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January 23, 2013
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Report: California State Parks financial misdeeds were deliberate

The California Parks Department had a difficult 2012.

After unveiling its wildly unpopular plan to close 70 state parks, including two in Nevada County, the parks department saw Director Ruth Coleman resign amid allegations the department willfully hid $54 million for the state finance department for more than a decade.

A subsequent investigation conducted by the California Attorney General revealed $34 million of the sum was located in an Off Highway Vehicle fund and that the failure to disclose the funds was due to mistakes in methodology of reporting as opposed to an intentional cover-up.

However, the $20 million found hidden in the State Parks and Recreation Fund was intentionally hidden by officials within the department from a period dating from 2003 until July 2012, when Coleman resigned, according to a report authored by California Deputy Attorney General Thomas Patton.

The under-reporting likely started out as a mistake, but “by no later than 2003, and perhaps as early as 1999, the failure to accurately report all (recreation fund) monies to the Department of Finance became conscious and deliberate,” Patton wrote. “The primary reason consistently given for not doing so was fear that the (parks department) would see its already-reduced general funding cut further if the extra monies in the (recreation fund) were revealed.”

Coleman, who joined the parks department as director in 2002, denied knowledge of the hidden funds and Patton concluded that reports Coleman knew of the funds are “unreliable.”

Media reports attributed their claims that Coleman knew of the hidden funds to employee Cheryl Taylor, but Taylor told investigators that the assertion Coleman was privy to the cover-up was speculation.

State Parks Assistant Deputy Director Tom Domich was informed of the balance of the funds by no later than 2003 and, along with former Accounting Officer Freda Luan-Dun and then-Budget Officer Becky Brown, had conversations about the issue.

Brown may have noticed a growing disparity as early as 1998, according to the report. Former Chief Deputy Michael Harris told investigators he knew of the decision not to disclose the money’s existence shortly after his arrival in 2003.

Similarly, former Budget Officer and Administrative Services Chief Manuel Lopez reported that he knew of funds shortly after being hired, but went along with others in the department in keeping silent on the issue because his superiors thought correcting the error would “call into question why it had been sitting there so long,” according to the transcript of an interview between Lopez and Patton posted on the California Department of Resources website.

Lopez was at the center of an investigation conducted by State Controller John Chiang, which found rampant abuse within the department with employees and managers violating numerous state policies and keyed in payroll with proper documentation or authority, creating the risk of abuse, fraud and overpayments.

In termination papers filed against Lopez last year, the state alleged Lopez’s authorization of illegal vacation buyouts resulted in an illegal expenditure of about $270,000. The state accused Lopez of illegally paying himself $20,000.

Much of the department’s leadership has been replaced in the wake of the series of scandals.

Coleman resigned in July and has been replaced by Anthony Jackson, a former Marine Corps major general, who labeled the malfeasance surrounding the department as a “catalyst for change,” in a recent release.

To contact Staff Writer Matthew Renda, email or call 530-477-4239.

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The Union Updated Jul 19, 2013 02:34PM Published Jan 25, 2013 11:54PM Copyright 2013 The Union. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.