California prosecutors launch criminal inquiry into parks ‘hidden funds’
By Kevin Yamamura, Sacramento Bee
The state attorney general’s office has launched a criminal investigation of California parks officials after the “hidden funds” case seemingly reached a dead end when state and local prosecutors did not pursue charges last month.
Peter Southworth, a supervising deputy at the attorney general’s office, disclosed to a joint legislative committee Wednesday the matter is “still under criminal review in my office.” He did not specify how long the inquiry would take.
Vikingsholm at Emerald Bay State Park at Lake Tahoe. Photo/LTN file
Three state agencies have found that California Department of Parks and Recreation officials hid funds for at least 13 years from state lawmakers and the Department of Finance. The Bee reported last year the parks department had cloaked a surplus beyond $20 million while Gov. Jerry Brown and lawmakers threatened to close 70 parks.
The revelations resulted in the resignation of state parks director Ruth Coleman and other disciplinary actions in the department last year.
Attorney General Kamala Harris’ office conducted a review that found “conscious and deliberate” acts to hide state parks fee revenue. It then transferred the file to Sacramento County District Attorney Jan Scully for review.
But the state office did not send the most damaging interview transcripts because it questioned employees using administrative, rather than criminal, procedures. The state office also did not identify who was to blame nor which laws were potentially broken.
Scully last month questioned why Harris had sent the case to her, saying that the attorney general’s office has “historic authority in the prosecution … of such cases.” The criminal pursuit was believed to be over at that point.
But Lynda Gledhill, spokeswoman for Harris, said her office decided to open a criminal investigation shortly after Scully declined to pursue charges, unbeknown to most until Southworth’s legislative testimony.
One curiosity in the state parks controversy is why department officials hid millions of dollars when they needed the Legislature’s approval to spend the funds.
State Auditor Elaine Howle in hearings this week referred to the hidden surplus as a “useless reserve” because parks officials in theory couldn’t spend the money without telling lawmakers of its existence. But that left some lawmakers unsatisfied.
“I can’t get my head around the nature of this,” said Assemblyman Bob Blumenfield, D-Woodland Hills, chairman of the Assembly Budget Committee, asking later Wednesday whether “sheer stupidity” was to blame. If officials couldn’t spend the money, Blumenfield wondered, what was their motive for willfully hiding the funds?
Howle acknowledged that after writing her 60-page audit last week, she and her colleagues were also scratching their heads.
But Howle later offered a credible, albeit complicated, hypothesis: The Legislature authorizes the parks department to spend a certain amount of self-generated fee revenue each year.
If the parks department had a down year for fee collection – say, receiving $15 million instead of $20 million that the Legislature projected – it’s possible the department could have tapped $5 million out of the hidden funds. The Legislature would have already given its approval for $20 million, so the department could spend the hidden $5 million rather than face cuts.
Howle said her office plans to further explore this possibility in the coming months.
This doesn’t sound criminal to me. From the information presented the money was being used to run a good department not to fund personal gain. It might have been wrong to have a savings account (hidden funds) but not criminal.
Hiding and lying to the tax payers about THE TAX PAYERS money, is that not at the least committing fraud?
What was being done with the money has absolutely nothing to do with it. Nothing.
As I see it Using it to pay government employee bonuses or any spiffs is a form of embezzlement.
California has big problems not the least of which is the loss of it’s government’s integrity.
The State needs to keep digging.
First, let’s take the auditor’s statement that “the hidden surplus [is] a “useless reserve” because parks officials in theory couldn’t spend the money without telling lawmakers of its existence”. If the accumulation of the secret reserve was unauthorized and done without the knowledge of the Controller’s office, the Legislature, and the Department of Finance, why should we believe that Parks would not have spent any of the secret money inappropriately
because the above named agencies would have had to have authorized the expenditures. If Parks could accumulate the money without their knowledge, they certainly could figure out how to spend it without there knowledge.
Second, if the state did not realize it was missing $20,000,000 in fee revenue, how much of that money was embezzled and stolen before it made it to the secret fund? A large portion of fee money comes in cash and it would pass through many different hands between the original transaction and the secret fund. If no one knew the fund existed, and no one know the fee money was missing, how can we be assured that none of the money was taken on the way to the bank?
It seems like the Sate wants this story to fade away without any real answers.
PRETTY BAD WHEN NO ONE TRUST NO ONE!