New London - Former City Councilor Michael Buscetto III confirmed Wednesday that he has turned down the city's offer to pay his legal fees in a dispute with police Chief Margaret Ackley, saying he would not accept "hush money."

Buscetto also praised the City Council for rejecting a proposal to pay the chief $25,000 so she wouldn't sue the city.

Ackley had accused Buscetto of "gender discrimination, harassment and other improper conduct" and contended that the city failed to take action to stop it.

"The council, they did their job,'' Buscetto said Wednesday following Tuesday's 4-3 council vote to reject the settlement.

An independent report found that the city would not be liable in connection with complaints against Buscetto and stated that the city could avoid costly legal fees by paying Ackley up to $30,000.

Buscetto declined to comment further on the city's offer to pay his legal fees. "But I will say I wasn't, at this point, willing to accept hush money," he said.

Buscetto, who ran for mayor last year, lost in a Democratic primary to Daryl Justin Finizio, who was elected mayor in November. Buscetto has maintained that the allegations by Ackley "cost him the election."

"I said from the beginning these are just allegations,'' Buscetto said. "The community was misled, and I think it's taken a toll on the community.

"Many people in the community believed what the chief and mayor said. They were led to believe some bad things went on, and in fact they did not."

Buscetto said he is investigating "what type of recourse I have" but would not elaborate.

The council Tuesday night also rejected a four-year employment contract for Ackley. Councilors cited a lack of money in the city budget as one of the reasons for voting against both the settlement and contract proposals.

Finizio said Wednesday that he plans to discuss the next step with the council and talk about future funding issues.

In a split vote, the council rejected Ackley's contract, which would have given her a raise of about $3,000 and would have paid her $60,000 for about 1,000 hours of unused compensation time that she has accrued since taking the job in 2009.

Council President Michael Passero and councilors Adam Sprecace, Donald Macrino, John Maynard and Marie Friess-McSparran voted against the contract. Councilors Wade Hyslop and Anthony Nolan voted in favor. Maynard joined Hyslop and Nolan in voting in favor of paying Ackley the $25,000 settlement.

k.edgecomb@theday.com