Eureka Springs Mayor Butch Berry contacted state auditors in February 2021 about “possible overpayments” to Tracy Johnson, former events coordinator for the City Advertising and Promotion Commission.

In an internal email obtained by the Lovely County Citizen, Lance Woodworth, a certified public accountant for Arkansas Legislative Audit, writes that he “received a call from the Mayor of Eureka and the Finance Director.”

“They explained issues related to the CAPC Commission including possible overpayments to the former Events Coordinator (payroll and the individual’s private events company) as well as other ethics concerns,” Woodworth writes in the email, which was sent to four other staff members with Legislative Audit. “I let them know that they should contact the Prosecutor’s Office and that process. I will also document this for our 2020 audit that will start later this spring.”

Woodworth’s email, dated Feb. 22, 2021, had a subject line of “Eureka Springs (City Advertising and Promotion Commission).”

Woodworth’s email appears to contradict Berry’s sworn testimony in a Feb. 8, 2022, deposition, taken as part of an ongoing law suit filed by Johnson and several other plaintiffs against a group of defendants including Berry and several current and former CAPC commissioners.

According to a transcript of Berry’s deposition, Tim Parker, attorney for the plaintiffs, asked Berry: “Have you ever told anyone that Tracy Johnson embezzled money or property from the City of Eureka Springs?” “No, sir,” Berry replied.

“No, sir,” Berry replied.

Parker later asked Berry: “So is your statement here today under oath that you never represented to anyone that Tracy Johnson stole, embezzled or wrongfully took money from the CAPC or the City of Eureka Springs?”

“No, sir,” Berry replied. “Not to the best of my knowledge, no, sir.”

An audio recording of a telephone call between Berry and city council member Autumn Slane also indicates that Berry had expressed concerns about Johnson to state auditors.

“There’s just talk of embezzlement,” Slane says on the recording, which is labeled with a date of April 5, 2021. “And then all of a sudden we’re spending half a million dollars. It’s just a little alarming.”

“The embezzlement was — Tracy,” Berry replies, pausing briefly. “I mean, that wasn’t anything about us, because the state auditors that audit us, they came up and they would have found it. They’re aware of our concerns about Tracy.”

The Lovely County Citizen submitted a request for information on April 1 in accordance with the Arkansas Freedom of Information Act, requesting copies of any correspondence between Berry and representatives of the Arkansas Division of Legislative Audit since Jan. 1, 2020. Berry’s administrative assistant Kim Stryker responded April 12, citing an exemption in the FOIA for working papers of the audit division.

After the Lovely County Citizen reported on the audio recording of the call between Berry and Slane in its April 14 edition, Berry made a statement at the April 25 meeting of the Eureka Springs City Council, saying he did not accuse Johnson of embezzlement.

“Recently I was, been accused of lying,” Berry said at the end of a tense two-hour meeting at the Auditorium. “I want to be clear that I did not, I do not believe that I lied under oath. I was not accusing Tracy Johnson of embezzling during the snippet of a secretly recorded conversation made by Autumn Slane. When I sat for my deposition with Mr. Parker, I did not recall having the conversation at issue with Ms. Slane. This can be seen from my response in the deposition. I said ‘to the best of my knowledge.’ I’ve had lots of conversation with lots of people during the course of my day as mayor, as a professional and as a citizen, and I cannot remember every single detail of every single conversation. After listening to the recording, my recollection was that Ms. Slane was relaying to me that she had heard that there was embezzling at the city. My response was that those rumors were in reference to Miss Johnson. I stated that they were not about the city itself and if there had been any embezzlement at the city level, it would presumably be caught by the legislative audit. Both the city and the CAPC are tasked with overseeing taxpayers’ dollars and ensuring that those dollars are spent carefully, appropriately, fairly and lawfully. When information is received that this is perhaps not the case, even via rumor, that information cannot be ignored and there is an obligation to look into it and report it to any appropriate authorities. I have nothing but the best interest and love for this city at my heart, and I think I’ve shown that in word and deed during my tenure as mayor. Given that there is an ongoing lawsuit in which I am named, I will not be able to comment further, on advice of counsel.”

Rodney Slane, a local restaurateur and husband of Autumn Slane, has confirmed that he and his wife made multiple recordings of conversations with city officials.

Johnson worked for the CAPC as an independent contractor in 2019 and 2020, and the commission approved a 2021 budget in November 2020 that included a full-time events coordinator position as a city employee. An email from then-commission chair Carol Wright to then-finance director Rick Bright, dated Nov. 17, 2020, seemed to indicate that Johnson had been given an option of continuing to work as an independent contractor or becoming a full-time employee.

In the email with the subject line “Re: Tracey,” Wright asks Bright: “What did she decide – employee/contractor?”

Bright responds that Johnson hadn’t committed either way yet.

However, some commissioners said in January 2021 that there had been no decision to hire Johnson for the position, and Berry refused to sign off on paperwork submitted by then-interim director Gina Rambo to hire Johnson at a salary of $37,000 a year.

At a special meeting on Jan. 20, 2021, the commission voted to pay Johnson as an independent contractor through Jan. 31. At its regular meeting a week later, the commission voted not to hire a special events coordinator.

Parker filed the lawsuit in March 2021 on behalf of Johnson, Bright, Rambo, former group sales coordinator Karen Pryor and former commissioner Greg Moon. Defendants in the suit are Berry; CAPC commissioners Patrick Burnett, Jeff Carter, James DeVito and Wright; former CAPC commissioners and current city council members Harry Meyer and Melissa Greene; Berry’s assistant Kim Stryker; the city and an insurance company that provides a policy to the city. A second insurance company was dismissed from the suit in January.

Parker filed a supplemental complaint on April 7, contending that Berry slandered Johnson and defamed her character by accusing her of embezzlement.

“I have no comment on the matter of what Ms. Slane said regarding embezzlement due to it still being in litigation,” Berry said by email in response to a request for comment before the Citizen’s April 14 report on his recorded conversation with Autumn Slane.