Sanitation district fires second alleged whistleblower

February 23, 2011


Another South San Luis Obispo County Sanitation District worker who complained to state and local regulators that the district had violated laws was terminated on Friday.

Over the past few years, former shift supervisor Scott Mascolo reported incidents of suspected misuse of public funds and problems with the plant complying with safety and health requirements to several government agencies. Before he informed regulators about plant violations, Mascolo took his concerns to district administrator John Wallace.

Wallace listened to Mascolo’s concerns, but did nothing, Mascolo said.

Wallace is the chief administrator of the district that provides services to about 38,000 customers. He is also owner and president of the Wallace Group, a private engineering consulting firm located in San Luis Obispo that receives about $80,000 a month for plant administration and engineering services.

Not long after Mascolo informed regulators of plant violations, in early 2010, Wallace served him with a notice of intent to discipline which claimed Mascolo verbally assaulted coworker Devina Douglas and his supervisor Jeff Appleton. Douglas, however, said the reports were unfounded.

In February 2010, the district’s attorney, Michael Seitz, amended the notice of intent to discipline and added an additional charge. The next day Wallace placed Mascolo on paid administrative leave for allegedly throwing a wrench at another employee.

As part of the disciplinary process, Mascolo was permitted to have a reviewing officer oversee a Skelly hearing. Wallace hired business associate Bob Perrault, the city manager of Grover Beach, to review a brief from the district and conduct an informal hearing  in the Grover Beach city hall building.

“Wallace said, ‘My good buddy Bob Perrault, the city manager of Grover Beach who owes me a favor, is going to be your Skelly hearing officer,’ ” Mascolo said. “How do you proceed when someone who is handing you a disciplinary action says my good buddy is going to be making the determination?”

Mascolo appealed Perrault’s decision to demote him.

When questioned about Wallace’s allegations, another employee said the district’s claims that Mascolo acted aggressively were untrue. Rick Jackman, the employee Mascolo allegedly threw a wrench at, said in a declaration that the allegation was false and also that he fears he will be retaliated against for telling the truth.

In August, following a formal hearing, mediator Craig McCollum said the district’s allegations were unfounded. McCollum ordered the district to reinstate Mascolo to his former position and pay rate.

The district refused to comply and filed a new allegation, claiming that Mascolo had filed a false police report regarding misuse of public funds.

Mascolo reported to law enforcement that Trinidad Rodriquez, a plant employee, sold scrap metal belonging to the plant for $676 with the approval of his supervisor, Appleton. Instead of placing the monies into the general fund, Rodriquez placed the cash in his desk.

On Feb. 10, Perrault sent out a letter under the city of Grover Beach’s letterhead, saying that he concurred with Wallace and that Mascolo had filed a false police report.

Mascolo is again appealing Perrault’s decision to fire him.

Meanwhile, the same day the district became aware through a news article that Jackman backed Mascolo, Appleton sent Wallace an email saying that Jackman had voiced concerns that several systems at the plant were not working correctly and that Wallace Group engineers should be held responsible.

In the message Appleton went on to say that Jackman’s actions constitute negligence or incompetence.

Wallace concurred and the two began discussing taking disciplinary action against Jackman through a series of emails.

Following Mascolo and Douglas’ complaints to the water board, the sanitation plant received a notice of violation including allegations that the plant operators were only collecting samples when they knew the discharged water would be the cleanest.  Douglas was then fired. The notice of violation confirmed Mascolo and Douglas’ allegations.

Last month Douglas filed a lawsuit against the district for unlawful termination.

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Just passing this along–

THEY DON’T WANT TO VOTE!!!!!!! So, we need you in Oceano Wednesday March 2 at 6:30pm! 

Wednesday, March 2nd at 6:30pm is the next board of directors meeting for the South SLO County Sanitation District. The district’s agenda for that meeting does not include Surfrider’s requested vote to investigate potential malfeasances by the Wallace Group at their Waste Water Treatment Plant that serves Oceano, Grover Beach, and Arroyo Grande. With public trust sinking fast, it’s time for them to vote! 

Here’s three recent articles about the plant: 

WE NEED YOU THERE! Please help us create a “SEA OF BLUE” at Wednesday’s meeting. We are asking people who care about resolving water issues in our county to wear blue and support a call for a vote. Please spread the word! All concerned parties are welcome! 

Meeting held at: 

Oceano Community Services District 

1655 Front Street 

Oceano, California 93475 

Brad Snook 

Volunteer Coordinator 

Surfrider Foundation, SLO County 

440-9489 • Surfrider Foundation San Luis Obispo Chapter

The South San Luis Obispo County Sanitation District meeting for Wednesday, March 2, 2011 is at 6:00 PM (not 6:30 PM)

You can find the date, time and agenda here:

That’s right! The meeting’s at 6:00pm on Wednesday. Thanks for posting this.

I’m confused… is this the same supervisor who was caught having sex with the lab tech?

Newman, again, let’s go back to what someone posted in response to your last post: a) where’s the proof b) so what if they were and c) if that were the case (which it’s obviously not,) why weren’t these two fired for that?

It’s painfully obvious to everyone here you are either Jeff Appleton or one of the famed Wallace Groupies (if not Wallace himself.) You’re embarrasing yourself and as it’s apparent that lab tech is “snotty” – to quote today’s Shredder column – enough to sue you 2 different ways, you might want to lookout before you’re staring down the barrel of a slander/libel suit to boot!

I’m all for it, by the way. I hope she takes you for everything you’re worth.

Speaking of lawsuits, when is Mascolo filing?

Oh shoot, I did not catch the foul words in the link, my apology Mr Moderator and readers. Perhaps that’s why it dissapeared previously.

Bad words, link to stale fiction from 2004? personal attack deleted twice if you notice that a comment has disappeared it is bad form to repost that same comment, if you have questions or advice concerning moderation read the guidelines use the email please

Where is the board of supervisors on this? How come there hasn’t been a grand jury investigation of corruptness? John Wallace is the bad apple here. It’s time he get kicked to the curb. If the ones in power won’t do that , they need to be release also.

Supervisor Hill was on the Dave Congalton show about a month ago and someone called in and asked this exact question. He claimed that the BOS has no jurisdiction over the matter.

Whether that’s true or not is up for debate.

Like all things political, those in power can “find” the jurisdiction whenever they feel like attacking an issue, and hide behind “that’s not MY problem” when they don’t want to face an issue. I’m sure any BOS rep would come up against a lot of opposition fighting this battle because so many in this community view Wallace as some kind of business saint. And the truth of the matter is that Wallace HAS likely done a lot of good in the community, no one could be as successful as he has become without a certain knowledge base, reliability and good PR skills. I’m sure there are those in the community who have nothing but good things to say about their experiences with both him and Wallace Group.

But absolute power corrupts absolutely. His deviation from the path of all things good and right likely started with something small and relatively insignificant, and then he did it again, and again, and once more. Sure, I bet he’s still doing a lot of things right because not every situation calls for needing “creative” (wink, wink) solutions. We all know, most of the time the world works the way it’s supposed to. It seems to me that Wallace/Wallace Group has forgotten how to react with anything that resembles integrity and a reliance on ethics when things get sticky.

Can he engineer? Sure.

Can he run a business? Sure

Can he schmooze with the best of them? Sure

But when one employee, then another, came to him with concerns about the way one of “his projects,” the SSLOCSD, was run, he chose to first shut his eyes and ears, then when that didn’t work, he tried intimidating them both, and then finally, when push came to shove, at the last possible moment he could do the right thing, he fired them to save himself.

Personally, I don’t care if this is the only bad deed he’s committed in a lifetime of stand-up business practices, it’s enough to demonstrate he can’t be trusted.

The Board of Directors that oversees SSLOCSD need to remove the cancer, John Wallace, from their organization.

SLOChuck – ” so many in this community view Wallace as some kind of business saint.”

Do you have any idea how many people used to say the same thing about Kelly Gearhart? I heard citizens and elected officials both say what a wonderful and giving man Gearhart was. One council member even told me how Gearhart could save our city and our own chamber voted him “Citizen of the year”. I kid you not.

WALLACE IS RIPPING EVERYONE OFF. He is doing far more lasting and irresistible damage than Gearhart ever could have. People need to wake up and smell the sewage.

John Wallace needs to go to prison…

I am so happy that CCN exists to bring such stories to our attention!

Pardon my French, but how long are you damn SSLOCSD Area residents going to stand for this blatant corruption?

These a$$hats are ruining OUR county and wasting YOUR money.

I urge you all to go to the next board meeting and let these idiots/thieves/a$$hats know you won’t tolerate this kind of treatment.

I urge all the affected board members/members of city counsels to DO SOMETHING to protect those residents you are supposed to represent. I’ll remind you that in most cases, this one included, if you’re not part of the solution you’re part of the problem.

Why does this not surprise me? As a rate payer in the Arroyo Grande area I am irate that in the long run I’m sure it will be me paying for these actions.

Why can no one on the Districts BoD see that if they are having “issues” with three out of 10 employees the problem likely isn’t the employees, but the management.

Wallace, I think your time ruling the roost is over. IMPEACH Wallace and all his supporters on the Board, and I hope Douglas’s lawsuit (although it will be costing me money) is sucessful. Maybe that’s the only way to get through to these people.

SLOChuck – Thinking the Devina Douglas lawsuit is costing you $$ is ridiculous and shows you are not really as knowledgeable as you think. The District’s insurance company is paying for the defense! The lawsuit is riduculous and just shows how two (2) employees who were worthless will act when they are faced with unemployment!!!!

“Worthless” huh? Wanting government to do the right thing and FOLLOW THE LAW? You’re right, that’s dumb. Who cares about pathogens being released to the oceans? Who cares about a businessman essentially writing his private company blank checks? Who cares about employee safety?

My mistake.

Not to mention wasn’t it reported here on CCN and in the Trib that Douglas was Lab Director of the year in 2010? Yep, definitely worthless.

And just like EVERY insurance claim, there is a deductible and increases in rates which will need to be paid. I bet you the deductible is more than my $500 auto insurance policy’s. Way more. Who do you think is paying for that? If it’s not me and my fellow rate payers, can I assume it’ll be you? That’s cool then. Feel free to send your name and address to the District then so they know where to send the bill to.


Douglas received TWO (2) awards from State AND Federal agencies. Mascolo was a 12 yr employee of the district. Worthless? Back your words up, by what measure are the two whistleblowers worthless? What’s wrong Jeff, getting a little nervous about being named co-defendant in a lawsuit? Or is it that the district isn’t going to give you legal representation in your apeal to water quality?

Unemployment may be a blessing in disguise if its as bad as conditions dictate. Just remember when your in the water next time, that probably wasn’t sand crab that floated into your mouth.

Far as worthless goes,that’s your opinion and like the old saying goes opinions are like what feeds the plant, everybody has one, in your case it sounds like it may be super sized.

All good and well, at least they didn’t commit a federal crime,use fraud in reporting of results to the EPA or SWQCB, steal, intimidate, threaten, retaliate,embezzle or otherwise as charged,somebody has to expose this corruption and be the whistle blower’s these days.

Id think If they were salaried anything like Wallace they probably could retire by now and buy an island somewhere spending the days sucking down cool tropical drinks,it cant be all bad.

There is an old saying for low ranking workers that “Sh*t never flows uphill”, meaning that only the lowly employees get dumped on. The double meaning should be lost on no one here; however, once the Wallace Group is indicted for fraud and rigging governmental contracts, I’m sure the real sh*t will hit the proverbial fan, highly appropriate given that this is all about a “sanitation district”.

Bob, it sounds like the S*** is already hitting the fan.

Well, at least it’s hitting the beaches.

Don’t be so sure about that as Wallace fired the lab tech who obviously performed to a higher standard than Wallace’s multi disciplined band of thieves. Now the samples are being collected by the employees who under law are not allowed to perform the required permit required tests, this makes no sense to me. For all we know the ones left at the plant are as willing to lie as Wallace, and could be tampering with or watering down the samples to provide passable results. After All Appleton who was recently cited for using fraud in his duties is still a employee there. This is not right, where the legality in this? How is this serving the public’s best interest? If anybody is interested in reviewing the NOV or Appleton’s discipline from the regional board perhaps CCN can provide a link for viewing as they are public record. This is an outrage, Why dosent Wallace who is the Districts webmaster detail the real truth related to the NOV, instead of seemingly trying to pass it off as a non issue. Its Disgusts me that Wallace apparently is cashing in on the NOV which is in itself a result of the Wallace Groups failure to perform, charging the District some $25,000 to provide a operations manual that should have been there from day one. Visit , follow the link to the agendas and look for yourselves, look at the warrants in the board packs and see the charges this bastard is getting away with as a result of his own blatant ignorance and lack of abilities, this is insanity. Bobfronsanluis is right, crap does run down hill and the Wallace group is the toilet bowl from where this mess originated.

Any details on this alleged fraud and rigging of contract indictment?

No, I don’t have any details, just my gut feeling. Stay tuned here to CCN and Karen Velie and I am positive that all will eventually be uncovered. How a purported business man and supposed community leader could operate in the manner that John Wallace has been running the sanitation district and paying himself, firing workers who have the ability to do their job according to the law and manipulating data in order to deceive regulators that are supposed to be protecting the citizens and the environment is way beyond me. Eventually, karma is a bitch and what you put out will come back to you in some form or another. In looking at the picture of Mr. Wallace featured in other articles here on CCN I can fully picture what he will look like in an orange jumpsuit ….