.

City Manager Jim Gailey said he decided on Friday to place Dana Anderson on paid leave until further notice. 

As director of Parks & Recreation, Public Works and Libraries, Anderson oversees an annual budget of $9 million. 

The decision to place Anderson on paid leave comes weeks after Anderson settled a lawsuit that accused him of embezzling $37,500 from a not-for-profit association of basketball officials. A Maine State Police criminal investigation into the allegations produced no charges.

Anderson admitted no wrongdoing while agreeing to pay the International Association of Approved Basketball Officials $900 to drop the charges. He claimed the allegations were personally motivated. Anderson, who fought the embezzlement allegations for six years, said he settled the lawsuit to put the issue behind him.

But Anderson has only faced more intense scrutiny since the settlement was reported.

He and other city officials have been criticized by workers and residents for the layoffs five longtime employees, four of whom worked for Anderson. Some residents and city councilors have also raised questions about Anderson’s hiring of relatives and his acceptance of donations to his department without City Council oversight.

An independent review into allegations made by Deb Smith, one of the fired city workers, is also being conducted. Gailey said an independent audit of Anderson’s department will be conducted, too. 

“I have an independent review coming close to an end and an audit review to take place shortly,” Gailey said. “(The) findings of those reports will play a role in my decision” about whether to reinstate Anderson, he said. 

Tim Gato, who was recently appointed deputy director of Parks & Recreation, Public Works and Libraries, is running the department in Anderson’s absence, Gailey said. 

Randy Billings can be reached at 781-3661 ext. 100 or [email protected]

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