Union Bank is Bond Trustee to $350 Million Mello Roos Bonds in Beaumont and $2.2 Billion throughout California.
City of Beaumont to Issue Subpoenas to Compel Union Bank to Release Municipal Bond Fund Accounts
Union Bank is Bond Trustee to $350 Million Mello Roos Bonds in Beaumont and $2.2 Billion throughout California. All Acquired Without Voter Approval.
As Bond Trustee; Union Bank is responsible for establishing the bond fund accounts as directed on the bonds and distributing the funds as directed by the Requisitions. The City of Beaumont, as the District and the Authority, were also responsible for maintaining Bond Records; but the City’s Records are incomplete and/or destroyed.
Beaumont Bond Fund Accounts have been in question for years. Former Councilwoman Nancy Gall attempted to question the Accounts, but was shut down. A Public Records Request compelled the City to release some of the Bond Fund Accounts which revealed $4 Million transferred to Urban Logic from the 2001 Wastewater Bond Fund Accounts without Council’s Approval or knowledge. It was also discovered that Union Bank Employees had embezzled $385,000 from Beaumont’s Bond Fund Accounts. The City refused to release the Bond Fund Accounts that ended in ’06’ and ’07’.
In September, 2013 I sued Union Bank’s Corporate Office in San Francisco to release Beaumont’s Bond Fund Accounts ending in ’06’ and ’07’ to ensure that the Corporate Office was accountable. The City released the Accounts before the case went to Court.
The ’06’ and ’07’ Bond Fund Accounts revealed that Beaumont’s Bonds were CMO’s; Collateralized Mortgage Obligation Bonds. It appears that Beaumont’s Bonds were never sold on the market. The Bonds’ Owners must be registered, but the City claims to have no knowledge of who owns Beaumont’s Bonds.
It has also been found that Union Bank has embezzled $20 Million from Beaumont’s Bond Fund Accounts by continuing bonds that Union Bank, as Bond Trustee, was allocated money to pay off and retire.
In the Fall of 2015 Judy Bingham submitted a Public Records Request for all bond fund accounts, documentation, and communication for all of the City’s Bonds from Union Bank. The City claims to have not have the documents and failed to procure the documents from Union Bank.
The City of Beaumont is now issuing a Legislative Subpoena for Union Bank to produce all of the Bond Fund Accounts including communication by March 10, 2016 or appear before Council on March 15th.
The Requisitions produced by the City of Beaumont to date reveal that $60 Million of the Mello Roos Bond Funds were used to pay Developer Mitigation Fees, which is an illegal use of Mello Roos Funds. Urban Logic was paid $35 Million from the Bond Fund Accounts.
$300 Million has been funneled out of Beaumont’s Bond Fund Accounts over the last 20 years and not one member of Council knew or understood that they were responsible for the funds.
The City of Beaumont’s favorite copout is: “the bonds aren’t the debt of the City”. No, the Bonds aren’t the debt of the City, but they are the debt of the Authority and the District, all of which are the City Council.
On February 25th the City of Beaumont transferred $6 Million to Union Bank to pay the Interest on the Mello Roos Bonds knowing that Union Bank refused to release the bonds’ documents and knowing that Union Bank had misused their position as Bond Trustee and embezzled $20 Million.
Perhaps if Beaumont withheld the Bond Payments Union Bank might be a little more compelled to do their jobs.