Lynnwood chief’s silence let FBI work

LYNNWOOD — When Lynnwood Police Chief Steve Jensen suspected that one of his trusted deputy chiefs had stolen thousands of dollars plus guns and drugs seized as evidence, he knew there was only one option.

Jensen called the FBI, and opened up his department to painful scrutiny.

In June he quietly requested that FBI agents begin investigating Deputy Chief Paul Watkins, a 24-year veteran of the department. The police chief said he advised Lynnwood’s mayor and city attorney.

What followed was four months of serving justice with silence.

“I know it’s tough on everybody. I know it’s a shock to everybody but it’s the right thing to do and you have to do it properly, that’s why I went to the FBI,” Jensen said Monday.

Jensen said he still can’t discuss the allegations against Watkins, which appear to be the focus of a federal grand jury. The investigation has been difficult on the department, Jensen said, in part because Watkins, 50, is highly regarded among Lynnwood officers and other police departments, and throughout the community.

It was tough seeing somebody you work with every day, knowing that their conduct, their financial history, their life, is secretly being scrutinized by federal agents, the police chief said.

“It’s definitely difficult to have a protracted investigation with someone you work directly with and someone you’ve promoted,” he said.

Keeping the investigation secret was important because an improper release of information could have led to lost evidence, and constitute obstruction of justice, Jensen said. In this case, Watkins has certain employment rights that prevent the department from discussing the administrative investigation that also must play out, the chief said.

“The Lynnwood Police Department took the appropriate steps to resolve this issue and is not hiding any information,” he said. “There was no effort to do anything other than to get to the truth of the matter.”

The case has highlighted what Jensen believes is an incongruity in state law.

Government agencies in Washington are required to “immediately” report any suspected or known loss of public funds to the state auditor’s office.

In the four months Watkins has been under investigation, city officials didn’t advise state auditors, said Mindy Chambers, a spokeswoman for the state auditor.

Chambers said when her office is advised of suspected theft they make sure there is a criminal investigation under way and wait to audit later.

“We don’t send in the stormtroopers to screw up an investigation. That’s the last thing we want to do,” she said.

Jensen said it makes no sense to advise state auditors before investigators completed their probe and collected appropriate evidence.

“You don’t call the FBI for a high-level criminal investigation and say ‘By the way we’re having an auditor look into it,’” Jensen said. “The suspect certainly would know what’s going on. What is jeopardized at all by waiting to call the auditor?”

In this case, had secrecy not been maintained, Jensen said he’s confident “this investigation would not have been successfully concluded.”

The FBI apparently found some of the missing evidence, and police files, at Watkins’ home during a search last week, documents show.

It was Lynnwood police who discovered the suspected thefts, documents show. The department conducts twice a year internal audits which the chief reviews.

Numerous policy violations involving evidence handling raised suspicions, so they began digging deeper, Jensen said.

In 2005 state auditors made some recommendations about evidence tracking but nothing that rose to issuing a report to the department. Auditors visited again last year and in July and found nothing wrong with evidence handling.

Watkins’ alleged misconduct primarily revolves around how he reportedly handled the release of cash seized during drug investigations. Federal agents found more than five dozen instances involving Watkins where cash was taken but adequate records not generated to determine where the money wound up. Federal investigators have raised suspicions about more than $23,000 in cash deposits that were made to Watkins’ bank account during the past six years.

Since 2002, the department has used an automated bar-coding system that documents who handles evidence once it’s booked into the property room, Deputy Chief Karen Manser said. Anyone who receives evidence also must sign for it.

Watkins is under investigation for allegedly stealing evidence, including more than $14,000, two guns and several grams of cocaine seized during a 1996 robbery investigation.

Watkins earlier had told investigators he put the items in evidence lockers at the police department, but failed to fill out the proper paperwork.

In court papers, FBI agents noted the Watkins has a history of financial problems, including seeking bankruptcy protection four times since the late 1980s. Investigators seized documents related to those bankruptcies, as well as bank records and tax statements.

Watkins has been placed on paid administrative leave. No charges have been filed.

Mountlake Terrace Police Chief Scott Smith also has been forced to make a difficult decision involving the Watkins’ investigation. He placed one of his officers on paid leave after learning federal agents interviewed her as a witness.

The 15-year Mountlake Terrace veteran, a friend of Watkins, has since received a subpoena to testify before a federal grand jury.

“I have complete faith in her. I have complete faith all she is is a witness,” Smith said.

The officer was put on leave because of the stress of being subpoenaed by a grand jury and her friendship with someone who is the focus of a federal public corruption investigation, Smith said.

“It makes it very difficult to focus. I’m not going to take any chance that her head isn’t in the game,” he said.

Reporter Diana Hefley: 425-339-3463 or

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