It was a sober reckoning.
Beaumont city officials on Tuesday night heard a long-awaited accounting of how more than $300 million in city bond funds were spent in the last 20 years – which includes money that prosecutors allege was embezzled by former city administrators.
The city-commissioned report by the Orange-based Urban Futures consulting firm has been more than six months in the making. It involved tracking down thousands of bond expenditures ostensibly made to pay for sewers, streets, sidewalks and other public works needed as the city’s population more than quadrupled to more 40,000 people.
“In total we looked at 68,500 pages of documents … and there is still some missing information,” said Michael Busch, Urban Futures’ CEO.
The report found that General Government Management Services, a company owned by former City Manager Alan Kapanicas, received $1.2 million in bond funds, including $451,222 for charges related to issuing the bonds and $512,042 for administrative costs.
It also found that $45.4 million went to Urban Logic Consultants, an engineering and planning firm whose owners – David Dillon, Ernest Egger and Deepak Moorjani – served, respectively, as the city’s economic development, planning and public works directors. They and Kapanicas are among those facing criminal corruption charges.
Most of this money was billed for engineering and project management services. But many of the invoices are vague and list only job titles and the number of hours worked.
“What we can’t tell is what they did,” Busch said.
It also showed that former Finance Director William Aylward received $165,300 in bond funds.
Aylward also faces criminal corruption charges.
The report came just four weeks after Kapanicas and six other former city officials were arrested for 94 felony corruption charges, which included several charges that allege embezzlement of these city bond funds.
Their arraignments are set for Aug. 19.
Beyond payments to their own companies, another $53.1 million went to city accounts.
The criminal charges followed a state audit last fall that found a “total lack of accounting” for city bond funds.
Public records show that Kapanicas and Moorjani, acting as city officials, repeatedly approved payments to their own companies from bond accounts held by Union Bank in Los Angeles, bypassing city coffers.
“The real lesson here is in knowing how are you going to protect yourself from staff,” resident Nancy Hall said to the City Council. “How are you going to make sure you’re not being scammed again?”
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