SEC subpoenas city amid investigation into its finances
Download SEC Subpoenas (PDF’s)
The U.S. Securities and Exchange Commission served subpoenas for documents on the city of Beaumont, the Beaumont Financing Authority and the Beaumont Community Facilities District on April 22, the city disclosed on Wednesday, May 5.
“The subpoenas follow the city’s ongoing investigation relating to the use of bond proceeds, the expenditures of special tax revenues, and continuing disclosure compliance,” the city said in a brief news release. “While the City cannot predict when the SEC will conclude its investigation or the outcome, Beaumont will continue to fully cooperate with all agencies.”
The SEC’s April 22 subpoenas come one year to the day after anti-corruption investigators with the Riverside County District Attorney’s Office and FBI agents served search warrants for City Hall, the Palm Desert home of then-City Manager Alan Kapanicas, and the Beaumont offices of Urban Logic, the consulting firm that for years provided the city with its public works, planning and economic development directors.
Over the past year, the city’s finances and management have come under scrutiny. The state Controller’s Office began a probe in May that resulted in a scathing report issued about Beaumont’s financial practices. A city-commissioned audit found serious financial mismanagement.
The city cut ties with Kapanicas in October, and the city attorney and finance director also have left the city’s employment.
In early March, the City Council served legislative subpoenas on Union Bank of California to compel the bank to produce records detailing how millions of dollars in bond funds were spent by former city officials. Then in April, the council to ask the California Attorney General to investigate Union Bank’s role as trustee in the sale of $200 million in city bonds after learning some financial records may have been destroyed.
A DA’s spokesman said in April that no criminal charges have been filed in relation to the office’s probe, but that the investigation is continuing.
This story is developing. Check back for updates.