East Lyme - When the town of East Lyme agreed in July to pay Paul Holmes nearly half a million dollars to settle a lawsuit, Holmes was happy to have his ordeal behind him.

But the part-time town police officer and area native said he was still missing one thing he'd lost: his reputation.

"It was a relief that it was over, but the scars are still there," Holmes said in an interview last week. "There's no worse feeling then being accused of something that you know in your heart you didn't do, and you just have to sit and let time do its thing to come to an outcome as we did."

Holmes successfully sued the town in federal court for violating his right to due process after not being given the opportunity to defend himself during a Board of Selectmen meeting four years ago. At that 2008 meeting, he was not reappointed to his post as a part-time police officer because he was accused of doctoring timecards and other indiscretions. When let go, Holmes had worked nearly 23 years as a part-time officer.

Since then, Holmes has called it "a living hell." He's spent hours in courtrooms, meeting with his attorneys or being interviewed, not knowing if he'd get his part-time job back or live a normal life again.

"Once you lose your name, it's hard to hold your head high," Holmes said.

It began following a November 2007 investigation, led by then-Resident State Trooper Sgt. Richard Crooks, who said Holmes had falsified timecards by counting hours of work Crooks alleged Holmes had not worked. That information was forwarded to then-First Selectman Beth Hogan, who, shortly after the investigation began, lost her position to current First Selectman Paul Formica, who took over in December 2007. The investigation formed the basis for the selectmen to not renew Holmes' six-month, part-time contract by a 4-2 vote in February 2008.

Holmes knew he would not be able to make that meeting and asked for it to be rescheduled. The town refused, and Holmes asked that the discussion of the allegations, scheduled for executive session, be held in open session.

"We do an injustice to the rest who diligently work in that department every day if we let this sit another day without making it clear that we are not reappointing this gentleman based on the pattern and history of the activity that is included in your binder of exhibits," Formica said at the meeting.

According to a state labor arbitrator's report, the allegations made at the Feb. 6 meeting "blackened Holmes' good name and reputation and entitled Mr. Holmes to a fair opportunity to rebut those stigmatizing charges and allegations."

Formica, in a recent interview, said the town's position from the beginning has been that Holmes' separation was a non-reappointment, not a termination. Formica said none of the $449,000 will be paid by the town out of pocket, but rather by the town's insurance company, Allstate International Assignments Ltd. Some of the money will be paid by the state of Connecticut because Crooks was also a defendant in the federal lawsuit.

"I'm still at a loss," Formica said. "I'm satisfied that it's over, but I don't agree with the arbitrator's decision."

But Holmes argued the non-reappointment was actually a termination based on an investigation by Sgt. Crooks, who held a personal vendetta against him. The local union took up the cause and, through its attorneys, Holmes filed a grievance alleging he had unjustly been terminated from his post and that it violated his contract by firing him without just cause.

"What made this case unique was the town's position that Paul Holmes wasn't entitled to any due process or just cause," said Ken DeLorenzo, a former union attorney who represented Holmes.

In August 2009, more than a year after the local union filed the grievance, an arbitrator, in a 79-page decision, sided with Holmes and ordered the town to pay him $18,408.84 in back pay and to reinstate him to his position. The town must continue to reappoint Holmes, the decision says, unless it has just cause to fire him.

"What the Board of Selectmen did not know, and the labor and special counsels probably did not know, is that Sgt. Crooks had a strong personal bias against Officer Holmes which poisoned the entire Town investigation of Officer Holmes," the arbitrator's final decision read.

Crooks left the department in April 2008 to become executive officer, or second in command, at the state police barracks in Montville. He retired last year.

Reached by telephone Friday, Crooks declined to comment, saying he had been told not to discuss the lawsuit.

Holmes did return to work and remains a part-time police officer for the town. He'll work 16 to 20 hours a week on nights and weekends once he recovers from a broken foot he suffered in January and for which he has had two subsequent surgeries.

The passion, though, has waned, Holmes said, and the hours are a far cry from the sometimes 40-hour weeks he would work before his ordeal.

"I was a full-time, part-time guy. I used to work a lot," he said of police work, which he does in addition to his full-time job with the state Department of Transportation in New Haven. "You change, you're not the same person you were. The job doesn't have the same appeal to it. You're scarred somewhat, you know? It's hard to believe someone would try to do something like that to you."

Holmes said he began working as a part-time officer nearly 30 years ago because "I like helping people, being out in public. I've always been involved in public service, somehow."

But shortly after he was accused of doctoring his timecards, he shut down.

"It was a big cloud over me, I just avoided people at that point," Holmes said. "I'd just work and come home and withdrew from everybody because it just got too tough talking about it. I'd go to bed with it on my mind, I'd wake up with it on my mind and it just totally consumed me."

The worst part, Holmes said, was when his two daughters came home from school in tears after their classmates had taunted them, calling Holmes a thief.

"That just crushed me at that point because, why make the kids involved? They gotta deal with that," he said.

Holmes dealt with depression and stress related to his firing. He was thrilled with the arbitrator's decision but decided to sue the town in November 2009 because of the extent of the damage. A judge found in Holmes' favor in March, and a settlement was reached during a special East Lyme Board of Selectmen meeting in July.

Jacques Parenteau, of Madsen, Prestley & Parenteau, a New London law firm specializing in employee law, said the monetary award amounted to "imperfect justice" for Holmes. Parenteau took over representation of Holmes after the union won its grievance. Parenteau based much of his argument in the federal lawsuit on the arbitrator's decision.

"There's nothing worse than a police officer's reputation being tarnished by an allegation of theft, so that was wrong," he said. "Thank goodness that the union was there to set the record straight. And after the union had done their work, we brought this claim to establish a constitutional violation.

"The perfect result would be to wind back the clock and make it such that (the town) did the investigation and Paul never had to defend himself and his reputation," Parenteau added. "So the money's always going to be the second best substitute for the harm that was done."

Robert Wilson, an East Lyme selectman who was on the board in 2008, was one of the two people who voted against the motion to not reappoint Holmes. A former East Lyme police officer himself, Wilson said the decision to not renew the contract was "too quick, too fast and not given a whole lot of thought as to how the process should have gone."

"It should have been a little bit more of a vetting system before going full-blown trying to eliminate his position," said Wilson, who along with Rose Ann Hardy voted against the motion. "As far as I'm concerned, (Holmes) won everything, hands down. It clears the air because it was hanging over us for the last few years and it wasn't fair to him, it wasn't fair to us, and this is how it goes with the whole arbitration process."

Holmes, a soft-spoken man of 49 years who walks on crutches after his foot injury, is ready to close this chapter in his life. He said he's ready to get back to work and out from under the mistrustful eye of town residents who once thought he was a crook and a liar.

"I worked there, I did a good job, and then somebody put this on me and I didn't have an opportunity at all to speak or tell my side of the story, and this whole thing was just done without any input at all from me," he said. "We had a great union that came to my aid and set the record straight through all those hearings. It was a long process, but as you can see, the record speaks for itself."

s.goldstein@theday.com