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Flint Mayor Karen Weaver, right, and City Administrator Natasha Henderson address questions about adding supplemental phosphates to water purchased from the city of Detroit in an effort to rebuild the protective coating inside transmission lines on Thursday, Dec. 10, 2015 at City Hall in Flint. The city began the addition of the phosphates on Dec. 9. Jake May | MLive.com

(Jake May | MLive.com)

UPDATE: This post has been updated with comment from The Community Foundation.

FLINT, MI - Former city administrator Natasha Henderson claims she was fired after reporting Mayor Karen Weaver may have been telling staff to direct water crisis donations to her own personal funds.

Henderson filed a federal lawsuit Monday, May 9, in Detroit U.S. District Court, claiming she was fired from her position after asking the city attorney's office to investigate claims Weaver may have been telling city staff and volunteers to send potential water crisis donors to her own personal account, rather than the fund managed by the Community Foundation of Greater Flint.

City spokeswoman Kristin Moore declined comment on the allegations.

"The mayor and city staff do not comment on pending litigation," Moore said.

Weaver could not be reached for comment.

Moore directed further questions to attorney Kendall Williams, who Moore said will handle the case for the city. Williams could not be reached for comment.

"Natasha Henderson was an excellent city administrator," said her attorney, Katherine Smith Kennedy.

The lawsuit claims Weaver's executive assistant Maxine Murray reported around Feb. 9 to Henderson that "she feared going to jail" after Weaver instructed her and a city volunteer to direct donations from the Community Foundation of Greater Flint's Safe Water/Safe Home Fund to a different fund, named "Karenabout Flint."

Murray could not be reached for comment.

The lawsuit claims Murray allegedly told Henderson that she was specifically directed to tell donors and potential donors step-by-step how to donate to the Karenabout Flint fund through its website, rather than instruct them in the steps to donate to the Community Foundation's fund.

State records do not show Karenabout Flint as a registered political action committee.

The Community Foundation of Greater Flint administers Safe Water/Safe Home Fund to provide emergency relief for households with damaged plumbing and service lines as a result of the water crisis. This program is also used in the selection process for the first phase of the city's Fast Start Lead Line Replacement Program

"The Community Foundation of Greater Flint administers the Safe Water Safe Homes Fund," the agency's spokeswoman, Mary Jo Herbig, said in a statement. "Flint native and professional football player Brandon Carr established the fund earlier this year to provide funds to replace plumbing in qualified households in Flint affected by the water crisis."

However, the Flint City Council approved a resolution during its Jan. 25 meeting calling for the Community Foundation of Greater Flint to create "a Safe Water, Safe Home Campaign Fund to receive gifts intended for the maintenance and restoration of the City of Flint's water distribution infrastructure as it relates to the provision of safe, clean water for Flint water customers," according to city records.

The resolution was signed by Weaver and Henderson. It was eventually approved by the state-appointed Receivership Transition Advisory Board.

Henderson claims she told the city attorney's office Feb. 9 that the redirection of the charity funds should be further investigated by then-Interim City Attorney Anthony Chubb.

The lawsuit alleges Henderson reiterated her concerns in a Feb. 10 email to Chubb, asking him to "promptly initiate an investigation of this matter in your capacity." She further asked for advice on appropriate actions she could take to protect employees from potential retaliation for reporting such allegations.

Chubb allegedly replied, "I will take prompt action and advise you later today."

However, Henderson claims she again emailed Chubb on Feb. 12 after not receiving a further response again reached out to the interim city attorney for an update, telling him "this is a very serious matter."

Chubb could not be reached for comment.

Within hours, Henderson says she was called into Weaver's office and told that she was being fired because Weaver had met with state officials and was told that the state could no longer fund Henderson's salary.

The lawsuit claims Henderson told Weaver she was paid by the city and not the state. Weaver did not respond and demanded Henderson turn in her keys and remove all personal effects from her office.

Henderson was hired by former Emergency Manager Darnell Earley in February 2015, and her contract was to run until February 2020. It could only be terminated by agreement from the mayor, city council and RTAB.

Henderson's former attorney, David Sanford, sent a letter to Chubb on Feb. 19, informing the city that the city breached Henderson's contract when she was unilaterally fired by Weaver.

Weaver asked the council on Feb. 22 to support her termination of Henderson, but council members postponed making a decision.

A Feb. 23 letter sent to Gov. Rick Snyder by the city council claims Weaver acted on her own initiative to fire Henderson without consulting or notifying the council, despite the language in Henderson's contract.

However, on March 14, during a closed session, the council voted 9-0 to endorse Henderson's firing.

The lawsuit claims the session was in violation of the Open Meetings Act, saying it only should have been closed by Henderson's request. Henderson never made such a request.

Kennedy claims Henderson served as a vocal advocate for city residents during her time as manager, saying she played an influential role in returning the city to the Detroit water system.

The city has since paid Henderson $70,000 as part of the severance package ordered by Henderson's contract. However, Kennedy claims the city breached her contract.

The lawsuit also claims Weaver violated the Whistleblower Protection Act when she made the decision to fire Henderson.

Henderson is seeking unpaid wages, compensatory and punitive damages.

A December 2015 email exchange between state Treasury officials alleged Henderson tried to stop Weaver from making an emergency declaration over the city's water crisis, which eventually helped spark additional state and federal help.

The exchange was made public as part of a Feb. 26, email release by Snyder's office.

Henderson emailed Treasury official Randall Byrne on Dec. 15, the day after Weaver signed the declaration, informing the state of the mayor's actions.

Byrne then forwarded the declaration to other Treasury officials. From there, it was sent to Michigan Department of Environmental Quality officials and high-ranking Snyder staffers, including his former Chief of Staff Dennis Muchmore.

"Natasha tried to discourage her from proceeding on this," Byrne wrote.

Treasury spokesman Terry Stanton said his office did not encourage Henderson to try and stop the declaration.

"The former City Administrator, Natasha Henderson, expressed to me that it was not in the best interest of the city to declare a state of emergency," Weaver said previously. "She said it would upset the governor."

However, Henderson has disputed the allegations. She claimed she told elected officials what could be gained by such a declaration and what could be lost, including possible negative impacts on the county's bond rating, declines in property values, lenders possibly being reluctant to make loans in the Flint area and a further blow to the city's reputation and economic competitiveness.

"My actions were neither politically motivated, nor were they intended to block, dissuade or discourage any particular course of action by Mayor Weaver or the Flint City Council," Henderson said previously. "My overriding concern was ensuring the wellbeing of the city of Flint and its citizens by providing a full disclosure of possible adverse outcomes, regardless of how that information might be received by Gov. Snyder or other state officials."

Henderson also spoke out about a funding proposal from Snyder's office that sought to counteract the impact the water crisis was having on the city's finances.

Gov. Rick Snyder proposed the $30 million plan as part of next year's budget to help offset water bill charges Flint residents are incurring even though their water is still not being considered safe to use.

Henderson said during a February city council meeting that the proposal would only cover a portion of residents' water bills and would only keep the city's water fund solvent until December due to an increasing rate of non-payment.

She called for at least $60 million in funding.

Henderson's name appeared elsewhere in the emails after she made statements in October 2015 that the state had only wired Flint $2 million of the $6 million approved by legislatures for its reconnection to the Detroit water system.

She claimed the city was required to pay the Detroit system $12 million upfront.

The Flint Journal asked Snyder's office for clarification to the funding discrepancy. Emails released by the governor show the question was forwarded to other staffers in Snyder's administration, including Snyder's then Chief of Staff Dennis Muchmore.

"Push back hard on this," Muchmore said. "Natasha Henderson is becoming a liability."

The emails claimed the initial agreement was for monthly payments, but, unbeknownst to the state, the city entered into an arrangement for one upfront sum and payment. The state said it would take arrangements to immediately wire the funds to the city for payment.

No response has been filed to the lawsuit. No court dates are currently scheduled.