Findings from an unprecedented three-year Grand Jury investigation into allegations of fiscal mismanagement and corruption in Victorville will be released Friday. The city is also under investigation by the FBI and the Securities and Exchange Commission, official sources say.

 

Joe Nelson, Staff Writer
Posted: 06/26/2012 01:19:33 PM PDT

Findings from a three-year grand jury investigation into allegations of fiscal mismanagement and corruption in Victorville are expected to be released Friday.

The grand jury concluded its unprecedented investigation in April, but Victorville City Manager Doug Robertson, who reviewed the report, said he signed a confidentiality agreement and cannot discuss any of the findings until its release to the public Friday.

That release will come as part of the county’s annual grand jury report, which investigates and scrutinizes county and city governments and their affiliated departments.

Victorville is also under investigation by the FBI and the Securities and Exchange Commission, which has been investigating the city’s bond debt for the last three years, official sources said.

Robertson downplayed the significance of the grand jury findings and the latest audit of the city – the third in the last three years – which again cited recurring losses and lack of cash flow as concerns that the city could be teetering on the brink of insolvency.

“I’m not overly concerned with the report,” Robertson said in an interview last month.

Like most cities, Victorville has struggled financially in the down economy and has relied on reserves to fund police and other essential services. He said the city added two more sheriff’s deputies last year when most cities are cutting back on public safety personnel.

“Public safety is and always has been the city’s top priority,” Robertson said, adding that the city’s sales tax revenue is increasing and that the City Council adopted a balanced budget for the 2012-13 fiscal year.

“Thankfully, the economy is coming back to meet us,” he said.

New businesses have moved into the city in the last year, including United Furniture Industries, which signed a nine-year lease with the city for 500,000 square feet of warehouse space at Southern California Logistics Airport. The move is expected to generate roughly 200 jobs in the short-term and up to 800 jobs in the long-term, Robertson said.

In addition, Church & Dwight Co., Inc., known for its Arm & Hammer line of products, this year relocated its distribution center, cat litter and liquid laundry soap manufacturing operations to SCLA, Robertson said.

Grand jurors began interviewing city officials in 2009 about questionable investments and other financial dealings. It started with inquiries into at least three alleged handshake deals former City Manager Jon Roberts made with contractors and an alleged smear campaign in 2008 against Ryan McEachron, who at the time was running for the City Council and is now mayor.

McEachron said at the time he suspected William Buck Johns, a wealthy industrial engineer from Newport Beach with business interests in Victorville, of spearheading the unsuccessful campaign to thwart McEachron’s election to public office.

Johns is a longtime supporter of Victorville’s old guard: Councilmen Mike Rothschild and Rudy Cabriales and former Councilman Terry Caldwell, who retired from the council in 2010 after 38 years of service.

Johns said Tuesday that neither he nor anybody from his company, Inland Energy Inc., have been contacted by the grand jury.

“Nobody has contacted us for the entire duration of this effort,” John said.

Johns was instrumental in pushing for a power plant coined Victorville II, or VV2, and a foreign investor program at SCLA – the logistics airport. He is also a big supporter of the proposed DesertXpress bullet train project that would link Victorville to Las Vegas.

U.S. Citizenship and Immigration Services, in an unprecedented action, pulled the plug on Victorville’s foreign investor program, called EB-5, last year, alleging it misrepresented the number of jobs that would be created by foreign investments into city infrastructure projects at SCLA.

The VV2 project has been suspended due to the economy.

Johns reserved comment on the grand jury and federal investigations until the release of the Grand Jury report.

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