Obviously, we need more transparency in government.
Parks boss steps down over secret funds
The state discovered $54 million hidden from budget makers
By Ashly McGlone and Matt Clark
UT-SD
July 20, 2012
The discovery of $54 million stashed away in the state parks department has resulted in the resignation of the agency’s director and the firing of a top assistant.
The state is launching an agencywide audit of the parks department — and is reviewing all 560 special funds in the state budget, which hold upwards of $33.4 billion.
...“I am floored,” said Rick Barclay, chairman of the Friends of Palomar Mountain State Park, a group that spent the last year gathering donations to insure that one of the most popular local state parks in the county would remain open. “If that money really was there and could have been used to keep parks open, then we will all be scratching our heads wondering, why did we go through all that.”
Some 70 parks were threatened with closure this year in anticipation of $22 million in cuts to the department’s $364 million operating budget.
In late June the parks department announced that, at least for the time being, enough money had been found to keep all 70 parks open. Those included the San Pasqual Historic Battlefield museum near the San Diego Zoo Safari Park, and two large state recreation areas in Imperial County: Salton Sea and Picacho on the Colorado River.
Bill Meister, president of the nonprofit Sea and Desert Interpretive Association which has been fighting to keep the Salton Sea State Recreation Area open, said he was shocked by the news.
“An awful lot of people — employees, lovers of the park — have had a lot of sleepless nights not knowing if they were going to have jobs or if the park would close,” he said. “We’ll have to see how this all plays out, but it doesn’t look good.”
State investigators in January began looking into a secret $271,000 vacation cashout program for parks staffers. Officials tapped the department’s new deputy director of administrative services, Aaron Robertson, to examine agency finances. He is credited with finding the hidden funds.
State investigators have determined that nearly $20.4 million, or 39 percent of the money in the State Parks and Recreation Fund, was not disclosed to state budget officials. Nearly $33.5 million, or 20 percent, of the money in the parks’ Off Highway Vehicle Fund was also not reported. Both accounts subsist on revenue from park visitor fees.
The finance department and the attorney general are reviewing whether criminal activity was involved in hiding the assets. Officials said preliminary findings suggest the reporting errors date back at least 12 years.
Ruth Coleman, state parks director for the last eight years, resigned Thursday, even as she said she had no knowledge of the hidden funds.
“I have always taken the public trust to heart and honored it and I am personally appalled to learn that our documents were not accurate,” Coleman wrote in her resignation letter to the governor.
Showing posts with label Whistleblowers. Show all posts
Showing posts with label Whistleblowers. Show all posts
Saturday, July 21, 2012
Sunday, July 17, 2011
Allegation in lawsuit: Mayor Jerry Sanders or one of his deputies fired a high-level San Diego whistle-blower
Salacious City Lawsuit Nears Trial
Jul 17, 2011
by Liam Dillon
Voice of San Diego
The two-year-old allegations are as salacious as they come: Mayor Jerry Sanders or one of his deputies fired a high-level city of San Diego employee because he was helping investigate contracting involving one of the mayor's supporters.
And the lawsuit that makes those allegations doesn't show signs of going away.
Last month, the City Council approved an additional $250,000 to defend the case on top of the $200,000 the city has already spent on outside attorneys. The $450,000 cost doesn't include more than a year of work by the City Attorney's Office before it bowed out of the case. A trial date in San Diego Superior Court has been set for Oct. 7.
The city's outside lawyer, Janice Brown, said the money for her bills is well spent. The former employee's current settlement offer is at least three to four times the entire bill, she told the City Council.
The gulf between the two sides is as wide as the allegations' seriousness.
Former city deputy economic development director Scott Kessler filed suit in July 2009, alleging the Mayor's Office directed him to bend contracting rules to favor Marco Li Mandri, a well-known civic leader in the city's Little Italy neighborhood and a Sanders supporter. Kessler says he refused. Kessler also argues the Mayor's Office ultimately fired him after he gave a copy of a joint FBI and San Diego Police Department investigation he obtained about Li Mandri's involvement in a North Bay parking and business improvement district to the city's Ethics Commission. (That criminal case never came to anything. San Diego District Attorney Bonnie Dumanis' office didn't pursue charges in that case, and Li Mandri has denied any wrongdoing.)
Sanders' office says it never told Kessler to improperly favor Li Mandri. It maintains Kessler wasn't laid off for his cooperation with any investigation. Instead, it argues it laid off Kessler, along with numerous other high-level managers, as part of mid-year budget cuts in 2008.
The lawsuit has been contentious and included a rare deposition of Sanders. The mayor has denied repeatedly all of the allegations including as recently as in an interview last week. Brown, the city's outside attorney, said the same to City Council last month.
"We believe that we'll have an opportunity in front of a jury to show that they're not true," she said. "That's why we're opposing it."
But for the last eight months, the case hasn't focused on these scandalous claims. Instead, both sides have fought primarily over an administrative issue: whether Kessler needed to complain formally to the city's Ethics Commission about his firing before filing suit.
This legal defense, Brown said, not only protects the city in this case, but also sets a precedent for any future employment lawsuits against the city. If successful, she said, it could save the city time and money going forward. Brown, who is a former federal Justice Department attorney and former board member of the city's downtown redevelopment agency, added she has cut her hourly rate almost in half to $260 for her work on the case. Through the end of May, lawyers at her firm had spent more than 700 hours on the lawsuit, invoices show.
Settling the case hasn't been an option because Kessler is asking for too much money, Brown added. His most recent settlement offer is for $1.5 million. The city hasn't bothered countering.
"Do you respond to that in real numbers or do we say, 'You're out of the stratosphere?'" Brown said in an interview.
Kessler's attorney, Joshua Gruenberg, said the city should bother with a counter offer. It's typical for plaintiffs to take less than their initial demand, he said. Gruenberg added that he made his first settlement offer in November 2009 for less than $1 million. The cost has increased because of all the hours he's worked since.
"I don't know if I've ever spent more time on a case than this one," Gruenberg said. He added he believed Kessler would prevail in court.
Regardless, both Gruenberg and Brown said they were open to settlement talks before the Oct. 7 trial. A lot of legal issues remain. Gruenberg is trying to depose the mayor for a second time and Brown is fighting it. The question about Kessler needing to make a formal complaint about his firing to the Ethics Commission before filing a lawsuit is unresolved. Then, of course, there's Kessler's actual wrongful termination claims to decide.
Asked if the cost of defending the lawsuit was justifiable, Sanders replied, "I would imagine you would want an attorney defending you if you were sued also."
[Maura Larkins comment: Of course we would, Jerry. But we'd have to pay for it. The problem here is, the taxpayers are paying for your expensive lawyers. You should have settled long ago.]
Jul 17, 2011
by Liam Dillon
Voice of San Diego
The two-year-old allegations are as salacious as they come: Mayor Jerry Sanders or one of his deputies fired a high-level city of San Diego employee because he was helping investigate contracting involving one of the mayor's supporters.
And the lawsuit that makes those allegations doesn't show signs of going away.
Last month, the City Council approved an additional $250,000 to defend the case on top of the $200,000 the city has already spent on outside attorneys. The $450,000 cost doesn't include more than a year of work by the City Attorney's Office before it bowed out of the case. A trial date in San Diego Superior Court has been set for Oct. 7.
The city's outside lawyer, Janice Brown, said the money for her bills is well spent. The former employee's current settlement offer is at least three to four times the entire bill, she told the City Council.
The gulf between the two sides is as wide as the allegations' seriousness.
Former city deputy economic development director Scott Kessler filed suit in July 2009, alleging the Mayor's Office directed him to bend contracting rules to favor Marco Li Mandri, a well-known civic leader in the city's Little Italy neighborhood and a Sanders supporter. Kessler says he refused. Kessler also argues the Mayor's Office ultimately fired him after he gave a copy of a joint FBI and San Diego Police Department investigation he obtained about Li Mandri's involvement in a North Bay parking and business improvement district to the city's Ethics Commission. (That criminal case never came to anything. San Diego District Attorney Bonnie Dumanis' office didn't pursue charges in that case, and Li Mandri has denied any wrongdoing.)
Sanders' office says it never told Kessler to improperly favor Li Mandri. It maintains Kessler wasn't laid off for his cooperation with any investigation. Instead, it argues it laid off Kessler, along with numerous other high-level managers, as part of mid-year budget cuts in 2008.
The lawsuit has been contentious and included a rare deposition of Sanders. The mayor has denied repeatedly all of the allegations including as recently as in an interview last week. Brown, the city's outside attorney, said the same to City Council last month.
"We believe that we'll have an opportunity in front of a jury to show that they're not true," she said. "That's why we're opposing it."
But for the last eight months, the case hasn't focused on these scandalous claims. Instead, both sides have fought primarily over an administrative issue: whether Kessler needed to complain formally to the city's Ethics Commission about his firing before filing suit.
This legal defense, Brown said, not only protects the city in this case, but also sets a precedent for any future employment lawsuits against the city. If successful, she said, it could save the city time and money going forward. Brown, who is a former federal Justice Department attorney and former board member of the city's downtown redevelopment agency, added she has cut her hourly rate almost in half to $260 for her work on the case. Through the end of May, lawyers at her firm had spent more than 700 hours on the lawsuit, invoices show.
Settling the case hasn't been an option because Kessler is asking for too much money, Brown added. His most recent settlement offer is for $1.5 million. The city hasn't bothered countering.
"Do you respond to that in real numbers or do we say, 'You're out of the stratosphere?'" Brown said in an interview.
Kessler's attorney, Joshua Gruenberg, said the city should bother with a counter offer. It's typical for plaintiffs to take less than their initial demand, he said. Gruenberg added that he made his first settlement offer in November 2009 for less than $1 million. The cost has increased because of all the hours he's worked since.
"I don't know if I've ever spent more time on a case than this one," Gruenberg said. He added he believed Kessler would prevail in court.
Regardless, both Gruenberg and Brown said they were open to settlement talks before the Oct. 7 trial. A lot of legal issues remain. Gruenberg is trying to depose the mayor for a second time and Brown is fighting it. The question about Kessler needing to make a formal complaint about his firing to the Ethics Commission before filing a lawsuit is unresolved. Then, of course, there's Kessler's actual wrongful termination claims to decide.
Asked if the cost of defending the lawsuit was justifiable, Sanders replied, "I would imagine you would want an attorney defending you if you were sued also."
[Maura Larkins comment: Of course we would, Jerry. But we'd have to pay for it. The problem here is, the taxpayers are paying for your expensive lawyers. You should have settled long ago.]
Tuesday, December 18, 2007
Whistleblowers out of luck in San Diego
The following article is from Voice of San Diego:
Despite Advice, Mayor Still Controls Whistleblower Hotline
By EVAN McLAUGHLIN Voice Staff Writer
Dec. 17, 2007 | Employees at the city of San Diego still do not have an outlet for anonymously reporting financial misconduct to the City Council's Audit Committee, even though a rule requiring the panel to field the concerns of whistleblowers was put in place seven months ago.
Instead, officials for Mayor Jerry Sanders are still in charge of the hotline. It keeps in place an arrangement in which City Hall's boss oversees the very forum where potentially embarrassing complaints about his administration are registered, while also having the power to fire the thousands of city employees prone to use the hotline.
Dailing Out
The Issue: The whistleblower hotline is overseen by the Mayor’s Office even though city law says a City Council committee should field the complaints.
What It Means: That puts the mayor in the position of supervising the very hotline that could field embarrassing complaints about his administration.
The Bigger Picture: Along with the auditor and appointments to the Audit Committee, it’s recommended the hotline is also made independent of the mayor.
It's a dynamic that concerns some officials who want to ensure the whistleblower process is an effective fix for a city that has suffered the scrutiny federal investigators and the loss of the its credit rating because of past breakdowns in financial controls.
"Any employees that might want to blow the whistle on something and it's a particularly sensitive issue to the mayor's administration, that might cause them to pause," said Jeff Kawar, a fiscal and policy analyst at the council's Office of the Independent Budget Analyst.
The hotline is among the several remedies recommended by outside consultants at Kroll Inc. and Vinson & Elkins. Together, the city paid more than $25 million to for the firms' expert opinions.
The two firms were hired after the discovery of errors and omission in the city's financial statements, in which the magnitude of the city's looming multibillion-dollar pension and retiree health care liabilities were downplayed.
Related Links
Both Mayor and Council Seek Majority Power for Committee (Aug. 9, 2007)
Hired to Reform, Former Auditor Left Unhappy with Mayor's Control (Feb. 26, 2007)
The inaccurate financial statements attracted the attention of the Securities and Exchange Commission, which has since sanctioned the city for securities fraud and fined its former auditor. Audit firms the city hired subsequent to the 2002 and 2003 disclosure problems have withheld their blessings of the city's financial statements, which has in turn barred the city from Wall Street.
Vinson & Elkins and Kroll concluded that weak internal controls -- the checks and balances of ensuring financial statements accurately reflect the city's financial health -- contributed to the city's reporting errors in 2002 and 2003.
Objections to the city's disclosures were first aired by pension trustee Diann Shipione, who didn't have the luxury of a confidential hotline. Instead, when Shipione sounded the alarms on the reporting errors and the controversial deal forged between the city and its retirement board, she was derided as crazy and vindictive. Pension officials tried to embarrass her by taking out an advertisement in a local newspaper that compared her to Chicken Little and sought to have police arrest her at a meeting.
Kroll and Vinson & Elkins recommended setting up an employee hotline, where employees could report concerns of misconduct anonymously and confidentially. Both firms saw it as a way to bring to light the city's financial reporting problems before they reach the desks of potential bond investors.
Each consultant advised the city to have a panel independent of the Mayor's Office handle calls. In May, the council followed the path laid out by Kroll, who recommended that the Audit Committee review the complaints that were cataloged on the hotline.
However, establishing the hotline has become one of several growing pains for the new committee, which was created in January. Many of Kroll's recommendations for the committee depend on the decisions of voters, who will need to change the city's bylaws in order to remove many auditing powers from the mayor's supervision as the firm recommended.
The Audit Committee expects to hear a presentation next month from outside consultants at Jefferson Wells about the best way to handle the hotline, said Councilman Kevin Faulconer, the panel's chairman. Faulconer said he wants to know how other cities arrange their hotlines so that the city can follow the best practices of government.
One city where the mayor is not involved in overseeing the hotline is Los Angeles. Employee complaints are routed either through the controller, who is elected, or the Ethics Commission, which is appointed by various city officials.
Lee Ann Pelham, the executive director of the Los Angeles City Ethics Commission, said employees would be more reluctant to complain about misconduct at work if they knew their calls were being handled by someone who worked for their boss.
"The hallmark of a workable ethics system is the ability to refer something to an office independently and confidentially," Pelham said.
Jo Anne SawyerKnoll, who heads Sanders' Office of Ethics & Integrity, said concerns that the mayor is too close to the hotline are unfounded. Sanders and his staff don't meddle in the complaints and because safeguards are in place, such as how the calls are fielded by a company outside the city.
"In theory, there is nothing wrong with the whistleblower line and program to be under the mayor as long as you have certain things in place that allow it to be confidential and anonymous," SawyerKnoll said.
SawyerKnoll said that an overwhelming number of complaints don't deal with misconduct. Her office doesn't investigate the alleged malfeasance. Rather, it refers complaints to the city auditor, who also reports to the mayor. She said she welcomes the council committee's involvement when it gets a process for reviewing complaints in place.
Until the Audit Committee takes over, the hotline rests with Sanders, who has gained more and more control of the complaint forum -- both by his designs and others' -- since he took office.
Former City Auditor John Torell created the hotline in 2005 before the city switched to the voter-approved strong-mayor form of government, when his office was removed from the city manager's administration and was instead controlled by the mayor and eight City Council members.
But once Sanders was put in charge of the entire city workforce, including the city auditor, in 2006, the hotline became the purview of the mayor. Torell bristled at the idea of reporting to Sanders, saying he didn't have enough independence from the administration he was tasked with inspecting. The hotline became one of the many new internal controls that would be compromised if it remained in the custody of mayoral officials, he said.
Several months into the strong-mayor structure, Sanders plucked the hotline from Torell and handed it to the Office of Ethics & Integrity. Torell then became one of four officials to serve on a committee that heard the complaints that were left on the hotline before he departed City Hall in a huff because of his diminished independence nearly one year ago.
Please contact Evan McLaughlin directly with your thoughts, ideas, personal stories or tips. Or send a letter to the editor.
http://www.voiceofsandiego.org/articles/2007/12/18/government/614hotline121707.txt
Despite Advice, Mayor Still Controls Whistleblower Hotline
By EVAN McLAUGHLIN Voice Staff Writer
Dec. 17, 2007 | Employees at the city of San Diego still do not have an outlet for anonymously reporting financial misconduct to the City Council's Audit Committee, even though a rule requiring the panel to field the concerns of whistleblowers was put in place seven months ago.
Instead, officials for Mayor Jerry Sanders are still in charge of the hotline. It keeps in place an arrangement in which City Hall's boss oversees the very forum where potentially embarrassing complaints about his administration are registered, while also having the power to fire the thousands of city employees prone to use the hotline.
Dailing Out
The Issue: The whistleblower hotline is overseen by the Mayor’s Office even though city law says a City Council committee should field the complaints.
What It Means: That puts the mayor in the position of supervising the very hotline that could field embarrassing complaints about his administration.
The Bigger Picture: Along with the auditor and appointments to the Audit Committee, it’s recommended the hotline is also made independent of the mayor.
It's a dynamic that concerns some officials who want to ensure the whistleblower process is an effective fix for a city that has suffered the scrutiny federal investigators and the loss of the its credit rating because of past breakdowns in financial controls.
"Any employees that might want to blow the whistle on something and it's a particularly sensitive issue to the mayor's administration, that might cause them to pause," said Jeff Kawar, a fiscal and policy analyst at the council's Office of the Independent Budget Analyst.
The hotline is among the several remedies recommended by outside consultants at Kroll Inc. and Vinson & Elkins. Together, the city paid more than $25 million to for the firms' expert opinions.
The two firms were hired after the discovery of errors and omission in the city's financial statements, in which the magnitude of the city's looming multibillion-dollar pension and retiree health care liabilities were downplayed.
Related Links
Both Mayor and Council Seek Majority Power for Committee (Aug. 9, 2007)
Hired to Reform, Former Auditor Left Unhappy with Mayor's Control (Feb. 26, 2007)
The inaccurate financial statements attracted the attention of the Securities and Exchange Commission, which has since sanctioned the city for securities fraud and fined its former auditor. Audit firms the city hired subsequent to the 2002 and 2003 disclosure problems have withheld their blessings of the city's financial statements, which has in turn barred the city from Wall Street.
Vinson & Elkins and Kroll concluded that weak internal controls -- the checks and balances of ensuring financial statements accurately reflect the city's financial health -- contributed to the city's reporting errors in 2002 and 2003.
Objections to the city's disclosures were first aired by pension trustee Diann Shipione, who didn't have the luxury of a confidential hotline. Instead, when Shipione sounded the alarms on the reporting errors and the controversial deal forged between the city and its retirement board, she was derided as crazy and vindictive. Pension officials tried to embarrass her by taking out an advertisement in a local newspaper that compared her to Chicken Little and sought to have police arrest her at a meeting.
Kroll and Vinson & Elkins recommended setting up an employee hotline, where employees could report concerns of misconduct anonymously and confidentially. Both firms saw it as a way to bring to light the city's financial reporting problems before they reach the desks of potential bond investors.
Each consultant advised the city to have a panel independent of the Mayor's Office handle calls. In May, the council followed the path laid out by Kroll, who recommended that the Audit Committee review the complaints that were cataloged on the hotline.
However, establishing the hotline has become one of several growing pains for the new committee, which was created in January. Many of Kroll's recommendations for the committee depend on the decisions of voters, who will need to change the city's bylaws in order to remove many auditing powers from the mayor's supervision as the firm recommended.
The Audit Committee expects to hear a presentation next month from outside consultants at Jefferson Wells about the best way to handle the hotline, said Councilman Kevin Faulconer, the panel's chairman. Faulconer said he wants to know how other cities arrange their hotlines so that the city can follow the best practices of government.
One city where the mayor is not involved in overseeing the hotline is Los Angeles. Employee complaints are routed either through the controller, who is elected, or the Ethics Commission, which is appointed by various city officials.
Lee Ann Pelham, the executive director of the Los Angeles City Ethics Commission, said employees would be more reluctant to complain about misconduct at work if they knew their calls were being handled by someone who worked for their boss.
"The hallmark of a workable ethics system is the ability to refer something to an office independently and confidentially," Pelham said.
Jo Anne SawyerKnoll, who heads Sanders' Office of Ethics & Integrity, said concerns that the mayor is too close to the hotline are unfounded. Sanders and his staff don't meddle in the complaints and because safeguards are in place, such as how the calls are fielded by a company outside the city.
"In theory, there is nothing wrong with the whistleblower line and program to be under the mayor as long as you have certain things in place that allow it to be confidential and anonymous," SawyerKnoll said.
SawyerKnoll said that an overwhelming number of complaints don't deal with misconduct. Her office doesn't investigate the alleged malfeasance. Rather, it refers complaints to the city auditor, who also reports to the mayor. She said she welcomes the council committee's involvement when it gets a process for reviewing complaints in place.
Until the Audit Committee takes over, the hotline rests with Sanders, who has gained more and more control of the complaint forum -- both by his designs and others' -- since he took office.
Former City Auditor John Torell created the hotline in 2005 before the city switched to the voter-approved strong-mayor form of government, when his office was removed from the city manager's administration and was instead controlled by the mayor and eight City Council members.
But once Sanders was put in charge of the entire city workforce, including the city auditor, in 2006, the hotline became the purview of the mayor. Torell bristled at the idea of reporting to Sanders, saying he didn't have enough independence from the administration he was tasked with inspecting. The hotline became one of the many new internal controls that would be compromised if it remained in the custody of mayoral officials, he said.
Several months into the strong-mayor structure, Sanders plucked the hotline from Torell and handed it to the Office of Ethics & Integrity. Torell then became one of four officials to serve on a committee that heard the complaints that were left on the hotline before he departed City Hall in a huff because of his diminished independence nearly one year ago.
Please contact Evan McLaughlin directly with your thoughts, ideas, personal stories or tips. Or send a letter to the editor.
http://www.voiceofsandiego.org/articles/2007/12/18/government/614hotline121707.txt
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