California mayor indicted on bribery and extortion charges

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The former mayor of Upland, California, a community of 76,000 just east of downtown Los Angeles, was indicted on Wednesday by a Riverside County grand jury on bribery and extortion charges, alleging he demanded money from locals businesses seeking city approvals and permits.

John Pomierski, 56, who resigned from office last week, was accused of demanding $70,000 from a nightclub owner and $20,000 from a medical marijuana cooperative in 2007, in exchange for his help in getting permits and other services for the businesses.


Pomierski was charged in an 11-count indictment, which alleges he “would demand money from the owners of businesses located in the city of Upland in exchange for the performance of official acts in connection with Upland city government business and transactions.”

Also charged in the indictment was a business associate of the former mayor, Edward Hennes, who allegedly acted as an intermediary between Pomierski and businesses looking for favorable municipal treatment. Hennes, 54, is a member of the city’s building appeals board and owner of a local construction firm.

Two other men- Jason Crebs and Anthony Sanchez- acted as middlemen in the extortion operation, communicating demands to businesses and collecting payments. Crebs and Sanchez have reportedly reached plea agreements with prosecutors.

The court documents claim Hennes and others entered into consulting agreements and contracts with businesses to “disguise and conceal” the true nature of the illegal payments. Pomierski’s company, JP Construction Co., received at least $90,000 from Hennes’ company since 2000, the year Pomierski was elected mayor.

Aaron  Sandusky, the owner of the marijuana cooperative, cooperated with the FBI in its investigation of Pomierski and Hennes.

Sandusky said that one of Pomierski’s representatives demanded $20,000 to stop an effort by the city to shut down the cooperative. He said he paid $10,000 to Hennes.

“It’s hard enough to run a business, let along this kind of business,” Sandusky said. “When this happens, where do I go? The police? The FBI? I’m in the medical marijuana business. I’m an easy target.”

If convicted, Pomierski faces a maximum of 145 years behind bars and Hennes faces 50 years.

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Louisville councilwoman establishes summer grant program, hires 12 relatives

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Councilwoman Judy Green is set to appear in front of the Louisville Metro Ethics Commission on charges she used her government position to enrich her family through a youth summer jobs program.

Green secured $35,000 for the “Green Clean Team” summer jobs program, intended to hire underprivileged youth to clean up alleys, lots and parks. Green ran the program, including making decisions on whom to hire.


Of the total monies, Green used $3,850 to hire 12 of her relatives, and another $28,270 of the funds are unaccounted for.

A police investigation said “the process by which this grant was established, completed and documented lacks professionalism, appears very unethical, and raises questions to the criminal allegations but there is not enough to support any further criminal investigation or prosecution.”

The ethics complaint was filed against Green, a dentist, by former police officer Ray Barker Jr., who ran against her in last May’s Democratic primary election.

Green’s lawyer, Kent Wicker said in a prepared statement “the ethics ordinance requires the process to be confidential. Unfortunately the complainant, who lost the last two elections to Dr. Green, wants to continue that political fight in the media and in this forum. But Dr. Green will follow the law and have no comment on the ethics complaint until the process is over.”

Critics disagree the matter is a private one.

Although the chairman of the ethics committee, Jonathan Ricketts, confirmed the meetings would be held confidentially in executive session, a lawyer representing the Courier-Journal said the city’s ordinance is in violation of state law.

“The open meetings law exempts deliberations … not the hearing of evidence,” Fleischaker said. “So I do not think they are entitled to take evidence at a quasi-judicial proceeding in closed session. They are entitled to deliberate privately, but the hearing itself should be open to the public.”

Information from: Courier-Journal

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Oakland officials bracing for pension plan funding disaster

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In 1997, then-city officials in Oakland, California had a great idea that would take them off the hook for 15 years of pension contributions for some of its public-employee pension plans. City leaders issued a 15-year bond at a low interest rate, and invested the proceeds to potentially earn a higher rate, using the earnings to pay annual fund contributions.

Now sources say, the investments were poorly managed, and only earned an average of 4 percent annually, instead of the 8 percent that officials expected. Instead of helping its finances, the city owes $46 million that comes due on July 1.

An actuarial study commissioned by City Auditor Courtney Ruby determined that the city lost more than $250 million by issuing the bonds rather than paying the contributions as they became due.

To make matters worse, in addition to the pension bond disaster, the city is also facing a $40 million deficit on its $400 million general fund budget.

While some officials, including Councilman and finance chair Ignacio De La Fuente and City Attorney John Russo, want to rein in spending to make ends meet, others in City Hall prefer to simply issue another bond, and push the problem off for another five years.

According to the San Francisco Chronicle:

Issuing a new pension bond with another five-year holiday could have severe consequences for the future, according to Ruby.

Even if the city gets a 7 percent return on pension fund investments during a five-year holiday, the city would have to pay out $42 million to $28 million a year from the General Fund between 2017 and 2023, according to Ruby’s report. In the last years of paying back the pension bond’s obligations from 2024 to 2026 – half a century after the last eligible employee would have been hired – the city would have to pay more than $150 million per year from the General Fund.

The bonds are tied to a specific city pension plan for police and firefighters with unusually generous provisions – even by today’s standards. It provides that a retiree’s benefits are not tied to their salary when they retired, but to a salary as if they were retiring today.

For example, a police captain who retired in 1975 would receive 68 percent of the pay of a currently employed police captain in 2011- holiday pay and shift adjustments included. Currently, 1125 retirees and beneficiaries are participants in the plan.

Mayor Jean Quan is said to be favoring a plan that would have the city pay only $5 million per year into the plan for the next five years, and then increase payments when its finances are in better shape. However, Russo thinks the figure should be $20 million per year.

“People say, we should be paying this when times are better, but the problem is that when times are better, nobody pays this down,” he said. “If they roll this over again, there is no scenario I can see where they’ll be able to pay this back in 2024.”

San Francisco Chronicle

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Georgia mayor suspended over missing $575,000 in city funds

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A special commission appointed by Georgia Gov. Nathan Deal has suspended longtime Broxton Mayor Bobby Reynolds.

Reynolds was indicted in December, along with his daughter, the former city clerk, over the disappearance of $575,000 in city funds. In December, a Coffee County grand jury charged Reynolds, 69, with two felony counts of violating his oath of office, two misdemeanor counts of malfeasance of office and a single count of failing to take and file the proper oath of office.

His daughter, Tracy Lott, 48, was charged with two counts of theft by taking and one count of making false statements. Last year, the City Commission fired her after an audit dating back to 2000 determined the money was missing.

Both Reynolds and Lott pleaded not guilty.

Officials said that Reynolds failed to have audits conducted on city finances since 1999, a condition of receiving monies from the state.

Reynolds was accused of failing to oversee the city finances and failing to supervise his daughter. During the period Jan. 1, 2008 though mid-July 2009, she overpaid herself at least $15,000 in salary. She also lied to Georgia Bureau of Investigation agents about the overpayments.

If convicted, Reynolds faces up to 13 years behind bars, and Lott faces 35 years.

The Florida Times-Union

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Chicago government agencies ignore do-not-hire list of banned employees

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What seems like a no-brainer in transparent governance is being ignored or resisted in some Chicago-area government agencies.

Employees who are fired by the city for wrongdoing are put on a list called the do-not-hire list, signally other city departments that an employee was terminated for cause, and they should not be rehired in another city department.

Despite the presence of the list, some of the employees on it are showing up in other city departments. To make matters even worse, many other city agencies including the City Council, the Chicago Public Schools and the Park District, have not agreed to use the list, and hire offending employees anyways.

A court-appointed city monitor and the city’s inspector general have long pushed for the hiring restrictions on the “blacklisted” employees, although they say that the city doesn’t do enough to effectively enforce the rules.

“The city still hasn’t used it to ensure these same people haven’t been hired at sister agencies, each of which are either controlled by, or whose leadership is appointed by, the mayor,” said Jon Davey, a spokesman for Inspector General Joseph Ferguson.

Mayor Richard daily’s administration says that it’s been trying to get other city agencies to go along with the list, but Jenny Hoyle, a spokesperson for the city’s Law Department, said nothing yet has been formalized.

Some critics fear that once a new mayor is elected later this year, the new administration may drop the list altogether.

When first asked in 2009 by the Chicago Tribune for a copy of the list as a public records request, the city’s Human Resources Department refused to provide it claiming that it was as “unwarranted invasion of personal privacy.”

The list, called “Ineligible for Rehire – Indefinite,” contains the names of workers that have been terminated for committing crimes or violating city policy.

The list includes the names of employees that have criminal convictions, have broken state or federal statutes, violated the city’s hiring plan, committed workplace violence, harassment or discrimination, or have been found guilty of wrongdoing by the inspector general’s office.

The current list contains the names of 218 employees that were fired, or resigned after being told they would be fired, and covers only the period from 2007 through 2009.

At least three employees on the current list have turned up in other city departments, according to the Tribune. One of those, an employee in the inspector general’s office that was fired for shoplifting but later acquitted, was rehired in a similar position in the Chicago Public Schools.

Information from: Chicago Tribune

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Kilpatrick’s aide to cooperate with prosecutors in corruption case

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Marc Andre Cunningham, the top aide to ex-Mayor Kwame Kilpatrick has apparently agreed to cooperate with government prosecutors in their city hall corruption case against the disgraced mayor, according to The Detroit News.

An order signed by U.S. District Judge Gerald E. Rosen pushed back the hearing date for Cunningham’s sentencing to April 14, signaling that the one-time top city hall official was ready to turn against his friend and former frat-house brother. The date is one day after a status conference hearing on the criminal case against Kilpatrick.

Cunningham pleaded guilty to charges that he took $300,000 in commissions from an investment firm that he helped secure $30 million of city pension funds to manage. Cunningham admitted that he paid a portion of the commission to Kilpatrick’s father Bernard, as a bribe to make the deal happen.

After the transaction, Cunningham was made Kilpatrick’s executive assistant. Later he was appointed head of the Detroit Film Office.

Cunningham pleaded guilty to one count of conspiring to commit bribery, and faces up to 37 months in prison.

The Detroit News

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Plea deals rejected by city council members in Bell corruption scandal

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The former City of Bell officials accused of looting the small blue-collar community of millions of dollars appeared in court on Monday, as Los Angeles County Deputy District Attorney Edward Miller outlined the case against them.

All eight dependents charged with public corruption appeared in court, although the principal targets of the district attorney, city administrator Robert Rizzo and his assistant Angela Spaccia, were excused early. They are scheduled to return for a separate hearing next week.

Remaining in the courtroom of Judge Henry J. Hall were council members Oscar Hernandez, Teresa Jacobo and George Mirabal, and former council members Luis Artiga, George Cole and Victor Bello. The preliminary hearings, which are expected to last all week, will determine if prosecutors have enough evidence to bind them over for trail.

Prosecutors allege that the part-time council members were each paid over $100,000 per year , largely for serving on multiple bogus city commissions that rarely met. Some of the phony commissions were called the Solid Waste and Recycling Authority, The Community Housing Authority, The Surplus Property Authority and the Public Finance Authority.

Miller said “They paid themselves for doing almost no work” and “robbed the citizens of over $1.3 million.”

In most California cities, council members are usually paid a few hundred dollars per month, or nothing at all.

The newest council member, Lorenzo Velez, the only official not charged in the scandal, was receiving $620 per month and had not yet been made a paid member of the phony commissions. When the salary scandal was first reported in the Los Angeles Times last summer, he said he wasn’t even aware of the existence of any of the commissions.

The district attorney’s office confirmed that it offered a plea deal to the six council members on Monday, in which they would be sentenced to two years in prison and make full restitution of the monies they received. All six defendants reportedly rejected the offer.

Prosecutors said  that city council members stood by and did little besides cash paychecks as Rizzo ran the city as a fiefdom, systematically looting it by overcharging property taxes, arbitrarily assessing licenses and fees on businesses, and making millions of dollars in unauthorized loans.

Rizzo’s total compensation in 2009 was more than $1.5 million.

Rizzo and Spaccia were not offered deals by the prosecution, and will be back in court for the next round of hearings on Feb. 14 when evidence against them will be presented.

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