IN-DEPTH: FBI probes Palm Springs city government, mayor
Information from computer servers and piles of documents were confiscated from Palm Springs City Hall by the FBI and Inland Empire Public Corruption Task Force on Tuesday.
“We do searches based on allegations of criminal activity and so we’re seeking evidence pursuant to the warrant however the warrant is under seal,” said Laura Eimiller, spokeswoman for the LA bureau of the FBI.
Authorities wouldn’t say what kind of information they’re after, but city employees told us their city-issued cell phones were taken before they were asked to go home.
“Federal agents have secured the building and secured city records and they’re doing an investigation that’s all we know at this point,” said Jay Thompson, city clerk for the city of Palm Springs.
Meanwhile other federal agents went knocking on the door of outgoing mayor Steve Pougnet’s Palm Springs home.
The FBI says his apartment was never searched, but authorities did meet with Pougnet to seize items listed on the search warrant.
“There’s definitely a paper trail there for people who want to follow it, this is something that had to happen,” said Palm Springs resident Manny Montoya.
Questions were first raised about Pougnet back in april when he dodged questions about a consulting job he put on his disclosure Form 700.
Pougnet reported earning more than $100,000 a year since 2013 working for Union Abbey, a company created by developer Richard Meaney in 2003. Union Abbey was suspended by the Secretary of State in 2009 for owing nearly $50,000 in taxes.
The mayor said he had been advising Meaney on the Downtown Plan, the massive project under construction by developer John Wessman. The Downtown Plan is being funded by millions of taxpayer dollars from Measure J.
In a news conference outside city hall, councilwoman and mayoral candidate Ginny Foat said she didn’t know if the investigation had anything to do with the mayor and that she and her fellow council members will cooperate with authorities.
“We certainly welcome any investigation as a matter of fact in a way to dispell any misgivings about city dealings, I and the rest of the city council voted for an in-depth audit of the city in May on which that audit was made public,” Foat said.
The audit Foat referred to was an independent probe by Palm Springs-based CPA firm Brabo & Carlsen. The three-page report said there were no major problems with how the city gave out that money. But, a News Channel 3 investigation into the grant program showed possible unequal treatment of businesses.
Under the incentive program, the city awarded $250,000 to Meaney in June 2014 for Hacienda Cantina, a restaurant and bar in south Palm Springs. The building owner and developer listed on city building permits for Hacienda Cantina is John Wessman.
In May, lawsuits were filed by seven contractors who alleged they worked on Hacienda and were never paid for it. Heidi and Richard Meaney released a statement saying they were working on paying those contractors.
The city had also requested an audit of land-sale procedures relating to the city’s former redevelopment agency, which dissolved in 2012. Last December the city, including Pougnet, voted to sell a parcel of city-owned land called Casa del Camino to Meaney and Chinese investor Yokang Zhou. The mayor at the time was employed by Meaney’s company, Union Abbey, raising questions about a Section 1090 violation.
That land sale was later rescinded by the city council when the mayor’s consulting job was made public.
Results of the land-sale audit, conducted by Los Angeles law firm Kane, Ballmer and Berkman, have still not been released.
Tonight, the mayor released a statement regarding the FBI probe:
“I am Happy to cooperate with the inquiry going on at City Hall, just as I have always been fully cooperative and open in all of my many years as an elected official in Palm Springs.
I have complete confidence that our City Council, City Manager, City Attorney and City staff will do everything they can to cooperate by ensuring that this process will be as swift and as thorough as possible.
Palm Springs has made tremendous progress over the past eight years. We simply can’t permit this matter to sidetrack our efforts to make the future even brighter.
Steve Pougnet.
Sent via City Manager David Ready”
KESQ has been following this story for the last four months. Here are those reports in order:
Pougnet dodges questions about conflict of interest Lawsuits against Hacienda developer raise questions about city grant Meaney ‘open letter’ reveals close relationship with Mayor Pougnet Palm Springs incentive grants show inconsistencies Questions raised about Palm Springs contracts and conflict of interest law (1090) Pougnet defends mayorship at council meeting, pushes back on allegations FPPC to investigate PS Mayor Investigations put PS business deals under microscope Distict Attorney Mike Hestrin weighs in on conflict of interest law (1090) PS City Attorney defends council actions, discusses Union Abbey Assemblyman pushes to reform Form 700 disclosures by elected officials
Stay with KESQ and CBS Local 2 for the latest developments.
