Nine Beaumont police officers took advantage of the same interest-free loan offer that resulted in their police chief being charged with misappropriation of public funds, but those officers will not be prosecuted, Riverside County District Attorney Mike Hestrin said.
Between 2010 and 2013, Beaumont’s then-city finance director and city manager signed off on loans totaling $113,773 without the authorization of the City Council as required by law, according to a declaration written to obtain the arrest warrant for former Police Chief Francis Dennis “Frank” Coe Jr. The loans were secured by the officers’ sick pay.
The unauthorized loans constituted a gift of public funds, according to Michael Gavin, a senior investigator in the DA’s office who wrote the declaration. Coe has not yet entered pleas to two counts of misappropriation and one count of conspiracy.
Extra monetary assistance for police officers is not unheard of, said Jim Bueermann, the former Redlands police chief who heads the Police Foundation, a Washington D.C.-based organization that promotes better policing.
Retention bonuses, cash incentives for transferring from another department, tuition assistance and home-purchasing down payment loans are available from some agencies. Those loans can even be forgiven if the officer remains with the department long enough.
“But those things are all approved by city councils and are done in a transparent way,” Bueermann added.
Hestrin would not reveal why he believes Coe’s actions amounted to a crime, whereas the other officers’ did not. “That will come out in court,” Hestrin said.
The loans were available to any city employee with enough sick time banked, Gavin wrote, but only officers took out the loans. All loans have been repaid, he added.
In May 2010, according to the declaration, Coe approached William Aylward, the finance director, and told him that he needed a loan but did not want to cash out his sick/vacation time – as city employees were allowed to do – because he did not want to pay taxes on the money received. Aylward allowed Coe to have a $20,000 loan backed by sick time as collateral. Aylward took the plan to then-City Manager Alan Kapanicas, and Kapanicas agreed.
The money was paid back with monthly payroll deductions. When the money was given, the sick time was taken away. As the money was paid back, the sick time was put back on the employee’s records, Gavin wrote.
The city does not have records of anyone receiving one of these loans before Coe, Gavin wrote. Mayor Mike Lara said in an interview Friday that the city did not have an employee loan program before the arrests and does not have one now.
Coe’s 2010 loan documents are signed by himself and Aylward. Coe took a second loan, of $25,000, in November 2012. Those loan documents were signed by Coe, Kapanicas, and Aylward, according to Gavin.
The nine other loans, all less than $25,000, were given between January 2011 and August 2013, Gavin wrote.
Kapanicas and Aylward were both charged with misappropriation of public funds. They have not entered pleas.
Kari Mendoza, the city’s administrative services director, said Friday that none of the officers has been disciplined by the city over the loans. Some of the officers have since left the city, she said, for reasons unrelated to the investigation.
The officers have not been publicly identified. Mendoza said she was waiting on direction from the DA’s office before responding to a public records request from a reporter seeking the names of the officers and the amounts and other terms of the loans.
Shaun Thuilliez, the current police chief, did not respond to multiple phone messages from a reporter seeking comment.
At the City Council meeting on Tuesday, hours after the seven former city leaders were arrested, Lara said publicly that the council “remains committed to transparency and accountability.”
Lara theorized Friday that Thuilliez might not have responded to the messages because of uncertainty over what can be discussed publicly due to the ongoing DA’s investigation.
“The City Council has been working very closely with the interim city manager to make sure that information we are legally allowed to post could be posted to the city website,” Lara said. “The citizens will know what we know, or what they are legally allowed to know.”
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