State Audit Finds Misuse of ‘Pork’ Money

A state audit of pet projects funded at the behest of various lawmakers found widespread misuse of the money, with investigators concluding that more than $1.1 million never went where it was supposed to go or cannot be accounted for.

The report, which was released Wednesday by state Controller Steve Westly, cites museum projects that were paid for by taxpayers but never built, project directors who funneled state money into their personal accounts and a city that left the state on the hook for $700,000 after abandoning a sports complex project.

“We have found problems across the board in the way these grants have been administered,” Westly said.

The report follows a “pork-barrel” scandal that helped precipitate the resignation this month of Secretary of State Kevin Shelley.

Shelley had helped a campaign contributor secure state money for a community center in San Francisco.

The community center was never built, but the organization that received the grant kept the money -- and organization leaders gave Shelley substantial campaign contributions.

State and federal authorities are investigating whether the grant was the source of the donations.

At issue in the controller’s report is $102 million in pork grants given out from 2000 to 2002, when state coffers were flush. The money was distributed by the state Parks and Recreation Department, outside of the normal process for disbursing such funds. Instead of the parks department distributing cash based on its own rigid criteria, the grants were made at lawmakers’ direction, with little administrative oversight.

Scores of projects were funded. Westly’s office examined 20 that received $14.26 million.

Among the projects most troubling to investigators was the Western Center for Archeology, an organization in Hemet that is constructing a museum with $30 million in state grants.

“There are major concerns there,” Westly said. “There are conflicts of interest, we are talking about big dollars, and it is not all accounted for.”

“That is one where we will be taking follow-up steps,” he said.

Investigators said more than $606,000 may have been misspent. For example, a board member was paid for work, but there was no evidence that the work had been completed.

Museum officials countered that state funds were not used for all of the expenditures in question, and that they have logs that show work was, indeed, performed for the salaries that were paid.

Another project that has alarmed officials is the Colour Me Freedom Foundation, which was established to create a memorial for the Rev. Martin Luther King Jr. and Cesar Chavez at Crenshaw High School. The state awarded $221,625 to the project.

But all the foundation appears to have to show for the money, according to the report, is a portable building that is used for storage at the school.

Investigators said that just before they visited the site in September, some artifacts appeared to have been hastily arranged in the building, which has no utility service and is inaccessible to students and the public.

The executive director of the foundation, the Rev. Willie J. Bellamy, wrote checks to himself with the grant money, “apparently for personal reasons,” the report said.

When confronted about those issues, according to the report, Bellamy denied any wrongdoing and said the receipts that he showed investigators during their audit proved that he spent the state money appropriately.

Redlands, meanwhile, was awarded $5.2 million to build a sports stadium. The project was dropped after city officials were unable to get the necessary environmental permits. The city had spent $700,000 to develop a name and logo for the complex. Now the state can’t get that money back.

City officials said the project was almost through the environmental review process when it was blocked by the U.S. Fish and Wildlife Service.

At another project, the Breed Street Shul in Los Angeles, officials awarded $60,000 to an architecture firm owned by the organization’s vice president. Investigators said the firm documented hours worked on the restoration, but provided little detail on the work performed.

Breed Street representatives said they had implemented a number of safeguards to ensure that public money would be spent according to all state guidelines.

Westly said his office and other government agencies would try to get money back in the “most egregious” cases of misspent funds. He also is proposing an overhaul of the way grant money is awarded, to ensure that the types of problems outlined in his report do not continue.

To that effect, he is supporting a bill written by Assemblyman Joe Canciamilla (D-Pittsburg), AB 725, which would require grant recipients to more clearly state how the grant money would be spent, and then hold them accountable.

“In some cases there are virtually no standards in place,” he said. “That kind of thing is unacceptable.”