POLITICS (State, Local/San Diego): Fair Political Practices Commission, investigation, "hospitality" of bond underwriter Stone & Youngberg: "Bond firm's hospitality under review" ....

* U-T San Diego:  "Bond firm's hospitality under review" - "State to probe dinners for school officials" - From the U-T:

State ethics regulators have opened an investigation into hundreds of dinners purchased for school officials by Stone & Youngberg, an underwriter that has issued billions of dollars of bonds across California — many approved by recipients of those meals. The company has picked up the tab for dinners during conferences for school officials, and the state is checking to see how many meals and other gifts went unreported on mandated conflict-of-interest disclosures.

U-T Watchdog in 2012 reported on school officials in Poway, who retroactively disclosed accepting $2,200 in Stone & Youngberg meals over five years. The officials were responding to a corruption probe in South County, where officials were being prosecuted for similar failures to disclose meals from vendors and contractors.

In response to the Watchdog’s Poway story, the California Fair Political Practices Commission has launched a statewide probe of Stone & Youngberg’s hospitality, to determine whether other school districts made the same omission as Poway. “We opened an investigation based on the article you wrote, so we are looking at unreported gifts by Stone & Youngberg to officials,” said Gary Winuk, chief of the commission’s enforcement division. “The whole purpose of the law is so the public knows which public officials are receiving gifts, so they can decide for themselves how it affects doing their jobs on behalf of the public.”


The pattern of giving by Stone & Youngberg may be similar to that of De La Rosa & Co. investment bankers, which was the subject of another state investigation last year. Investigators found that nearly 200 public officials failed to report De La Rosa gifts, leading to some $24,000 in fines against 97 officials. Others received warning letters.

The De La Rosa case affected seven public officials in San Diego County...................


POLITICS (State, Local/Bay Area): Oakland, new report, pension costs, deficit: "Oakland auditor sounds pension alarm" ....

* Oakland Tribune:  "Oakland auditor sounds pension alarm" - From the OT:

OAKLAND -- Pension costs have more than doubled over the past decade, leaving Oakland with fewer police officers, more potholes and a growing threat of insolvency, City Auditor Courtney Ruby warned in a report released Sunday. Oakland's payments to the state pension system jumped from $37 million in 2003 to $89 million in 2012, the report found. That $52 million gap is enough to pay the salaries of 300 police officers, according to city budget figures.

Unlike most private sector workers, government employees in California receive guaranteed annual retirement income that can approach their final year's salary.

Oakland's pension problem is emblematic of a statewide crisis caused in large part by governments guaranteeing workers unaffordable pensions based on overly optimistic investment returns, Ruby wrote. As investments fell short of expectations, governments have had to pour more money into pensions plans at the expense of providing basic services. Because Oakland is a member of the state's pension system, it has few options to tackle its pension burden alone other than asking employees to pay more toward their retirements, the report found.

With Oakland's pension costs forecast to keep rising, Ruby recommended city leaders work with union officials and pension experts to devise a strategy for funding pensions without further eroding services or risking bankruptcy.

"Oakland has to get its head out of the sand and be very clear that we have significant unfunded liabilities and we have to have a plan to deal with this," Ruby said. "It's such a complicated problem that there is no prefabricated solution."

Ruby's audit report actually underestimates the city's plight, pension experts said.........................



SACRAMENTO: Sen. Leland Yee, various reports: Report, "Leland Yee case: Disgraced California state senator's legislative efforts fueled cash for campaigns"; commentary (Willie Brown), "Let's everybody calm down about the Leland Yee ruckus"; Matier & Ross, "A bloody message for Leland Yee in the 1990's" ....

***Leland Yee coverage, commentary....

* San Francisco Chronicle (Willie Brown):  "Let's everybody calm down about the Leland Yee ruckus"

* San Jose Mercury News:  "Leland Yee case: Disgraced California state senator's legislative efforts fueled cash for campaigns"

* San Francisco Chronicle (Matier & Ross):  "A bloody message for Leland Yee in the 1990's"


LOCAL GOVERNMENT: More info/details, Central Basin Water District, potential loss of insurance coverage: "Troubled Central Basin Water District may lose insurance" ...."

***Following up on earlier item noted here ("dysfunctional" Central Basin Water District, numerous insurance claims, carrier threat to cancel liability coverage)....

* Los Angeles Times:  "Troubled Central Basin Water District may lose insurance" - "The Assn. of California Water Agencies Joint Powers Insurance Authority has recommended to its board that it drop the district's employment liability coverage due to 'dysfunction' and increasing lawsuits." - From the LAT:

A controversy-riddled water district involved in a federal corruption investigation is in danger of losing its insurance, a political black eye that could have implications for the agency and its 2 million customers.

The Assn. of California Water Agencies Joint Powers Insurance Authority has recommended to its board that it drop the employment liability insurance for Central Basin Municipal Water District, citing the circus-like atmosphere at the agency. The authority insures hundreds of water districts across the state, and this would be only the second time in its 35-year history that it canceled coverage for a water district.

"It appears to an outsider that there is a sense of dysfunction on the district's board," the insurance authority wrote in a letter to Central Basin. "This dysfunction is resulting in an inordinate increase in litigation against the district." The insurer noted that Central Basin had an usually high number of legal claims against it, and said that, more important, the ongoing threat of more litigation posed too great a risk for other members of the insurance pool.

Central Basin, or its members, has been the subject of several investigations in recent years. . . . . . . .

Losing its insurance could hurt Central Basin's standing in financial markets and its ability to get loans, and would mean the district would have to find another insurance provider, possibly at a much higher rate.


Central Basin serves a largely working-class area of southeast Los Angeles County. The district has been criticized in the past for raising water rates. The agency's finance director, Richard Aragon, said he was confident the insurance situation would not lead to rate hikes.


The insurer has proposed several steps the district can take to preserve its coverage..............................


POLITICS/EDUCATION (South Bay/Los Angeles County): Continuing controversy, widening "scandal," Centinela Valley Union High School District: "Two more managers in Centinela Valley school district put on paid leave" ....  

***Following up on most recent earlier item noted here (continuing controversy, Centinela Valley Union High School District, Superintendent Jose Fernandez)....

* Daily Breeze:  "Two more managers in Centinela Valley school district put on paid leave" - From the DB:

The scandal in the Centinela Valley school district is widening, with two mid-level managers being placed on paid leave as several investigations continue into the excessive compensation of Superintendent Jose Fernandez.

In the two weeks since the school board put Fernandez on paid leave on April 9, district administrators have issued the same order for Patrick Au, director of information management services, and Ernany Montijo, director of fiscal services. Meanwhile, teachers union President Jack Foreman said there is no chance Fernandez will return to the district.  “Absolutely zero,” he said. “The corruption is too extensive. There’s nobody in that district who supports him.”

The District Attorney’s Office, the FBI, the county Office of Education and the district itself are investigating the activities of the Centinela Valley Union High School District, including the contract that allowed Fernandez to amass such a hefty compensation package in 2013.

It’s unclear why the two mid-level managers have been placed on leave. But sources in the district say they were close to Fernandez, whose total compensation in 2013 came to at least $663,000 — and possibly reached $772,000.


Foreman said he doesn’t know the specifics about the two middle managers on leave, but he believes people at that level were sometimes used to carry out questionable orders. “There apparently was an atmosphere of fear and (Fernandez) ran a reign of terror in that office,” Foreman said. “Lower-level managers and the clerical staff were living under a reign of terror.”

Regarding some of the more questionable aspects of Fernandez’s compensation — such as a $750,000 whole life insurance policy that apparently was purchased before the school board approved it — Foreman said: “There were people in that building that let these things happen. He obviously could not do this without having staff members who facilitated the fleecing of the district.”