California parks officials deliberately hid millions, report says

SACRAMENTO — Fear of embarrassment and budget cuts led high officials at the California parks department to conceal millions of dollars, according to a new investigation by the state attorney general’s office.

The money remained hidden for years until it was exposed by a new staff member who described a culture of secrecy and fear at the department.

The attorney general’s report, released Friday, is the most detailed official account so far of the financial scandal at the parks department. The controversy broke last summer with the revelation that parks officials had a hidden surplus of nearly $54 million at a time when the administration was threatening to close dozens of the facilities.

Although much of the accounting issues appeared to stem from innocent mistakes and discrepancies, the report said, about $20 million had been deliberately stashed away.

The report said the problem seemed to begin with calculation errors more than a decade ago. But when those mistakes were discovered in 2002, officials made a “conscious and deliberate” decision not to reveal the existence of the extra money, the report said.

Parks officials concealed the funds partly because they were embarrassed, the report said. But they were also worried that their funding would be cut further if state number-crunchers knew they had a larger reserve, according to interviews conducted by a deputy attorney general.

Parks officials underreported the amount of money they had to the Department of Finance, preventing lawmakers from including the extra funds in state spending plans.

The money “was intended to be a safety net,” said Manuel Lopez, a former deputy director at the department, who was interviewed in the probe. Lopez resigned in May while being investigated for a separate scheme allowing employees to be improperly paid for unused vacation days.

Multiple high-ranking officials were involved in concealing the parks money, including Lopez and Michael Harris, the chief deputy director who was fired after the scandal broke. Evidence suggests that the initial decision to keep the money secret was made by Tom Domich, an assistant deputy director who left the department in 2004, the report said.

Domich “unpersuasively denies … his role in the deception,” according to the report. The Times was unable to reach Domich on Friday.

Staff members who pointed out financial problems were ignored by their bosses.

“Throughout this period of intentional non-disclosure, some parks employees consistently requested, without success, that their superiors address the issue,” the report said.

It is unclear whether ousted director Ruth Coleman knew about the accounting problems, the report said. She declined to be interviewed for the investigation; participation was voluntary for former parks personnel.

Officials have not yet determined whether criminal charges will be filed. There’s no evidence that any money was stolen or used improperly, the report said.

The accounting problems were eventually exposed by Aaron Robertson, who started an administrative job at the parks department in January 2012. He told a deputy attorney general that people felt uncomfortable raising concerns at the department.

“There was a great deal of distrust,” he said. “People felt somewhat fearful of coming forward with information.”

John Laird, the California natural resources secretary who oversees the parks department, said new policies and staff are in place to prevent similar problems in the future.

“It is now clear that this is a problem that could have been fixed by a simple correction years ago, instead of being unaddressed for so long that it turned into a significant blow to public trust in government,” Laird said in a statement.

A new parks director, retired Marine Maj. Gen. Anthony Jackson, was appointed by Gov. Jerry Brown to replace Coleman in November. Robertson was promoted to become his deputy.

The attorney general’s investigation is the third report on the parks department in the last month. One more report, from the state auditor, is due this month.

chris.megerian@latimes.com