Thursday, August 30, 2018

Baldwin Park cooks its books to give $1.7 million in raises, but will overspend $14.5 million next year.

by Banksy
Modified by me
Baldwin Park officials will give raises to all the city officials, including the mayor, council members, and city clerk and to its directors in the total amount of $1.7 M (million) for the fiscal year of 2018-2019. But how could it do this, when my independent audit reveals that the City is estimated to overspend $14.5 M in total next year, $9.8 M of which is in operational cost alone. Has Rose Tam, the City's finance director cooked the books again?

The budget appears to be misrepresented in mainly three ways: (1) inflating the city's income stream, (2) hiding ballooning legal costs, and (3) hiding and mis-categorizing the city's current debt and accruing interest. After the audit, the key finding is that the City will spend $1.7 in giving out raises, 71% of which will go to the city officials, directors, and the police brass. The City has decided to do this, even when it appears that the City will be running an operational deficit of $9.8 M and a capital deficit of $4.7 M**. In total, that's $14.5 M.

The following article explains what's happening in the budget and where the city officials are planning to do. All this is very concerning.

Here's a summary of a more accurate view of the City's finances. The analysis follows on how these figures have been reached.

Summary of City of Baldwin Park's Financial Project for 2018-2019 (In the Millions; doesn't include capital projects.)

Description Amount
General revenue $28.6
Operational Costs -$29.5*
Litigation Costs -$3.6
Interest Costs -$5.3**
Operational Total: -$9.8

The City grossly inflates it's revenue stream; hence, the deficit will be closer to -$14.5 M, not $6.1 M.

The City is grossly inflating the amount of money it brings in. The City inflates it's revenue stream in two categories: (1) the general fund and the (2) internal service fund.

The key finding are as follows: (1) The City is more likely to be bringing in $28.6 M in revenue, not $37.9; (2) the City's operating cost will be at a loss of $9.8 M, and (3) the total loss project for next year, when capital projects are included, is -$14.5 M.

Here's how the actual numbers were figured.

The first red flag in the General Fund is that the City says it's going to make an incredible $4.4 M more this year in a category called "Charges for Services." But in 2016-2017, what the City actually brought in was $2.0 M in this category. (Even then, there's also a problem with these actuals, as the numbers don't match up to the actuals of the previous budget; I suspect they're being fudged to not make these cost increases look so big.) So, how did the projections jump by $2.4 M?

Then the City says it's going to bring in $2 M in marijuana money, called "Community Development Enhancement" fund. This is owed by business that received a marijuana license.

But Tam cleverly shows in her budget that money is put aside. Why? Because it hasn't even been collected yet, and against the City's own contract, Mayor Lozano gave out those licenses and still hasn't collected the money owed to the City. It's questionable if that money will ever be collected.

It appears, that the City is making up revenue, as it did with the successor agency, to make it's numbers look good. But unless that money is in their hands, they don't have $2 M.

Also, the City says it gets money from a vague category called "internal service funds" in the amount of $4.8 M. Apparently, that's money it used to collect but no longer does so. I asked an expert forensic auditor about this category of revenue, and she said that it's not real. Another lie, essentially. In short, the City is alleging $9.2 M more than it actually will have.

So, really after adjusting for all these numbers, the General Fund, which is meant for operational costs, should have about $28.6 M, compared to the City's alleged $37.9 M. (This is still a generous revenue estimate, but because it's more closer aligned to the actual figures of financial year 2015 and 2016, this seems like a more plausible sum.)

Next year the City projects that the operational costs - such as the police department, parks and recreation, and the city administrator - will be $33 M. That means, in operational costs alone the City will be running at a loss of -$4.5 M, $5.3 of which will be in paying just interest on loans. That means, the total operational loss will be $9.8 M.

According to the City's budget, the Capital projects will be running at least a $8.1 M loss. (I believe it's more of a $4.7 M loss, because the City adds loans on the interest payment in capital projects, which it is not.) Hence, when you add the operational losses with the capital losses, for next year, the City will be running at -$14.5 M loss, ($9.8 M in operations, and at least $4.7 M in capital projects).

City officials and employees in total will get $1.7 M in raises, even when the City will overspend -$14.5 M next year.

Although the City will be overspending -$14.5 M next year, -$9.8 M of which is for operational costs, such as payroll, litigation expenses, and interest loan payments. The City wants us to believe that it's almost running at $0 loss. But that's far from the truth.

This is how the City tries to deceive us. Next year, the City estimates it will be spending $33 M. If you go with the City's figure, because it brings in at least $33 M in the general fund, there won't be a loss.

But if you go with my estimated revenue stream of $28.6, the City will be running at an actual loss of -$4.4 M in departmental expenses, and another $5.3 in paying interest on its loans.

Here's who's going to get these raises.

-The City Council and City Clerk, asked for a total raise of $238,000+.
-The City treasurer asked for a $7,000 raise.
-The Police administration, such as Captain, perhaps even lieutenants, will get $227,000+.
-The Police Chief, Michael Taylor and his Chief department alone will get $209,000+.
-Rose Tam and her finance department will get $196,000+. (This is a lot of money, considering there are only 8 staff members in Finance. Rose didn't tell us how much is going to her alone.)
-The CEO, Shannon Yauchtzee, asked for $119,000+.
-Parks and Recreation Director, Manuel Carrillo, and his department will get $94,000+.
-The Public Works Director, Sam Gutierrez, and his department will get $67,000+.
-Community development Director, Andre Dupre, will get $25,000.
-Community development, for the Community Development block grant will get $410,000+.
-Of all the departments, the police department got the largest raise, which totals $770,000+.

Hence, the increase in cost of the city officials, the directors, and the top police brass totals $1.2 M out of the $1.7 M budgeted for departmental increase. In other words, 71% of all the raises is only going to the City officials, directors, and police brass and their departments. (This the same city, who gave the head boxing coach a 40 cent an hour raise before firing him. He worked there for the City for 20 years.)

The City hides it's legal costs of an estimated $3.62 M.

The City has it's legal costs spread out in different categories, rather than in one. There's a strong possibility this is being done to hide the real legal costs of the City and the true pay of the city attorney.

The City codes legal costs to the city attorney's office; under various departmental expenses, such as the police and administration; and under nondepartmental costs.

It appears that the largest and most alarming increase in litigation costs is in the non-departmental category, which has increased over $2 M. It appears this is the cost of the City's litigation insurance, which will be $2 M more next year. This generally happens because the insurance actuaries figured that Baldwin Park is too risky to insure, because it's chances of getting sued and losing big damages are incredibly high.

The actual costs of litigation cannot be deciphered in the City Budget. In 2016 - the contracted law firm of Tafoya and Garcia LLC charged the City over $614,000. In 2017, the city attorney charged the City $442,000 and projects to do the same for next year. (It could be much more, as we don't know if the City Attorney charged under other billing codes, which he at least did for administration and the police department.)

Nonetheless, besides hiding litigation expenses by different departments, litigation expenses have also been charged under the categories of "non-departmental" either "contractual services" or "transfer outs" or perhaps both. Besides Tafoya and Garcia, the City has outsourced legal work to at least three other law firms. In 2016, contractual services cost the City $1.01 M. Transfer out costs came to $920,000. Hence, a best guess of the legal fees being charged to the City is around $1.62 M a year.

Hence, legal costs for the next financial year is estimated cost $3.62 (legal fees and litigation insurance).

The City hides it's interest payments of $5.3 M a year.

What's not clear is how much interest the city will owe on the $119 million it's borrowed. The answer is obscured by the confusing breakdown of costs of the successor agency and the names of the various capital projects. (I think of interest payments on existing debt as part of the operational costs; so that's where I added it.)

Another big problem with the budget is that the City doesn't anticipate the interest it has to pay on it's pension bond of $55 M. But it does conveniently remove the cost it won't have to pay CalPERS - which again makes the numbers look better.

The interest the city has to pay on it's loans is estimated to be $5.3 M. The city alleges that its interest payments are about $3.4 M through its successor agency. But again, the city didn't add the interest payment it has to pay on the $55 M bond it wants to get. And if it doesn't get it, it needs to add back the interest payment it owes CalPERS.

A second check shows that $5.3 M is a reasonable estimate of the interest the city owes on its debt. The City owes at least $119 M. An average of 5% interest would make the yearly payment equal $6 M. So, that means the debt is anywhere between $5.3 - $6 M, assuming we found all their loans.

Key findings and Red Flags

The budget is riddled with red flags, stressing problems with accountability and oversight. Besides all the findings presented above, the City has not disclosed on its budgets that it owes $119 M (which is a combination of the pension debt and the loans it owes). In other financial statements, it's made up that it has $22 M in assets in a phantom successor agency. (Isn't that called lying?)

The City budget also doesn't reflect how much it has currently in all of it's bank account. Revenue streams are also missing.

The two big revenue streams missing is how much cash does the recreation program bring in for the City? (Is Carrillo pocketing the money himself?) Also, where is the income stream from the police asset forfeiture or the Baldwin Park Franchise Fund? Are these numbers not being reported, because players are taking this money for themselves?

Also, do the city council meetings reflect when all these financial decisions were made, and when, and why? Under the Brown Act, which requires transparency in government decision making, these decisions should have been presented to the public - before it went into a cryptic and confusing and "cooked" budget report.

It appears that the City's strategy for justifying the lucrative raises it wants to give itself next year is being done by misrepresenting how much money it actually brings in, hiding its debt and the accruing interest, and underestimating the cost of contractors (including the city attorney and legal services).

Thus, 31% of the City's operational costs are going to paying loan interest and litigation costs. Instead of fixing the problem though, city officials, management, and brass have all given themselves raises though.

Conclusion: Future Concerns

This report hasn't explored why the City is expecting to run a loss of -$4.7 to -8.1 M in capital projects. I wonder if this is because it plans to launder the $55 M bond money through contractors involving capital projects. The City of Beaumont did the same thing. It stole $43 million with over 40 secret bank accounts, primarily by using contractors.

At this rate, it won't be long before the City will have to file bankruptcy. Tam's best representation of the reserves is at $14 M. When I looked at the books years ago, it was at $6 M. So, running at a $14.5 M loss would require the City to exhaust its reserves or to go out for loan. (This makes me think that the $55 M bond it's going out for will have to pay some of the current operational cost, and not be used for its intended purpose of paying out the CalPERS debt.)

Although the $55 M bond the city is seeking may buy it 2-3 more years, because a third of its budget is on litigation costs and interest on loans, it cannot continue maintaining operating costs at this level at the current revenue stream. Imagine, if a third of your income went to paying off credit card interest alone.

Although it may be illegal for the City to do so, documents obtained by public records act requests have shown that the City put up the Recreation Center, donated by one the founders of In-n-Out, as collateral to U.S. Bank for all the loans. Hence, the children and senior citizens can lose their recreational programs, because of the city's financial mis-management and corruption.

What I think this is showing, and I'll write a follow up article, is that these city officials and directors want to take out a big $55 M pension bond to give themselves raises and retire lavishly. Follow up article to come.

This case study of dissecting and reconstructing Baldwin Park's budget stresses the problems with oversight and accountability regarding local government. The solution will require processes, law, and enforcement of law to hold accountable those who engage in deceptive practices, such as the one potentially illustrated here. As I studied in Animal Farm: “The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”

*I've taken out the litigation cost from the $33 M reported by the city, to show it as it's own category.
**The City's put loan interest payments as a capital cost, but it's an operational cost to me. I've removed it as a capital cost, and put it as an operational cost.

By Banksy
It's come down to us checking everything our government does.

Friday, August 24, 2018

Understanding the Municipal Bond Market Scam - a California Trend

By Banksy
Once upon a time, local government bonds were considered a safe haven, where it was guaranteed you would get your money back with some earned interest. But recent local government bankruptcies challenge that notion. Since 1994 - starting with Orange County - governments have been filing bankruptcies in the billions of dollars. Investors should not put blind faith in local agency bonds, especially in corruption-stricken cities. It is highly likely bondholders will lose their investments when such local corrupt agencies file bankruptcy. As an example to stress in alarming trend in California and perhaps elsewhere, this article will show how the City of Baldwin Park misrepresents its financial accounting to deceive investors.

Before understanding the California municipal bond crisis, we need to look at the Godfather of corporate scandal: Enron. Enron was an energy company that engaged in "cooking the books" by stating every quarter it was earning incredible profits, when it was actually hemorrhaging money. In a nutshell, Enron did this by hiding their losses in other alter-ego corporations. Hence, Enron's books always showed it was making a profit. (It was also gauging California's deregulated energy market.)

Although this is obvious, the basic rule of investing is that investors want to put their money in winners and not losers, because winners will bring you back more money over time. Enron looked like a winner. It kept reporting profits, but it was really a sinking ship.

At the end of the day, Enron executives, like Ken Lay and Jeffrey Skilling fleeced not only investors, but also employees from their pensions. The main takeaway point is that Enron had to lie about its finances, so investors would keep putting money in. Only then, could the Enron executives steal stockholder funds.

Let's come back to Baldwin Park, which is doing the same thing. Yet, cities can't sell stock. Instead, they sell bonds - which means investors are guaranteed to get their money back, plus interest in loaning government agencies money. (What they don't tell you, is you don't get your promised money back if the local agency files for bankruptcy.)

So, like Enron, Baldwin Park has made the City's finances look good, when it's really a sinking ship. The city's finance director, Rose Tam, did this in at least two ways, possibly three. First, it alleges that it has $22 million more in assets in something called the Baldwin Park Successor Agency. But in 2013, Tam reported that the Successor Agency owes $64 million.

It can't be true that the Successor Agency is in the plus and negative at the same time. Can something be boiling hot and freezing cold at the same time? No. It appears that this is an outright lie.

Second, also like Enron, the City took the employees' pension. The City has $51 million more in pension debt than its reporting. In other words, the City's financial statement doesn't reflect this owed money.

Like Enron, it took pension money from the employees, and never put it with its investment agency, CalPERS. In total, Baldwin Park owes at least $119 million, very little which appears to be in assets. (I reported earlier it was $117 million, but I found another loan recently for $2 million).  That's almost 400% or 4 times the amount of debt compared to the income stream the city brings in per year.

To give an analogy, Mark makes $60,000 a year, but Mark has $240,000 in credit card debt, which is growing still. Almost $100,000 of that is at a really high interest rate. He needs to borrow more to pay off the ballooning old loans. He asks you to borrow some money and promises to pay you back with interest. Do you believe him? Would you loan him the money?

Third, the City alleges it has $12-$14 million in cash. But when I looked at the books, there was more like $6-$8 million. The city refuses to provide proof in the form of bank statements that it has this much money.

Since I wrote my last article, there have been other red flags that echo the Enron scandal. Enron hired the firm Arthur Anderson to audit its books. Guess who else used Arthur Anderson? Worldcom. And Worldcom, at that time point, was the largest bankruptcy in human history, at $3.8 billion. (Bernie Madoff later broke that record.) Arthur Anderson was complicit in both corporations' accounting fraud.

Like Enron, the City's independent accounting firm, Vasquez & Company LLC is in hot water. As of March 2013, Los Angeles County has sued Vasquez for $9 million for not doing its basic job in auditing. Apparently, a scam artist, under a nonprofit, fleeced the county and other agencies out of millions.

Has the Vasquez company been doing its job when it verifies Baldwin Park's audit? I don't think so; if it did, it would have asked questions about this Successor Agency like I'm doing.

Also, a red flag is that a family member of Baldwin Park's former Mayor is associated with the underwriter (the entity that will loan the city the money) of its forthcoming bond for $55 million. Two sources allege that Carmen Vargas, Vice-President of Ramirez & Co., the underwriter, is the sister of Fidel Vargas, former Mayor of Baldwin Park. These facts highlight the lack of independent oversight by interrelating agencies.

I've been asking numerous questions about Baldwin Park's finances currently. Allegedly, the city attorney (and others) have ordered for the finance director not answer any of my questions by email. Then, the city said it would answer all my requests by public records act requests. Now the city says it won't send me any letters by public records act, because I haven't purchased a business license this year, but I haven't even been residing in Baldwin Park for over a year. And one doesn't need a business license to make a public records act request.

Like Enron, questions into the city's financing are met by fierce hostility. The ex-CEO of Enron called an analyst an "a**hole" after he asked for Enron's balance sheet.

But unlike Enron, Baldwin Park is not a corporation; it's a government agency. Under law, the City must provide answers and not give taxpayers the runarounds, because a city exists to supposedly serve the people. If questions are asked, especially basic ones about the city's finances, answer must be provided. But like Enron, under violation of law, the City refuses to provide an accurate balance statement of how much it really owes. If everything was really clean, the city would have no problem easily and quickly answering basic questions.

Currently, it appears that California's municipal bond market may be one alarming scandalous trend. The Securities and Exchange Commission (SEC) is investigating Montebello Unified School District (MUSD) for potential fraud with the issuance of their bond. (Incidentally, the financial officer at MUSD is Mark Scavarny, former Superintendent of Baldwin Park School District.) Like Baldwin Park, the underwriter for MUSD's bond is Ramirez & Co. Also, the SEC popped the City of Beaumont for also cooking the books. Later, news surfaces that $43 million was embezzled through over 40 bank accounts. Including Baldwin Park, here are at least three cases that show a trend in potential bond fraud.

Given that the Parks and Recreation Director, Manuel Carrillo has been caught laundering money through his sham nonprofit, I wouldn't be surprised if he's been doing this for previous bonds and wants to do this with the ones coming up. (It almost makes me wonder if this whole bond racket is a money laundering scheme, like the one Bernie Madoff was involved in.)

How do we proceed from here?

Investors and bondholders need more answers. Like Enron, how much did Baldwin Park loan its officers and employees? It won't say.

Also, like Enron, where did the previous $66 million that was borrowed go? Accounting needs to be provided.

And finally like Enron, you know an entity is at the end of its ropes, when its borrowing new money to pay off old debt, which is known in the trade as a Ponzi scheme. So, let's get this straight - Baldwin Park wants to borrow $55 million to pay off existing pension debt.

It almost sounds like taking a cash advance on your credit card to pay off part of the mortgage. You heard it here first: If it's a municipal bond from California that's babbling "Buy me" - stay away. "[I]t's Californication."

Thursday, August 16, 2018

Baldwin Park owes $115 million and wants to still borrow $62 million more: Where'd all this money go?

The City of Baldwin Park owes $115 million and wants to still borrow $62 million more. Baldwin Park would then owe $177 million. In 2016, Baldwin Park's Finance Director, Rose Tam, reported that Baldwin Park was running at a loss of -1.46 million a year. For the projected budget of 2018-2019, Tam reports that there will be almost no savings or loss. So, let me ask you a question: If the City is running at a loss, or not saving any money, how is going to pay off $115 million?

Answer: It won't. I predict at some point, Baldwin Park will file bankruptcy. What the current corrupt council members and administrators are hoping is that they won't be around when it happens.

$177 million is a lot of money. With that amount of money, we could send 3,400 kids on a full scholarship to a state school. That's 3,400 children that could become doctors or lawyers or engineers or scientists. That's 3,400 families that could get out poverty. But nope, given the previous pattern of Baldwin Park, all those hundreds of millions of dollars will be gone.

See; that's why corruption is such an important topic. Who is more important: A few council members and directors or 3,400 young adults for future? Corruption, robs those 3,400, or all of us, to make a few, wealthy at the expense of our entire community.

Of the current $115 million that's owed, $51 million is owed to the pension fund CalPERS. The City collects money from their employees and is supposed to put given that money to the CalPERS organization for them to invest, so that they could have money for retirement.

But every year, Baldwin Park just pays interest on what it owes CalPERS. So, if you're an employee of Baldwin Park, you know what that means? They've been taking your money every paycheck and spending your money, and not investing it for you.

Doesn't that worry you, just a little bit about what's going to happen to your retirement? The question is how come the employees aren't asking where their retirement money, taken from their paychecks, actually went?

The rest of the current outstanding debt was in the form of $64 million in municipal bond loans to do various projects in the city, since around 1990. I'm not sure where all that money went, but to me, all that we have to show for it is a useless parking structure.

But to keep bond investors and employees happy, they have to paint a rosy picture of their actual financial health. But is it real? Are they actually cooking the books?

There are some concerning red flags. The first one is that Rose Tam in 2016 represented that Baldwin Park actually has around $38.7 million in savings. $22 million, the bulk of that is held in Baldwin Park's Successor Agency. But according to sources, the Baldwin Park Successor Agency doesn't have that money, and instead made a promise to pay that money back someday, one day to the city.

But they don't have the money to pay the city. She also says that the City has $14.2. million in cash. But when I inspected some of their bank accounts, I remember there only being around $6 to $8 million. Where did this extra $6 to $8 million come from?

The second red flag is that the City doesn't have an independent audit committee. The same city council members sit on the board of the audit committee. This an obvious conflict, but the most probable reason is so that someone independent can't figure out what's really happening with the finances. It's like foxes guarding the hen house, which is exactly what they want.

The third concerning red flag is that the city refuses to answer questions about their own finances.

So, I asked questions to City Manager Shannon Yauchtzee and Finance Director Rose Tam. You would think that a citizen asking about the city's finances is a safe question. But not in Baldwin Park. Yauchtzee forwarded the email to the City Attorney Robert Tafoya.

By email - immediately Tafoya responds. He alleges he researched it (within the short time that Shannon forwarded the email) and writes "There is no such law [to give information about the finances], and you know it. . . . The City is closing this issue out."

I responded back and told him such law does exist. And I wonder if it's the city's final and official answer is to close out the issue.

Instead, I go back to the Finance Director and City Manager and ask them my questions again. Tafoya responds for them and writes: "[T]he information being demanded by Mr. Cook is not mandated to be disclosed by federal or state law. . . . he [Mr. Cook] likes to be an antagonist. Please disregard Mr. Cook’s latest message to you."

(I guess asking about the city's finances make you an antagonist now.)

Not liking me asking about the city finances the city attorney then writes: "Paul, you should avoid those dangerous places. If something happens to you, who will save the world?"

(Is that a threat?)

He then adds: "Paul, you are sooooo funny and I don’t think you even try. I really enjoy receiving and sending emails to you because I get to bill and I get a few laughs along the way. Can you please keep sending these emails so that I may respond?"

All this, just for asking some simple questions about how the City is calculating how much it actually has. The City has still yet to respond to the actual questions of their finance.

What the City Council and administrators do appear focused on, however, is going out for more loans and getting the Chief of Police's incredible contract re-approved.

One, as of August 15, 2018 - the City asked to get $62 million in loans. $55 million of those loans are allegedly to pay CalPERS back, but if they owe $51 million, why did they need to take an extra $4 million out? Two, the Chief of Police wants to renew his sweetheart contract that says he can only be fired if he commits a rape, murder, or other kind of felony.

If you haven't figured it out - it appears that the City took the pension money, co-mingled it with the General Fund, and used the pension money to pay for their operating expenses - like getting bigger raises every year. In short - was your pension money taken to pay Carrillo and Taylor and Yauchtzee more? Very likely.

Now that we've exposed what these crooks have been doing in Baldwin Park, they're alleging they're going to borrow money to pay the pensions without intending to ever pay back the bond underwriter or bond investor. (Personally, I don't think they'll be paying off all the money they owe Cal-PERS.) In any event, the whole plan sounds a lot like robbing Paul (the bond investor) to pay Peter (the employee's pensions).

What does the future hold for Baldwin Park, the employees, the bondholders, and citizens?

Well, just look at Detroit or Stockton, both who filed for bankruptcy. In Detroit, after bankruptcy, bondholders got back 30 to 40 cents for every dollar . And for employees, your pensions could be slashed from 10% to 34% (maybe more), and healthcare may not be covered. For us, the residents, we will most likely lose key services, like having a police department.

I have some takeaway points and recommendations. I wrote about organized crime groups stealing our money. It appears that they're not only taking in the revenue generated by taxes, but squeezing even more money from pension checks and loans.

The second takeaway point is that it should be illegal for cities to borrow so much money. It's a form of taxation without representation, because we're indenturing the next generation into debt, and they had no say in the matter, because they were too young to vote.

(Remember that the American Revolution was caused because King George. He wanted the colonists' money, but the colonists had no say in how that money was spent, because they were in America and not represented in London. When politicians, who have a short-term office limit, bonds the taxpayer into debt that's longer term than their office limit, that's another form of taxation without representation.)

I predict that at some point the city will have to file bankruptcy. Bankruptcy is in line with the strategy of these crooked council members and directors - who will have taken the hog's share and be gone without any accountability.

A combination of two events will trigger a bankruptcy. When 50% to 70% of the city's budget goes out to pay (1) bond interest and (2) pensions, it will have to file bankruptcy.

The main recommendation depends on who you are. If you're an investor - stay away from Baldwin Park's municipal bonds. If you're an employee - demand answers. Every time, people like Carrillo, Tafoya, or Taylor give themselves a higher raise, that's your pension money they're taking away from you. And if you're a regular taxpayer - like me - demand accountable and prosecution. If you're a policy maker, administrators have to be held responsible for misrepresenting numbers or not being forthcoming about the actual finances.

Hans Christian Anderson was right: The Emperor has no clothes. Baldwin Park really doesn't have any money; they've taken it all, and now we live on borrowed time and money.

Is this how Baldwin Park will look in the future?
By Banksy

Thursday, August 9, 2018

No Surprise; Baldwin Park also Hires the Albright Law Firm for Hatchet Jobs

Clifton Albright,
Only partner left at Albright, Yee, & Schmit
Corruption requires both contractors and attorneys. Hence, it's no surprise that the City of Baldwin Park has hired a contracted attorney firm called Albright, Yee, and Schmit. The behavior of the Albright firm shows that lawyers need to be better disciplined.

The employee that takes care of the billing is a litigation consultant who goes by Cristeta Paguirigan also known as Cristeta Klaparda. (She has a lot more aliases than that.) 

What Albright doesn't want you to know is that she's a disbarred lawyer that forged documents in criminal court to try to get her client off. (Remember; when Tafoya misrepresented my signature in court too? Are these people all learning this trick from each other?)

But that didn't stop her from getting out of the legal profession. California and Colorado permit disbarred attorneys to work as paralegals and consultants.

Clifton Albright, a regular campaign
contributor to LA politicians, with
former LA Police Chief, Charlie Beck.
Wonder if it has anything to do with $2.4M he 
billed the City of Los Angeles?
So, during the late 90's and early 200's, Paguirigan got a job with the City of South Gate, working under Albright's firm. Within a three month period, she billed around $171,000

Does that mean that Paguirigan is claiming to have worked over 71 hours for 12 weeks? Seems kind of incredible, no?

The firm in fact sent the same bill twice for $6,000, which they allege was an "accident".

Besides forgery, 
Paguirigan has been alleged to have stolen at least three sums from her clients in the amounts of $15,000; $18,590; & $37,500, which totals about $71,090. Judge Michael A. Tynan said: "The defendant [Paguirigan ] is a danger to herself and the community". Yet, the City of Baldwin Park contracted the firm that hired her out. Has any one noticed that this city has a habit of hiring criminals, especially felons? 

As of December 5, 2002, Paguirigan still owed $300,000 in outstanding judgments. I couldn't find records to show whether she paid this yet.

We do know that she had at least $8,800 to give to Council Member Monic Garcia to run for State Senate. She's also started a marijuana shop called The Jade Effect. And Jade Effect and Baldwin Park are in business together. A
round December 14, 2017, the Jade Effect received a benefit from the City of Baldwin Park when it awarded marijuana licenses to the three associated businesses that purchase the Jade Effect's services.

And guess what? 16 years later, Paguirigan still works at the Albright firm. Only now, Baldwin Park instead of South Gate is a client.

I first met Clifton Albright - as he tried to coerce a confession from the now fired boxing coach Julian Casas. I believe Albright was trying to trick a boxing coach into giving a confession. The boxing coach was making minimum wage. Albright was surprised to see me, because he wasn't expecting me to show up and defend Julian. That was my first contact with him and his firm.

This isn't the first time Albright has fought city employees. The LA Times reports that Albright defended the City of Los Angeles against police officers who complained about ticket quotas. He charged $2.4 million in doing so.

Other nasty work they've done is defending at least one serial sexual rapist and abuser. The Albright Firm and the Tafoya tag teamed together to lose the Bikram Yoga trial. And for their client, they lost him a $7.4 million judgment. If you think about it, it's a lot of money. 

But after the plaintiffs tried to collect, they found all Bikram's assets disappearing. Now, they're playing out a common scheme known well in Baldwin Park. Bikram is filing for bankruptcy - which means the plaintiffs probably won't get anything.

So far - I've litigated against four of Albright's associates: Benjamin Caplan, Lori Nielsen, Jamie Wright, and Oliver Lasley. I've had problems with service by Nielsen, Wright, and Lasley.

Oliver Lasley not only files papers late
with the court; he withheld these documents
from me and served me five days later.
Although he says he works at Albright, 
he state bar website says he works for Lasley.
Very strange. More investigation needs to be done.
Let me explain. This firm is in the practice of not delivering you papers, or they deliver them to you late. And they do this, so you either have less time to respond or can't respond at all. 

It's disrespectful. I give them their papers on time, so they could have as much time as they need to response to my briefing. 

There's an unspoken rule that lawyers aren't supposed to write such things about other lawyers, but since we're a self-regulating institution, I think a discussion about such bad faith tactics need to be exposed, especially when these lawyers are making a small fortune off of taxpayer money. 

In one case with Albright, it got so bad, that I had to file a letter with the Court of Appeal against Nielsen, because they just weren't giving me their court filings. 

Then, Wright in September of 2017, while the city knew I was away and agreed to email service, they tried to slip in court costs against me. If I didn't respond in 14 days, they would have automatically won. Well, I found out and filed a responses. 

To their surprise, I stopped them.

The City and its lawyers want to spill my blood over $356.16. It makes you wonder, how many thousands of dollars they're billing to get this money. I can only guess that the city officials and administrators are obsessed with revenge.

And that brings me to another question. I'm curious as to how much in total this firm has charged Baldwin Park. I estimate it has to be close to $200,000 or more. But the City doesn't like disclosing such facts. 

Former attorney, Jaime Wright,
Doesn't she kind of look like
JoAnna Est - who sued local activist
Joseph Teixeira?
In any event, I've outlasted a number of the Albright lawyers. The Albright Firm can't seem to keep associates. Already, Wright and Caplan are gone. 

But what's more surprising is that the other two partners, Yee and Schmit, have also left. Schmit's gone to Washington State, actually. Allegedly they left for "retirement" purposes, but I don't believe that's the real reason.

My last encounter with this firm was recent. Their newest lawyer, Mr. Lasley - again filed a late opposition with the court. Then waited five days to give to me the papers. This was so I wouldn't have time to response to his opposition. Not good. 

Well, let's see what they do next and how this adversarial relationship evolves. 

For my readers, I write this article so you can see why lawyers are hated so much. And as long as attorneys don't pay for their bad behavior, why wouldn't it continue? Bad faith litigation tactics to a lawyer is what steroids is to an athlete in sports.

In California, the legal profession has certainly slid into a serious ethical crisis. Or, maybe it's always been this way.

Learning about Baldwin Park has certainly confirmed what Mario Puzo said: “A lawyer with a briefcase can steal more than a thousand men with guns.”

Monday, August 6, 2018

How organized crime steals our tax money in government agencies

People in Slovakia protest the murder of a journalist
who investigated ties between politicians and the Italian mafia.
Photo: Vladimir Simicek/AFP
(c) Local Italy
When the business of the mafia comes to mind, we usually think of cocaine, heroin, gambling, prostitution, and even human trafficking. One venture that's probably overlooked is the theft of taxpayer money. But the more you see the larger picture of Baldwin Park and elsewhere, don't you think that's what's happening? Here's my theory on how it all works, starting with the mob's business objective.

The first thing you have to know about organized crime is that they're in the business of easy and big money. In other words, these organized cartels don't want to work hard or honestly, like the rest of us. They see that as what chumps do. Remember that lesson: Easy money.

Usually, the mob's business activities are illegal. Cocaine is fairly cheap to make, but because it's illegal, this drives the price up incredibly, because of the risk of distribution. Right? But, it's still easy money for the executive or mob boss controlling the show. Prostitution is easy money for the pimps. Selling people into slavery is big money too, right?

But the mafia is creative. It doesn't stop there. The mob even rigged the McDonald's monopoly game. Someone in the mob saw that McDonalds was giving away millions of dollars in prize money and had a simple thought: "What if I could steal it?" (This is how the mafia thinks. Remember: easy and lots of money.)

After meeting the man who was responsible for distributing the winning pieces, the mafia sent their sales rep to meet him at an airport. And the deal was simple: Win, win, right? The mob would provide the operations for stealing McDonald's prize money and the distributor would receive a cut. (And that makes sense, you need a large operation team to pull off such a heist, as the article shows you.)

Let's put our mafia hats on again. A mob boss sees that a local city brings in millions of dollars in taxpayer money and calculates that it isn't too expensive to run a city. He thinks: I'd be filthy rich if I could have the city borrow against itself, and we could take out the biggest loans possibleOnly if that excess money could be siphoned away, I'd be rich, no? But how to do it is the problem.

In other words, millions of dollars are locked into the city bank account. I just need to figure out a way to get it out. (More on the how over the next few articles.) If you don't believe me, see how this group of city officials stole $43 million from the city coffers.

One of the first thing the mob needs to do is send their people to run for public office. Hey, isn't that why all the Mayor and Council Members and a number of directors are from Texas, originally? . . . Yeah! (See my section on the potential origins of these directors and administrators in my identity theft section.)

After taking over politics, they can then enact law and control the police force to do whatever they want. (Now, it appears that these officials and administrators actually lie about their origin. Key point: Don't trust what they say.)

When I was in Cabo, Mexico, I remember reading about how the Mexican mob tried to do this in a small mountain town of Cheran, which has a population of 20,000. The mob wanted to chop down their timber and make a fortune from it. (Stealing natural resource is big and easy money.)

But the local people, mainly women, wouldn't have it. They fought back. They burned cars of candidates. And they drove the mob back home. The town has made it illegal for outsiders to run for public office.

According to the BBC, in the recent year, "in the last year there have been no murders, kidnaps or disappearances." Cheran is currently self-governed, and it is considered one of the safest places in the Mexican State of Michoacan.

Let's come back to Baldwin Park. Instead of forests being logged away, replace that with taxpayer dollars in the bank account being siphoned away. That gives you the main business objective of the politicians and administrators in Baldwin Park.

For the activist, the activist must identify where the stockpile of money is, whether it be McDonald game pieces, taxpayer money in a bank account, or wild timber.

The solution to getting rid of organized crime has been shown with the people of Cheran. I suppose there has to be a collective awakening of the citizens and a desire to rid ourselves of these outsiders - who only want to steal our resources - which could be used to better the community and the future for the next generation. It's our responsibility to take back our governments and restore law and order.

Wednesday, August 1, 2018

Day 396: On creativity and blog redesign

Did I do that?
While in the French Alps, I redesigned my blog. The idea just came as naturally as trees grow in sunlight. Must be all the fresh mountain air.

I had to go through 573 articles I wrote since 2011, organize them, and then index them. I was trying to solve a problem: How do I maximize the access to all the articles I wrote?

The cumulative effects of all my articles was a lot more powerful than I realized, and when you see how corrupt Baldwin Park is visually, it's quite disturbing they've been getting away with this for so long. Here's my corruption page. Let's hope it brings about the prosecution of the corrupt. But real problem this blog is showing is that our checks and balances against power has failed. Our system needs a huge overhaul.

Doing this work showed me something positive and important, though. The last five years of my working life has been chronicled on this blog. And I have to say, triumphantly, that I've fought the good fight, ran the good race, and spent my time and labor well. I've achieved a lot more than I actually thought possible when I started. And generally, I did the right thing, even when it cost me heavily. Hence, I feel at peace with all the work I've done.

I told my mentor - "I want to live the next five years doing the same kind of things. I just don't know how with regards to my finances. I'm sure God will provide, as he's done."

He encouraged me to go for it.

Well, other than that, I've been eating wonderful French food, which isn't that cheap. Yesterday, I had duck and wild mushrooms and a croissant and some mushroom ravioli. It was beautiful! Mmmm!

I love my little village. The people know me now. They have the most amazing cheese souffl├ęs and raspberry tarts for sale. And everyone is very kind, though very few people speak English. Some evenings, I go running. I love how the sun sets at around 10P.

I love France! I hope she loves me too. I love France so much, I might come here again next summer. Why not? I don't remember liking France so much in my other two trips here.

Other than that, I've been learning some French (not too much) and reading my Spanish on my free time.

But for now, I'm exhausted. 573 articles is a lot to go through. It took me three days just to organize all the information. Let's hope that it has an effect.

From the French Alps,


Will Baldwin Park Police Chief Make Over $650,000 for 2018?

Police Chief, Michael Taylor
(c) LA Times
On November 15, 2017, Baldwin Park City Council approved an employment contract with Baldwin Park's Chief of Police - Michael Taylor for what appears to be over $650,000, effective on December 1, 2017. On the surface, Taylor's new employment contract, drafted by Robert Tafoya, the City Attorney, appears to be only for an additional raise of $15,511 a year, which would bring his base salary up to $234,000 a year.  But a buried clause in the contract, on page 2, paragraph 3(c), appears to make Taylor's new pay effective from December 1, 2013.

In other words, Taylor will receive backpay from December 1, 2013 - which would mean receiving a bonus check of at least $419,000. (This sum was calculated by the difference owed to him from these past years. The data was provided by Transparent California.) The $650,000 is the salary Taylor will receive from Dec. 1, 2017 to Dec 1., 2018. This doesn't include his perks and benefits.

To put Taylor's new salary into perspective, Los Angeles Police Chief Charles Beck makes $372,714.52, which includes all his benefit. Taylor works four days a week, and for it, he will get nearly twice Beck's salary.

But Beck serves 4 million residents in Los Angeles. He has 9,000 sworn officers and 3,000 civilian employees. In contrast, Baldwin Park has 80,000 (or 50 times less the) residents and about 80 (or 112 times less) sworn officers  and 0 civilian employees.

The question on resident's mind is why a public servant like Taylor deserves such extraordinary backpay, especially given the fact that he was fired back in September of 2013 without cause. Other black marks under his tenure include settled lawsuits for allegedly jailing an undocumented resident without probable cause, violating California's TRUST Act and for jailing an attorney activist for protesting at the park, violating the First Amendment of the US Constitution.

Under the new contract of $650,000, Taylor has requested that he not receive an annual performance review. The Council agreed.

In previous years, public servants who received such large salaries, like Robert Rizzo of the City of Bell and Jose Fernandez of Centinela Valley School District have been prosecuted for public corruption. But it appears that Baldwin Park goes unchecked as a result of having a poor record with complying with state transparency laws. The pattern of voting irregularity may also be contributing to the problem. No wonder the artist Eartha Kitt once said: "Greed is so destructive. It destroys everything."