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Dan Walters: Corruption flourishes in Los Angeles County (link): Los Angeles County contains a quarter of the state's population and is home to the nation's second most populous city, more than 80 smaller cities, a like number of school districts and literally hundreds of single-purpose districts providing fire protection, water, parks, recreation and other services.
The county itself and each of those entities has its own board, administrative superstructure and the power to extract fees and taxes and to borrow money. Collectively, they probably disburse about $100 billion a year for one purpose or another.
That's big money in anyone's book, but the impact of Los Angeles' local governments goes beyond collecting and spending money. Their actions have other, immense economic consequences, such as deciding whether land developments can proceed and under what conditions, or who pays what for water.
That brings us to the FBI's recent interest in the Calderon family of politicians, in part involving its dealings with a small water district in the San Gabriel Valley, which is also home to Bell and other tainted local governments.
We don't know whether the investigation will result in prosecutions, but what's come to light so far – high-dollar consulting contracts, turf battles between water districts, etc. – are indications that it's another example of a familiar local political genre.
We should not be depending on the FBI to root out corruption. If it's endemic – in L.A. or elsewhere – state and local authorities should be attacking it vigorously.
(Mod: A small water district in the San Gabriel Valley? Aren't we supposed to start buying our water from something like that soon?)
Raid draws attention to state's water districts(link): The FBI's investigation of a state lawmaker has brought attention to an arm of government that is at once indispensable and nearly invisible - public agencies that pipe water to millions of people and vast swaths of farmland yet operate with scant oversight or public scrutiny.
In a state where water, the economy and politics are intertwined, California has hundreds of local agencies that oversee the pumps and pipes that bring water to fields, homes, schools and industry. Yet the agencies' board elections are often ignored by voters, and little attention is paid to the six-figure salaries, generous pensions and hundreds of millions of dollars in contracts they hand out.
Dozens of water agencies throughout California even ignore the annual requests by the state controller's office to provide salary and staffing information so it can be available publicly. Such agencies typically break into the headlines only when something goes wrong.
"They are completely under the radar," said Robert Stern, former president of the Center for Governmental Studies in Los Angeles. "Who are these people? Yet, they have lots of power."
The potential link to the Central Basin district in the federal investigation is only the most recent example of a local water district becoming the subject of public scrutiny because of potential misdeeds. Previous scandals involving water agencies have uncovered fraud, bribes and lavish expenses and travel.
The number of local water agencies in California is staggering and each has its own bureaucracy. The Association of California Water Agencies represents nearly 440 public agencies accounting for about 90 percent of the state's water use, with the remainder generally provided by private and investor-owned utilities.
Former federal prosecutor Joseph Akrotirianakis says the little-noticed agencies remain ripe targets for abuse, despite increased public awareness after a widely publicized pay scandal involving public officials in the Los Angeles suburb of Bell.
"These are literally open meetings, but are they?" said Akrotirianakis, who handled corruption cases in Los Angeles. "There's a lot of abuse that goes on without a lot of scrutiny."
(Mod: Don't look now, but I think one of them now has just opened a pipeline into Sierra Madre.)
SEC investigating failed El Monte Transit Village, subpoenas many entities for records (link): The U.S. Securities and Exchange Commission has opened an investigation into the federally shuttered El Monte Transit Village, a subpoena issued June 26 shows.
The subpoena signed by Carol Lally of the SEC's Office of Enforcement requests records from or related to TV, LLC; AC Landmarks, LLC; EM Incubator, LP; El Monte Regional Center; Pacifica Manufacturer Direct Business Incubator; and the El Monte Transit Village project.
The SEC's investigation aims to pinpoint every investor, owner, employee, source of income, financial account, office location, telephone service provider and correspondence produced by the listed entities since 2009.
TV, LLC must produce those documents, along with a declaration certifying the records, by 9 a.m. July 10 at the SEC's Los Angeles office.
John S. Leung, an Alhambra resident who headed the Transit Village project until its demise in 2009, acknowledged the SEC's investigation.
"They're looking at some of the transactions," he said. "I'm not worried about that issue."
U.S. Citizenship and Immigration Services shut down the El Monte Regional Center, which included the Transit Village project, in 2011. The regional center allowed foreign investors to obtain green cards through the U.S. EB-5 Visa program in exchange for investing $500,000 locally. The feds terminated the center, which largely funneled investments toward the failed El Monte Transit Village, after determining it had only attracted two investors and no longer promoted economic growth, according to a San Gabriel Valley Tribune story at the time.
The SEC's investigation relates to the possibility that investors -- likely investing in an attempt to receive an EB-5 work visa -- were taken advantage of and whether the promoters of the regional center were in compliance with securities laws, Gondek said. None of the program's foreign investors landed a green card through the regional center, he said.
"Many of the issues that the SEC is interested in pursuing are things that the city of El Monte has been concerned with for a couple of years now," Gondek said.
(Mod: Green card laundering, now there is a growing opportunity. John S. Leung, hmm. The name rings a bell. Oh, that's right. He is on the Board of Directors of the San Gabriel Valley Metropolitan Water District. You know, where we are about to start buying our water? I think Bart Doyle knows him as well. They used to work together.)
(SCAG President) Greg Pettis drew private pay while on public business - Cathedral City councilman says there is nothing wrong with his 'multi-tasking,' but watchdog, others see ethical conflicts(link): While traveling on his city expense account, Cathedral City Councilman Greg Pettis routinely submitted salary invoices at $100 an hour to California State University, where he is employed as a public relations and fundraising director.
By his own account, Pettis “multi-tasked” during trips to Washington, D.C., and Los Angeles, switching roles during the same conversation from council member on city business to university employee asking for grants to benefit his employer.
At times, Pettis wore a third hat during these taxpayer-funded trips as a board member and vice president of the Southern California Association of Governments (SCAG), which recently awarded the university a $50,000 grant for a project Pettis organized, according to documents obtained by The Desert Sun.
Those various roles caught the attention of SCAG executive director Hasan Ikhrata, who asked Pettis to sign a conflict of interest policy pledging that he is compliant with federal and state requirements to not have “direct or indirect financial interest” in a deal between SCAG and California State University, San Bernardino’s University Enterprise Corporation.
Before he signed the pledge, Pettis’ own work logs for CSUSB show Pettis was in active pursuit of grant money from SCAG. At least six times between 2010 and late 2012, Pettis asked CSUSB to pay him for hours he spent soliciting SCAG’s top leaders for a grant or “future funding” to benefit CSUSB’s Palm Springs Institute for Environmental Sustainability, where he worked.
A month before he signed the pledge, Pettis indicates on his payroll log that the grant was already approved: “Met with Hasan Ikhrata of SCAG to discuss our current grant and future funding.”
Last month, Pettis was named president of SCAG, California’s largest regional planning organization with $38.5 million in revenue and $8 million in assets. Cathedral City pays membership dues to the group, $4,150 this year, and Pettis files routine expense reports with SCAG for mileage and travel reimbursement. He earns an additional stipend of $120 per meeting to attend up to six SCAG meetings a month.
According to work logs Pettis submitted to CSUSB, the councilman has met with SCAG’s top leaders nine times since 2009 on behalf of the Sustainability Institute.
Ikhrata told The Desert Sun in an email that he did not know Pettis was submitting $100-an-hour timesheets with CSUSB for meetings with Ikhrata, chief deputy Sharon Neely and deputy director Darin Chidsey.
As a board member and now president, Pettis has significant influence on an association that solicits funding and support for billions of dollars of transportation and housing projects in six counties and 190 cities, including Los Angeles, Anaheim, Long Beach, Riverside and all of the Coachella Valley’s cities.
Earlier this year, SCAG approved the $50,000 grant to the Sustainability Institute for a project Pettis organized to teach Desert Hot Springs High School seniors how to create a “sustainability plan.”
(Mod: We have posted about newly appointed SCAG President Greg Pettis and his unique problems with indebtedness - link. But milking his SCAG connection for personal gain? The $50k in taxpayer dough for high school student sustainability studies sure is an ironic touch. But that's SCAG for you. At a time when city governments are going bankrupt in California at an alarming rate, how better to spend our dough?)
Realtors' ads in 16th Senate District race have California Democrats fuming(link): The flier that hit Fresno-area mailboxes last month shows a maimed puppy – patchy fur, eyes covered with lesions – next to the face of Leticia Perez, the Democrat running in a tight race to fill a vacant seat in the California Senate.
As a defense lawyer, the ad says, Perez represented a man accused of taping the dog's mouth shut, spraying its eyes with bleach and beating it with a golf club.
"The Valley deserves better," says the mailer promoting Republican Andy Vidak for the seat that represents parts of Fresno, Kern, Kings and Tulare counties.
Negative advertising has become a staple of modern politics. But the hits, including this one being paid for by the California Association of Realtors, have generated an especially angry response from Democratic leaders in the state Capitol.
"It is shocking. It is over the top," said Senate President Pro Tem Darrell Steinberg, D-Sacramento. "An election is an election. Stakeholders and interest groups get involved. … (But) this is beyond the pale."
The Realtors association has poured nearly $1 million into efforts to influence the July 23 election in the 16th Senate District.
The race is a crucial one for Steinberg and other Democrats in the Capitol, who have enjoyed a two-thirds supermajority that allows them to raise fees and taxes without any Republican votes.
Senate Democrats flexed that power for the first time this year when they voted in May to approve a bill that puts a $75 fee on some real estate transactions to fund affordable housing programs. The California Association of Realtors opposed the measure, Senate Bill 391, setting off a political spat that appears to be shaping the race to replace former state Sen. Michael Rubio.
(Mod: Wow. The California Association of Realtors versus Darrell Steinberg. How could you possibly pick a side?)
This concludes today's report.
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