Milpitas Places City Manager Tom Williams on Paid Leave after Allegations of Misuse of Funds

Nearly two weeks after Milpitas City Manager Tom Williams was accused of misusing public money to pay his personal legal fees, the city’s top executive was placed on paid administrative leave.

According to sources at City Hall, Williams left right before the City Council convened for a budget hearing Thursday, following a discussion with Councilman Bob Nunez, Police Chief Steve Pangelinan and Human Resources Director Tina Murphy. The city’s outsourced attorney, Chris Diaz, later announced that Pangelinan would assume the role of acting city manager.

Williams has been under fire since city auditors caught him spending taxpayer money on his personal legal expenses. According to records obtained by San Jose Inside, he spent $37,000 on Ad Astra Law Firm to send a cease-and-desist letter accusing Mayor Rich Tran of harassment, age discrimination and defamation. The letter also threatened to sue and demanded more than $1 million in damages.

Tom Williams (Photo courtesy of Milpitas Post)

Tom Williams (Photo courtesy of Milpitas Post)

When reporters asked for records pertaining to the brewing legal conflict, Williams sued to block their release. San Jose Inside obtained a copy of the cease-and-desist letter before the April 28 court hearing, however, and published the document before a judge granted a temporary restraining order to keep it and other records under wraps.

Apparently, Williams tried to get Milpitas to pay for the lawsuit he filed against the city.

Diaz subsequently warned him about the consequences of spending public money for private purposes. Those kinds of unauthorized expenditures violate city policy and state law, Diaz cautioned in a letter to the council, putting Williams at risk of losing his job and facing criminal prosecution.

Williams has repeatedly denied wrongdoing, but he did not deny that he spent the money. In memo released to San Jose Inside through a formal records request, Williams said he retained Ad Astra Law Group to investigate multiple complaints against Tran.

“In light of initial findings and recent turn of events, I am reimbursing the City of Milpitas the initial $7,000 payment to avoid any potential alleged conflict of interest,” Williams wrote in a May 8 memo.

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Source: City of Milpitas

No mention was made of the additional $30,000 he requested, which records show was approved by his executive assistant, Rachelle Currie, on April 28. It’s possible that the $30,000 payment was approved, but never fully processed.

Prosecutor John Chase, of the Santa Clara County’s District Attorney’s Office, told San Jose Inside that it the Public Integrity Unit is monitoring the situation in Milpitas. Meanwhile, the city’s outside auditing firm has deemed the city “high risk” because of the city manager’s financial misappropriation.

Williams, who was promoted to city manager in 2006, has been linked to several pricy lawsuits. The city has had to pay millions of dollars to settle claims of harassment, retaliation and age discrimination by former department heads and employees.

Tran, the city’s 32-year-old mayor, was elected last fall after promising throughout his campaign to put Williams under the microscope. The mayor’s vocal criticism of Williams has frequently placed him at odds with the city manager and his allies.

Williams continues to mount a legal defense.

His attorney, Claire Cochran, filed a public records request for all correspondence between Tran and reporters. Williams’ personal friend, Joseph Weinstein, also submitted a request for all complaints filed against Tran and the rest of the council.

Jennifer Wadsworth is the former news editor for San Jose Inside and Metro Silicon Valley. Follow her on Twitter at @jennwadsworth.


  1. So Williams will get his CalPers retirement and City of Milpitas lawsuit payment settlement for early dismissal. Yea! Mission accomplished! Williams has a lot of corrupt political issues but sadly unfortunate taxpayers will ultimately foot the bill thanks to city officials.
    Police Chief Pangelinan has issues as well and will ultimately receive the same payout.

  2. In my opinion this greedy thief bird has clearly spent way too much time and city resources feathering his own nest and needs to be shown the door. He should be prohibited from any further public employment and kept from further engorging at the public trough. Make him get a real job somewhere away from the benevolent government golden goose where this kind of unproductive nonsense is not tolerated or encouraged.

  3. To the mayor and council members who represent the city of milpitas best interest. Since a appointed acting city manager is in place, why is the public works director still being paid the wages of a assistant city manager. Isn’t this position unfunded and not in the budget. How about using the money that she is being paid and put it to better use. Weeds and potholes.

  4. To our city officials,good choice on the appointed acting city manager who will be leading the city in a positive direction. Well Mr. Tom Williams, how does it feel to be the victim of your own game sort to speak. Maybe your three shadows can get back to work and not hanging out having coffee and lunch with you wasting tax payers money anymore. We all know who they are without having to mention any names. Let’s focus on the employees who don’t make there pay, but do there jobs and take care of our city to the best of there ability.

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