The city of Beaumont is serving Union Bank of California with legislative subpoenas this week to compel the bank to produce records detailing how millions of dollars in bond funds were spent by former city officials.
The Los Angeles bank acted as the trustee when the city issued more than $270 million worth of bonds to build waterworks, sewers, streets, and parks.
Union Bank has not produced the bond spending records the city has been seeking for months, said John Pinkney, Beaumont’s city attorney.
Bank spokesman Dan Weidman said company officials are working to respond to the city’s requests.
“In fact, we have previously supplied the city with many documents related to the bond funds in question,” said Weidman. “We are committed to assisting them in this process again.”
The city’s move comes less than a year after district attorney’s investigators, with the help of the FBI, seized thousands of pages of documents at Beaumont City Hall, the city manager’s home, and the offices of Urban Logic Consultants, a firm that for more than 20 years provided the city’s economic development and public works directors as contract employees.
The city manager, Alan Kapanicas, and William Aylward, the city’s longtime finance director, left City Hall shortly after last year’s raids. No charges have been filed in the case.
The state controller’s office in November found that accounting controls in the city were “effectively non-existent,” making it impossible to know whether hundreds of millions of dollars were spent for their intended purposes.
Pinkney said city has been seeking bond-fund spending records from Union Bank since last summer, so the city can complete its own investigation into how the money was spent.
“We need to complete an analysis of how these funds were spent – not just for internal accounting, but to be accountable to the community.&rdquo
As bond trustee, the bank is responsible for maintaining records and making them available to the city,Pinkney said.
“It is unacceptable that we haven’t received many of these records,” he said.
The subpoenas require Union Bank to provide the records to the city manager by March 10 or the City Council during its March 15 meeting.
If the bank does not produce the records, the city’s next step will to be take the matter to court, Pinkney said.
The City Council on Tuesday, March 1, gave Pinkney approval to issue the subpoenas.
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