IN-DEPTH REPORT: A changing political landscape in Palm Springs
“We will be doing things differently moving forward,” said Palm Springs Mayor-elect Robert Moon.
It’s a promise echoed by newly-elected council members, including J.R. Roberts.
“Our first order of business is regaining public trust,” Roberts said.
“I’ve said from the beginning, I will not take consulting jobs, no second jobs, nothing from the film festival, nothing,” Moon said.
Public trust began to erode as questions emerged about a high-paying consulting job held by outgoing mayor Steve Pougnet.
Since 2013, he reported (on his Form 700) making at least $100,000 a year working for one of the city’s most active developers, Richard Meaney.
But, when we tried to ask the mayor about that job back in May, he tried to shut the door in our face (see video).
Pougnet told The Desert Sun he got hired to quote “educate Meaney on the city’s economic development efforts, including the measure j sales tax and ongoing downtown redesign.”
Many wondered why a public official would advise a private businessman on a publicly-funded project.
Meanwhile, the consulting firm Meaney formed, Union Abbey, couldn’t legally employ anyone because it owed nearly $50,000 in unpaid taxes. The California Franchise Tax Board suspended it.
Both the mayor and Neaney refused to clarify their business relationship. We pushed for answers and Pougnet promised during a May city council meeting to push back.
“We’ve done too much in this city for candidates in office or KESQ or Desert Sun to think there’s all these horrible things to continue to push and push and push and I’m going to push back,” Pougnet announced.
“I strongly feel that is the role of the press to look at these things,” said Moon.
At KESQ we did look into them, pouring over city documents and making a series of public record requests.
Our months-long investigation uncovered unequal treatment of businesses under an economic incentive program: The city gave a $250,000 grant to Meaney for “Hacienda Cantina and Beach Club” without verifying Meaney paid the contractors who did the work.
Across the street, another business, The New York Company Restaurant, told us it waded through miles of red tape to get less than a $30,000 grant.
“The small businessman has a really hard time in this city, the big guys gets the money and they can go ahead and do it,” said owner Neil Castren earlier this summer.
The city couldn’t explain why there seemed to be a more lax set of rules for Meaney and Hacienda. In an e-mail to KESQ, City Attorney Doug Holland said “The grant agreement did not require this operator under this situation to secure releases (of payment from contractors).”
The city also couldn’t tell us anything about Union Abbey or how much officials knew about the mayor’s side job.
“Union Abbey is a separate legal entity,” Holland tolds KESQ reporter Natalie Brunell.
“And you believe it’s a legal entity?” Brunell asked, referring to Union Abbey’s suspended business status with the Secretary of State.
“Yes,” Holland replied.
Now, months later, we still can’t find evidence indicating Union Abbey was more than a shell company.
Nexus development, an Orange County-based firm where Meaney worked, also refused to discuss his partnership with the mayor. One of Nexus’ biggest projects in Palm Springs, Aberdeen, stalled in the wake of the scrutiny.
The public also began to question the finances behind the Downtown Plan, and the ties between Meaney and developer John Wessman.
“I want to do an audit of every taxpayer dollar that has gone to the Downtown Plan. I want all our residents to know how our taxpayer dollars are spent. This isn’t a Wessman project, it’s a private/public project,” Moon said.
All these questions got the attention of federal authorities and a public corruption task force made up of the FBI, IRS and district attorney investigators descended on city hall September 1st, removing hard drives and files.
They also went to Pougnet’s home with a warrant for his iPhone and iPad.
“This changes everything,” Moon said of the raid.
“I think this whole thing had an impact on the campaign and election,” said Roberts.
Voters told us leading up to the election they wanted change and more transparency. New leaders pledge to provide it.
“The press, the media is reasonable and if you answer questions and you’re straightforward and you take their calls, they will be fair,” said Moon.
“I’m very grateful for the in-depth reporting. It needed to happen,we were having problems,” said Roberts.
Pougnet never responded to our requests for interviews to hear his side of the story. He did recently agree to go on camera with one of our reporters, Alexandra Pierce, but only if she didn’t ask about the controversy.
He told her there’s not much he would have done differently as mayor: “We brought life back to Palm Springs and I’m most proud of that, so it’s all good.”
“I didn’t agree with him on that,” said Moon. “There are things he did that should have been done differently.”
The mayor-elect believes if the questions surrounding the mayor’s consulting job and city business deals didn’t come to light, Pougnet would have run again and likely won.
“I would have had a tough time running against Steve. He had 60 percent of the vote and if this hadn’t come out he would have been really tough to beat,” Moon said.
“I think we’re lucky that were were in an election season and that the public could decide with that information. What if we re-elected the mayor and he was guilty of crimes? Then what would we do?”
But for now, there have been no indictments. No charges of any crimes. And no information from authorities about the progress of the investigation.
New leaders will be sworn in next month and aim to turn public opinion from hesitation to hope.
“I hope by the time that info comes out, that our new city council and I have established a track record that is going well enough that people will be glad we’re there,” Moon said.
“At the end of the day we all want to serve our community and what I want to say to our community is, pay close attention to your government,” Roberts said.
