A former deputy prosecutor who claimed Island County Prosecuting Attorney Greg Banks pressured her to publicly support him in the last election and unlawfully terminated her has settled a claim for $300,000.

The Washington Counties Risk Pool, which is essentially the county’s insurance company, decided to settle a claim for damages and a whistleblower claim with Amy Dempsey, according to attorneys on both sides.

“This is a definite vindication for Amy and it will remove the cloud she has been working under,” said Peter Moote, a Freeland attorney who represented Dempsey in the claims. “She will now be able to move on and find permanent employment.”

In addition to the money, Banks had to provide Dempsey, an Oak Harbor resident, with a letter of recommendation as part of the settlement. Moote described it as a glowing endorsement of the former deputy prosecutor, which states, in part, that “she was a valuable asset to the office.”

Dempsey originally asked for $525,000 in her 34-page claim, which named the county, Banks and Chief Criminal Deputy Andrea Vingo as defendants in the case.

Banks and his attorney, Duncan Fobes of Seattle, say the risk pool’s decision to settle doesn’t prove that Banks or Vingo did anything wrong.

“Her claims were false and I believe we would have prevailed in court,” Banks said, referring to Dempsey.

Nonetheless, Banks said he understands why the risk pool settled. He claims it was a purely financial “business decision” made because the cost of defending a lawsuit would be more expensive than the settlement.

“I was not originally in favor of a settlement,” he said, “but my strong desire to clear my name doesn’t justify the cost of protracted litigation.”

Also, he said a court battle would have disrupted the office’s work of putting bad guys behind bars.

Fobes added that defending employment lawsuits can be a very expensive undertaking. If the risk pool were to lose, it may have had to pay a settlement and Dempsey’s attorney fees, in addition to paying the risk pool’s two attorneys in the case.

“Island County, Mr. Banks, Ms. Vingo and their attorneys believe they did everything correct,” he said. “The risk pool made a business decision.”

Moote, however, said that’s just not true. As a specialist in employment law, he said insurance companies and risk pools simply don’t settle for such large amounts unless there is strong evidence that they would lose in a lawsuit.

“This is not a nuisance-value settlement. This is a very substantial amount to settle,” he said. “They obviously saw significant exposure in excess of $300,000.”

According to Banks, the costs to Island County to defend and settle Dempsey’s claim was $10,000. The rest came from the risk pool.

Amy Dempsey’s claim contains a list of 16 employment law violations and other allegations, including wrongful termination, constitutional violations of free speech, disability discrimination, civil rights violations, hostile work environment, retaliation for refusing political endorsement, retaliation for whistleblowing and infliction of emotional distress.

The events alleged in Dempsey’s claim arose in the politically-charged environment of the prosecutor’s office last summer and fall. Banks’ second-in-command, former chief criminal deputy Steve Selby, decided to run for office against his boss. Banks fired him soon afterward.

Banks is a Democrat and Selby ran as a Republican.

The five deputy prosecutors in the office lined up with Selby and unanimously endorsed him for office, to Banks’ surprise and chagrin. One of the deputy prosecutors, Josh Choate, left in the midst of the campaigning to take a job at the state attorney general’s office.

Banks hired Dempsey on June 7, after the other deputy prosecutors had endorsed Selby.

In the complaint for damages, Dempsey claims that she was continually approached by both Banks and Vingo and pressured to publicly declare her support for him, specifically to the Whidbey News-Times.

The complaint contains many specific examples of times in which Banks and / or Vingo allegedly pressured her in a threatening and harassing manner. The complaint states that Dempsey felt that her job was at stake, but she asserted her neutrality over and over again.

“Later in the same day she received a call to her cell phone from Mr. Banks upset about the endorsement of the Whidbey News-Times of Steve Selby,” the complaint states. “He again insisted that she publicly support him in the paper. She again stated she would not do that. Mr. Banks then directed her to go into the office of another deputy prosecutor and tell him to retract a quote he had made against Mr. Banks and to support him.”

Just before the election, Dempsey and all the other deputy prosecutors — not including the two chief deputies — purchased an ad in the News-Times in support of Selby. They did it, a number of them told the News-Times, because they felt Banks was acting inappropriately.

The complaint alleges that on Nov. 3 “the actions by Mr. Banks and Ms. Vingo had become so outrageous that Amy felt the need to report this wrongful conduct” to the Island County commissioners, pursuant with the Whistle Blower Act. No report of an investigation was ever provided to Dempsey.

On Nov. 6, the complaint states, Dempsey was “so sick with distress and anxiety that she had to call in sick and seek medical attention.”

Dempsey received authorization from the Island County commissioners, Dempsey claims, to take an unpaid medical leave. Banks eventually terminated her employment at the beginning of the new year.

“By a letter dated January 3, 2007, Mr. Banks made good on his threat to terminate Ms. Dempsey by taking the first opportunity he had,” the complaint states.

Banks explained it differently. “By early January she still had not shown up for work, and I had to let her go to make room for a working replacement,” he wrote in a statement.

As for Banks’ office, it has experienced significant changes in personnel following the heated election. Of the six deputy prosecutors who endorsed Banks’ rival in the election, only one remains. Half of the support staff of eight have left.

“I am really happy with the staff I have right now,” Banks said, “and I believe morale is really good.”

Both sides say they are looking forward to putting the matter behind them.

“The case is settled. The election is over. It is in everyone’s best interests to put the matter behind us, and allow the Island County Prosecutor’s Office to continue the important work of prosecuting criminals, and representing the county,” Banks wrote in the press release.