SF-04059 Beaumont Failure to Disclose SEC Compliance Report

The actual Report produced by the out of State Law Firm must be released to the Public and uploaded onto EMMA.

The S.E.C. Issued a Cease and Desist Order requiring the City of Beaumont to properly account for the bond funds, re-file government documents that were forged, and hire an Independent Consultant to verify that the City had complied with the SEC Order.

The Report was due to the S.E.C. by February 20, 2018, and required to be filed on EMMA on all of the City’s outstanding Bonds within 10 business days. The Report has not been filed with EMMA and what was turned in to the S.E.C. is unknown to the Public.

11/07/2017: Beaumont City Council Authorized Executive Director to Enter into a Contract with Bradley Arant Boult Cummings L.L.P (Badley) to Serve as Independent Consultant as Required Pursuant to SEC Settlement: https://beaumont.civicweb.net/document/9783/Item%203.pdf?handle=0D4CAE7E3AEB42E3AFFE78B2835E751B

This was never a job for a lawyer and the lawyers hired were not licensed to practice law in the State of California. When confronted at the March 6, 2018, City Council Meeting about hiring out of State lawyers Brian Forebath from the Law Firm of Stradling Yocca stated: “You didn’t have to hire a lawyer.” And it’s true – it was never a job for a lawyer, but the City hired a lawyer and when a lawyer is hired they must be licensed to practice law in that State.

On February 20, 2018, Beaumont City Council ‘Approved’ three pages of random papers that Beaumont City Manager Todd Parton admitted was not the SEC Report. City Attorney John Pinkney told the Council that they ‘had to’ approve the random papers because it was the SEC deadline: https://beaumont.civicweb.net/…

On March 6, 2018, City Council Agenda Item 9, ‘Council Approved’ another ‘Report’ that had no letterhead or signature: https://beaumont.civicweb.net/document/12252/Item%209.pdf?handle=EB303E878DDD41D9A0DE13A0DFB3552E

The City usually uploads the video of the Council Meetings onto Youtube within a week and includes the Minutes on the next Council Meeting Agenda, but neither the video nor Minutes to the Meeting have been released. The Youtube Video has now been released.

Bond Counsel Brian Forebath did all the talking, City Attorney John Pinkney didn’t say a word. Forebath made a lot of excused, but admitted that the Report was sent to Pinkney.

It is highly suspected that Pinkney altered the Report produced by the out of State Law Firm. That “CONFIDENTIAL TREATMENT REQUESTED BY CITY OF BEAUMONT” is Pinkney’s signature. Everything Pinkney knows about the law he learned from watching John Belushi movies.

The actual Report produced by the out of State Law Firm must be released to the Public and uploaded onto EMMA.

Beaumont City Council Transcript March 6, 2018:

Forebath: The independent consultant was interviewed by the SEC, they talked to them on the phone extensively

Martinez: Looking at the Report I do have to admit it does look like a generic Report. Is this the way we received the Report?

Forebath: Yea, yea. There’s no requirement of format from the Report, it was just an independent consultant’s report and this is the format it came in. It’s been sent to the SEC.

Martinez: Is that typical for a report to be in this format?

Forebath: I’ll be honest; I don’t think we’ve seen very many of these independent consultant reports. This is sort of a new requirement from the SEC, especially from a municipal standpoint, the municipal field. I don’t know if there’s a clear process for it one way or another. But none the less it’s been sent.

White: Who submitted the Report to the SEC? Was it the independent consultant?

Forebath: The independent consultant submitted the report to Mr. Pinkney’s Office. They cc’d us and we submitted the Report on behalf of the Beaumont Financing Authority to the SEC pursuant to the request on the Report.

White: So it was not submitted by the City.

Forebath: The approval tonight will be for us to prepare the required certification and then the authorization from the mayor to sign it, the chair.