Beaumont’s employee handbook includes a section on guarding against conflicts of interest at the beginning of the 83-page document.
Last amended in June 2009, the personnel manual advises employees to avoid conflicts in which they might have a business or personal relationship. If they have a conflict or see one, they’re directed to report it to their supervisor or the city manager, who is in charge of enforcing the rules.
Yet prosecutors say it’s exactly those types of conflicts that were rampant in Beaumont – and at the top levels of city government, according to charges filed Tuesday, May 17, against seven former officials accused of misappropriating nearly $43 million.
Former City Manager Alan Kapanicas and other city department heads funneled city monies into their own private companies, the Riverside County District Attorney’s office alleges.
Urban Logic, a consulting firm that provided some of the city’s department heads, and Kapanicas’ own company – General Government Management Services – received contracts for engineering, financial and other services in an arrangement that spanned more than two decades, prosecutors allege.
State law clearly forbids public officials from having a financial interest in contracts entered into by their agencies, according to the Institute for Local Government, a Sacramento-based nonprofit that advocates for good government and works with agencies such as the League of California Cities.
The ban on “self-dealing” dates to 1851 and states that agencies may not enter into such contracts if an official has a conflict, a handbook from the group states. The state strengthened laws against conflicts with the Political Reform Act of 1974, which created additional requirements for disclosing public officials’ economic interests.
The language in Beaumont’s manual is similar to policies at other cities.
The handbook for Riverside city employees for example states: “You may not engage in any business transaction or have a financial or personal interest which is not compatible with the performance of your official duties or would tend to impair independence, judgment, or action necessary to pursue the City’s best interests.&rdquo
Riverside has a code of ethics, but it applies only to elected officials and those appointed to city boards and commissions.
Judy Bingham, a Beaumont resident and City Council critic who reported the city to authorities, noted with irony that former City Attorney Joseph Aklufi, who was among those arrested, was in charge of classes for city employees on conflict-of-interest rules.
“They could do whatever they wanted because they were in charge,” she said. “That’s what held it together all this time.”
Bingham said the conflicts were obvious from the start. The business interests of the former city officials were documented in statement of economic interest forms that public officials must file under state law, Bingham said.
“It was all out in the open,” she said. “They were well-known if you knew what form to ask for.”
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