Why was inmate back on streets?

In the early morning hours of Oct. 17, when he was supposed to be in bed at a Seattle halfway house, convicted killer Terrell Milam was outside a Pioneer Square nightclub, where some believe he was involved in an assault that sent Seattle Seahawks safety Ken Hamlin to the hospital.

Three hours later Milam was found fatally shot near Seward Park.

While both the slaying and assault remain unsolved, a federal investigation into how Milam was able to leave Pioneer Fellowship House hours before he was killed resulted in the firing of one halfway-house employee and the resignation of another, according to a report from the Federal Bureau of Prisons.

Though the internal investigation found insufficient evidence to prove halfway-house employees were accepting bribes in exchange for allowing inmates to roam free at night, investigators found that two female employees violated facility policies — one by failing to verify Milam's presence; the other, by possibly engaging in an improper relationship with him.

But Milam's wife and brother maintain that Milam and other inmates bribed their way out of the halfway house by paying $50 a night to have their names added to nightly head-count lists when they were gone.

Hamlin, who was apparently struck in the head with a metal street sign and suffered a fractured skull and a broken hand during the brawl outside Larry's Nightclub, missed most of the 2005 football season but has returned to play this season. Milam's brother has said Milam was the one who struck Hamlin, but police have not said whether they think Milam assaulted the football player.

Police on Thursday wouldn't comment on the investigation but earlier said they had found no link between the assault and Milam's slaying.

According to the Bureau of Prisons report obtained through the Freedom of Information Act, staff members at the facility at 11th Avenue and East Alder Street are required to do seven "accountability checks" from 11 p.m. to 7 a.m. If an inmate is in bed, the staff member is to "visually confirm" that the resident is there by checking the resident's hair, skin or breathing, the report says.

After Milam's body was found about 5 a.m. Oct. 17, facility staff members discovered a dummy in his bed that "appeared to be a realistic impression of a person sleeping," the report says. The building's design, the report says, made it possible for Milam to leave through a second-floor window, walk along a roof for a short distance and drop about 6 feet to the ground without being detected.

A female staff member on duty the night Milam was killed admitted "she did not always ensure she saw skin when she conducted her counts." A male employee told investigators the woman told him she would conduct all of the counts during their graveyard shift.

"He said her request was unusual because they ordinarily took turns counting the facility," the report says. According to the report, the woman denied ever accepting money from inmates.

Investigators sustained a finding against the woman for inattention to duty and failure to follow policy in connection with Milam's escape.

Because of heavy redactions to the report, it is unclear which of the employees quit and which one was fired. Both left the halfway house before the results of the investigation were published, and no further disciplinary action was taken, the report says.

Milam, who spent 10 years in federal prison on a manslaughter conviction, was sent to Pioneer Fellowship House after violating his parole conditions. The facility is one of six "correctional residences" operated by Pioneer Human Services, a Seattle social-services agency that helps addicts and ex-offenders reintegrate into the community, according to the agency's Web site.

Officials at Pioneer Human Services referred questions about the internal investigation to the Federal Bureau of Prisons in Washington, D.C. A bureau spokeswoman did not provide additional information on the investigation Thursday. Milam's younger brother, Tramaine Isabell, said both Milam and his roommate "got out by paying this lady not to look for skin" with the understanding that they needed to sneak back into the facility before her shift ended at 6 a.m.

"He said, 'I've got this [woman] in there and I be hitting her off for 50 bucks ... and in return, all I have to do is put my backpack in the bed and she knows to miss me,' " Isabell said.

He said there is no way his brother could sneak out without inside help: "How can you be in a federal detention place for felons and just sneak out the window? It's that simple? That don't make sense."

Milam's wife, Olamae Milam, said she lived at Pioneer Fellowship House on six occasions for parole violations. She said she spent three weeks at the facility this summer and was released Aug. 30.

"Everybody is in there drinking every night and paying staff to leave every night," she said. "It's still the same thing."

A second female employee at Pioneer claimed she was Milam's "childhood sweetheart" and that they renewed their friendship when Milam entered the halfway house, the report says. The employee attended Milam's funeral and when she reported for work later that day, there were allegations she was drunk and brought alcohol to share with inmates who knew Milam, the report says.

The investigation found insufficient evidence that the woman was drunk or that she brought alcohol into the facility, the report says. Investigators did find that she had improper contact with an inmate's family and that there was an appearance of an inappropriate relationship with an inmate, according to the report.

Sara Jean Green: 206-515-5654 or sgreen@seattletimes.com