Scanlon vs. Basalt, Round 2: Former town manager alleges defamation in pending lawsuit |

Scanlon vs. Basalt, Round 2: Former town manager alleges defamation in pending lawsuit

Mike Scanlon
Aspen Times file photo

A long-running feud between former Basalt Town Manager Mike Scanlon and the town government flared up again this month over allegations of a smear campaign.

An attorney for Scanlon sent a “notice of claim” to Basalt Mayor Jacque Whitsitt and the six council members Sept. 10 that informs them he intends to file a lawsuit. Colorado law requires advance notice by a party when it plans to sue a governmental entity.

Scanlon claimed he has suffered damages from “defamation, intentional interference with contract and prospective business advantage, emotional distress, and for breach of the settlement agreement that was reached with the town of Basalt.”

He will seek an unspecified amount of money as well as legal fees and costs.

The Aspen Times acquired the letter from the town through a Colorado Open Records Act request. It was sent on Scanlon’s behalf by the Denver law firm Benezra & Culver.

Scanlon departed abruptly in August 2016 after a feud erupted with several members of the council in office at the time. He terminated his contract because, he said at the time, council members in office violated the agreement by discussing his performance in public.

The final straw for both sides was Scanlon’s use of a special fund to assist town employees with the purchase of a home. Some council members were angry that Scanlon tapped the fund for $35,000 without their approval. Scanlon didn’t sign a promissory note or arrange terms for repayment, according to officials at the time. Scanlon contended he used the program appropriately.

The town and Scanlon worked on a severance package after he quit. Negotiations turned sour when Scanlon claimed the town was retaliating against him. He threatened to sue. They eventually negotiated a $250,000 settlement.

After leaving Basalt and returning to Kansas, Scanlon resurfaced in the Roaring Fork Valley as an executive with Habitat for Humanity Roaring Fork. His notice suggested he is being groomed as the successor for chapter President and CEO Scott Gilbert.

But Scanlon claims Basalt officials or their associates have made disparaging or defamatory comments about him to other officials connected to Habitat for Humanity in an effort to prevent him from being promoted by the organization.

“Basalt Mayor Whitsitt’s husband, Tim Whitsitt — who we believe we will be able to show was acting at the direction and with the knowledge of his wife — and Basalt Council Member Jennifer Riffle have launched a campaign of defamation against Mr. Scanlon in retaliation for his vindicating his legal rights,” Scanlon’s notice said. “They have defamed Mr. Scanlon to his new employer, Habitat for Humanity for Roaring Fork Valley in an obvious effort to interfere with his existing employment and his prospective employment as (Habitat’s) new CEO.”

Jacque Whitsitt declined comment on the matter. Scanlon’s notice didn’t provide any details on how Jacque Whitsitt allegedly directed Tim Whitsitt’s actions.

Tim Whitsitt, an attorney, acknowledged that he voiced concerns about Scanlon to Gilbert and Eric Musselman, a member of Habitat’s board of directors. Whitsitt was a founding member of Habitat for Humanity Roaring Fork and served as its first president. He said he strongly supports the nonprofit organization’s mission and cares about its success. Whitsitt said he feels it would be detrimental to the organization’s success to have Scanlon at the helm.

“When I found out they were contemplating Scanlon, I was appalled,” he said.

He said he acted on his own and his wife “never requested or directed” any of his actions in the matter.

“It’s absolutely untrue,” he said. “It never happened.”

Scanlon’s notice of claim said Tim Whitsitt told Gilbert that, “Mike is poison. He is toxic. Mike will ruin your fine organization. Mike extorted money from Basalt.”

The notice also claimed Whitsitt allegedly told Musselman that Scanlon “stole” town money for a downpayment on a house. Hiring Scanlon, Whitsitt allegedly said, would hurt Habitat’s reputation, according to the notice.

Whitsitt said he is “looking forward to confronting (Scanlon)” if the case ends up in litigation. He said he would use public information about Scanlon’s performance with the town of Basalt to back his claims that Scanlon would harm Habitat’s standing.

“I’m ready to defend what I said in court,” Whitsitt said.

Scanlon’s notice to the town also claimed Riffle made defamatory comments about Scanlon to a Habitat for Humanity Roaring Fork staff member on a day when town employees and council members volunteered to work on housing the organization is constructing.

“Riffle told (the employee) that if Habitat hired Scanlon for the CEO position, Basalt would lose all respect for HHRFV,” the notice said. “She went on to disparage Scanlon’s character and conduct during his employment with Basalt.”

Riffle declined comment and referred questions to the town manager and town attorney.

Basalt Town Manager Ryan Mahoney declined comment about the matter. The council is scheduled to discuss Scanlon’s notice in a closed session at its next regular meeting Tuesday.

Scanlon didn’t respond to a voicemail or text from The Aspen Times.