FBI, SEC investigations continue
June 29, 2012 1:03 PM
From Staff Reports
VICTORVILLE • The San Bernardino County Grand Jury issued a 100-page report Friday blasting Victorville for decisions that have jeopardized the city’s solvency, including mishandling bond funds, losing track of $13 million and potentially breaking the law by financing failed energy ventures with restricted money.
The grand jury called out several other potentially illegal moves the city has made, including loaning funds it couldn’t pay back, not properly documenting transactions and violating the state’s open records act.
No indictments were handed down with the report, as the civil group doesn’t have that authority. However, the Securities and Exchange Commission is still investigating whether Victorville illegally spent bond funds. Also, a source close to the investigation said the FBI continues to work with former grand jury members to look into whether there were criminal motives behind some of the decisions that led to Victorville’s massive debt and depleted reserves.
The grand jury has been investigating the city since spring 2009, with two different citizen groups and two independent auditing firms involved in the inquiry. (Click here to view a timeline along with links to relevant stories.)
Friday’s report focuses on five areas of concern: the city’s poor financial condition, its extensive inter-fund loans and use of restricted funds, its pricey attempts at power plant development, controversial hangars built at Southern California Logistics Airport and how Victorville spent hundreds of millions in bond funds.
Though the debt burdens and financial damage will be felt for decades to come, the majority of the problematic decisions cited by the grand jury were made in the mid-2000s. Current Mayor Pro Tem Rudy Cabriales and Councilman Mike Rothschild were both on the City Council then, along with Terry Caldwell, Bob Hunter and JoAnn Almond.
The report acknowledges that city management has also changed a great deal since many of these problems arose. However, the report notes that three individuals have been in key positions throughout: City Attorney Andre de Bortnowsky, City Manager Doug Robertson and Assistant City Manager Keith Metzler.
Based on their findings, the citizen group issued a slew of recommendations to clean up the city. Some would be procedural changes, such as documenting inter-fund loans properly. Others would be major shifts for Victorville, such as suggesting that the city consider turning Southern California Logistics Airport over to a regional authority, look into dumping Green Tree Golf Course and “avoid any further attempts to self-generate power.”
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