The Public Safety Personnel Retirement System Board on Wednesday fired Administrator Jared Smout, after he admitted to investigators that he sexually harassed an employee for about a year and spent months during 2014 watching a staffer he was attracted to on surveillance video.

William T. Buividas, who is chairman of the pension program for first responders, lawmakers, judges and correctional officers, called the termination of the agency’s top boss “a decision we could not in good conscience avoid.”

The board voted 8-0 to fire Smout with cause, meaning he will not receive severance or pay. His annual salary was $252,200.

Five years ago, when Smout was the second in command at the agency, he spent hours using in-house surveillance video to secretly watch an employee he was attracted to. Smout used the state video equipment at least 378 times over a month to watch the employee, records show.

That information was not publicly disclosed until recently as part of a state investigation.

Then-Administrator Jim Hacking was given the information at the time and for unknown reasons didn’t discipline Smout. Instead, Smout was given a raise and eventually promoted to replace Hacking, who was forced out for giving PSPRS employees secret raises.

The recent inquiry also examined whether Smout had the agency’s information technology staff spy on PSPRS employees he didn’t like.

Neither the Arizona Department of Administration, which investigated Smout and called for his firing Monday, nor PSPRS would say how many people were harassed, although records indicate it was at least two people. 

Smout, who is married, told investigators he stared at one person’s body because he “was a man.”

Buividas pledged that the mostly new PSPRS board, appointed by the governor and legislative leaders, would work with management to “revamp policies … to prevent and address inappropriate behavior and workplace harassment.” He added the agency would also revamp policies on cybersecurity, records management and human resources complaints.

Efforts to reach Smout and Hacking on Wednesday were unsuccessful.

PSPRS had an undisciplined atmosphere under Smout, according to a complaint that triggered the state investigation. 

During his tenure, thousands of Social Security numbers of pension members were mistakenly released, and Smout rewarded his inner circle with large bonuses and raises despite poor to modest investment results. He also hired an IT executive who was fired from another state agency for harassing employees, records obtained by The Arizona Republic show.

In addition to admitting to sexual harassment allegations, Smout acknowledged to state investigators he was aware of staff concerns that he was spying on them. Yet, a state investigation found he did not retain a computer forensic expert to conduct an investigation in a timely manner, file a police report, contact the FBI or inform the PSPRS board that two employees believed they were being spied on by IT.

The state investigation redacted information to disclose who was being spied upon.

Smout placed a confidant in the agency’s IT department when he hired John Briney in August 2016. Briney had recently been fired as deputy director at the Arizona Department of Gaming for creating a hostile work environment.

A state investigation found Briney at Gaming laughed about an employee with “memory loss” and discussed rearranging the worker’s desk to “gaslight” the employee, or make her believe she was “going crazy.” 

Smout, with the PSPRS board’s knowledge, promoted Briney to chief technology officer at PSPRS in January, after giving him a $5,000 bonus in 2018, records show. Briney made nearly $120,000 a year.

A whistleblower who triggered the investigation of Smout claimed Briney and another PSPRS executive on “multiple instances” in 2017 and 2018 went to the back porch at PSPRS, where there is a duck pond, and used steel-ball slingshots to shoot at wildlife. Staff complained to management, but no one was disciplined, according to the complaint.

PSPRS Interim Administrator Bret Parke fired Briney in April, the same month Smout was placed on paid administrative leave.

Smout, without formal board approval, last year granted more than $120,000 in bonuses to investment staffers who claimed they were owed money from 2013. No explanation has been given for awarding those bonuses five years later.

Christian Palmer, PSPRS spokesman, on Wednesday insisted the payouts were “settlements” but gave no additional explanation.

In May, the PSPRS board unanimously approved the retroactive bonuses to three executives, including one who had retired, and another $51,481 payout to the estate of a dead ex-employee.

The vote came after The Republic reported the money was given without formal approval. PSPRS officials say Smout was told in an executive session to grant the bonuses. However, there is is no record showing the board told Smout in an executive session or private meeting to award the payouts.

Records show Smout last year gave nearly $178,000 in bonuses to staff, with most going to senior-level executives. One $2,500 bonus went to his secretary, six months after hiring her at $81,219 a year.

Have a tip on investigative stories? Reach the reporter at [email protected] or 602-444-8478 or on Twitter @charrisazrep

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