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State controller owes $169K to Industry for withholding records of developer’s involvement in audit

State Controller Betty Yee’s office has been ordered to pay $169,000 in fees to the City of Industry’s attorneys to resolve a public records act lawsuit alleging the state agency audited the city as a political favor for a developer with an ax to grind.

A Los Angeles Superior Court judge determined that while the Controller’s Office eventually complied with the city’s records requests, it only did so as a result of the lawsuit and, as such, should have to pay the fees, according to a court ruling.

Records released during the legal battle showed the controller’s general counsel and other employees coordinated with developer and Democratic donor Bill Barkett and his longtime personal attorney, David Gilmore, in the days before a second audit of Industry was announced. Only one other city, Bell, has been audited twice by the State Controller’s Office.

The same month the audit began, Gilmore filed a lawsuit on behalf of the “Concerned Citizens of the City of Industry” accusing Industry’s City Council of corruption and asking a judge to strip the governing body of its power. Jerry Brownfield, chief of the state controller’s Division of Audits, filed a declaration in support of the lawsuit, though officials later said the declaration only supported two paragraphs related to a previous audit. That lawsuit is still ongoing.

Coordination ‘unprecedented’

In a news release, city officials declared victory and called the coordination between Barkett and Yee’s office “unprecedented.”

“While the controller touts values of openness and transparency in government, the Court’s decision makes it clear that she has not implemented those values in her own office, and employs a double standard used to help political insiders,” Mayor Cory Moss said in a statement released by the city.

In a statement, Yee denied the allegations.

“First, the ruling is on the PRA and not the merits of the case,” she said in the statement. “Secondly, none of the documents produced in any way suggest that the audit was politically motivated.”

Phil Hosp, an attorney representing the city, said Yee went to lunch with Barkett in April 2018 and then subsequently gave him “unlimited access to the controller’s office and its legal department.” Yee previously told the L.A. Times she cut the meeting short after realizing there was a potential conflict.

Yee did not answer a question through a spokesperson about the nature of her meeting with Barkett.

Official offers developer assistance

The same day as the meeting, Rick Chivaro, the controller’s chief counsel, offered his assistance to Barkett in an email. Gilmore later provided a list of topics auditors could focus on and the State Controller’s Office did review some of them, but not others. It’s unclear if that letter had any effect on the probe, as the recommended areas also were previously publicized in news reports.

Barkett was a lead figure behind a proposal to build a massive solar farm on Tres Hermanos Ranch, roughly 2,500 acres of pristine rolling hills on the edges of Los Angeles, Orange and San Bernardino counties. Industry backed out of the deal in 2018 and filed suit against Barkett’s companies, alleging they had taken $20 million and yet could not produce evidence of their work. The city eventually sold the land to a joint conservation authority controlled by itself, Diamond Bar and Chino Hills.

Despite the very public battles over the property, the state controller’s second audit did not look at the Tres Hermanos deal at all. City officials even asked Yee’s office to review it, according to Hosp.

“She should have been on the city’s side,” Hosp said. “The city is interested in trying to figure out where this money went, but rather than the controller’s office helping the city do that, she’s helping the crooked developer try to get more money out of the city.”

Source: Orange County Register

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