Palm Springs corruption scandal; What happens next?
News Channel 3’s John White went in-depth with the Mayor and City Manager of Palm Springs, one day after the District Attorney announced bribery and perjury charges against former mayor Steve Pougnet.
Find out what happens next for Palm Springs and the downtown project in a Newschannel 3 I-Team investigation…
“Nothing in those allegations had anything to do with our city manager, our city attorney, or council members who were on council when this happened,” said Palm Springs Mayor Robert Moon one day after charges were announced against former Palm Springs Mayor Steve Pougnet and developers John Wessman and Richard Meaney
Pougnet is accused of accepting bribe money from two developers, one of them was John Wessman, a partner with the city on the downtown revitalization project, the biggest development project in the city’s history.
A scheme the D.A. said involved at least $375,000.
Mayor Moon and City Manager David Ready sat down with John White one day after the announcement and more than a year after the raid at City Hall. Both men talked about re-establishing trust when asked if this happened and how?
“That’s an important question, how does this happen at City Hall, I’ve racked my brain day after day since this occurred, I take this very seriously,” said City Manager David Ready.
Should staff have figured it out? The former mayor did report that he earned more than $200,000 from developer Richard Meaney. Did that sound an alarm??
“Whatever occurs outside of City Hall, unbeknown to city council or staff based on these charges, those are things that are not going to be found in the city’s checks and balance system,” said Ready.
Mayor Moon agrees, viewing what happened Thursday as a clean bill of health for city hall.
“We totally support Doctor Ready and we have complete faith in him,” said Mayor Moon.
The downtown revitalization project may be a little more complicated. The developer, John Wessman, is charged with bribery and has retired from the company bearing his name. His son-in-law, Michael Bruan is now running the company.
Mayor Moon says it’ll help to have Wessman out of the picture.
“I shouldn’t say this because working with Michael Braun is easier than working with John Wessman, John Wessman can be difficult to work with,” said Mayor Moon.
The city has a lot of money on the line, the project financing agreement reveals. The city has $43,000,000 committed, paid for by Measure J funds, a one percent sales tax. Money that Ready says won’t end-up in the hands of Wessman.
“Those dollars stay with the project,” said Ready.
Right now construction continues. The mayor and city manager say the best case scenario is Wessman Development, with Bruan at the helm, moving forward
If he runs into trouble and the project stalls, the project financing agreement has safeguards for the city, like forcing a sale to a new developer.
That would be worse the case scenario, with a potential eyesore downtown and long delays.
“Anywhere from one to 10 years if we’re not able to keep this together, with Wessman,” said Ready.
Ready and Moon say the other developer charged in the case, Richard Meaney, doesn’t have any new business with the city. Other than never repaying a $250,000 incentive grant for the Hacienda Cantina and Beach Club which is now closed.
Both Ready and Moon say they haven’t had any contact with the former mayor since he left office at the end of 2015.
For Ready, it was the end of a long relationship working closely together.
When asked if he feels duped that Pougnet was collecting all this money while he was working diligently on this project, Ready responded, “I think the important thing is the council, staff, we have no way of knowing what someone was doing outside of city hall, what we do need to know, whether it’s $375,000 or $10 if something is misappropriated, make sure it doesn’t fall through the cracks.”
We’re told the former mayor will appear in a riverside county courtroom next week. He is only charged with these crimes, and his attorney says Pougnet welcomes the opportunity to demonstrate that he did nothing wrong.
Pougnet faces up to 19 years in prison if he’s convicted. Each of the developers charged in the case faces up to 12 years if convicted.
Richard Meaney surrendered today and posted bail. Wessman did the same yesterday.
As for the hotels, and some of the tenants involved in the downtown project.
Virgin Hotels responded today with this statement, “We understand from the developer that they intend to proceed with the development projects, including the Virgin Hotel.”
We have not heard back from Kimpton Hotels or West Elm.
You can find an interactive timeline of the events on the scandal by clicking on the Scandal at City Hall banner on our home page.
