Blough Cites “Unclean Hands” In Response To SBPEA Lawsuit

(December 22) Bob Blough, the former general manager of the San Bernardino County Public Employees Association, is relying upon the doctrine of unclean hands in his response to a lawsuit alleging he misappropriated or embezzled hundreds of thousands of dollars when he was in charge of the union’s operations.
In a ten-page response to the association’s suit, Blough denies the misappropriation and embezzlement allegations. He is countersuing, seeking $520,000 in general damages, compensation for the cost of litigation, and punitive damages.
In the summer of 2013, Blough abruptly parted ways with the San Bernardino Public Employees Association, which represents and handles collective bargaining for over 11,000 employees working for San Bernardino County and 3,000 others working for 16 of the county’s cities – Barstow, Big Bear, Chino, Chino Hills, Colton, Fontana, Hesperia, Loma Linda, Montclair, Needles, Ontario, Rancho Cucamonga, Redlands, Rialto, San Bernardino, and Upland, as well as three cities in east Los Angeles County, Claremont, Pomona and West Covina, and Banning in Riverside County.
Publicly, that development remained shrouded in some degree of mystery for more than 14 months, though there were unconfirmed reports in the immediate aftermath of his departure that Blough was under investigation by the San Bernardino County District Attorney’s Office for some form of undisclosed wrongdoing.
On October 17, 2014, a civil action was filed against Blough in San Bernardino County Superior Court on behalf of the San Bernardino Public Employees Association (SBPEA) by attorneys Dennis Hayes and Michelle Hribar of the San Diego-based law firm of Hayes & Cunningham.
According to the lawsuit, “In 2013 SBPEA hired new auditors Ahern Adcock Devlin LLP. In June 2013, during its audit of SBPEA, Ahern Adcock Devlin discovered that there was a large disparity in the amount of SBPEA’s recorded cash receipts and the amount of deposits made to SBPEA’s bank account at Security Bank of California. The amount of SBPEA’s recorded cash receipts appeared to far exceed the amount of cash deposits that had been made.”
The lawsuit continues, “Ahern Adcock Devlin asked Blough to provide the keys to SBPEA’s safe, where presumably cash making up the difference between SBPEA’s cash receipts and cash deposits would be located. Blough reluctantly provided Ahern Adcock Devlin with the key to SBPEA’s safe. Upon review of the cash in SBPEA’s safe, Ahern Adcock Devlin found only approximately $40,000 in cash, which was far less than the amount of cash received by SBPEA that was not deposited in SBPEA’s bank account. SBPEA immediately placed Blough on administrative leave without pay and shortly thereafter, terminated Bough’s employment. SBPEA also terminated from employment Blough’s assistant, Jeannie Marquez.”
The association undertook a more extensive investigation of the matter after Blough had departed, according to the lawsuit.
“SBPEA then hired Ahern Adcock Devlin to perform an audit of SBPEA’s records for the time period from July 1, 2011 through June 30, 2013, in order to assist SBPEA with its investigation of Blough and Marquez,” the lawsuit states. “On October 1, 2014, Devlin provided the final results of its audit to SBPEA. Ahern Adcock Devlin’s audit revealed that between July 1, 2011 and June 30, 2013, a total of $595,444.82 in cash received by SBPEA was missing because it was never deposited into SBPEA’s bank account and was not in SBPEA’s safe. SBPEA is informed and believes and based thereon alleges that Blough misappropriated, converted, and embezzled cash in the amount of $595,444.82 from SBPEA.”
In addition, according to the lawsuit, there were other financial irregularities that occurred during Blough’s tenure as general manager.
“Ahern Adcock Devlin’s audit also revealed that during the time frame of July 1, 2011 through June 30, 2013, there were numerous charges on SBPEA’s credit cards, including those held in Blough’s name, which appeared to be personal-in-nature,” the suit states. “The purchases appearing to be personal-in-nature amount to $108,345.14. SBPEA is informed and believes and based thereon alleges that in addition to the $595,444.82 in cash, Blough also misappropriated, converted, and embezzled $109,345.14 of SBPEA’s funds by using SBPEA’s credit cards in order to pay for his own personal expenses.”
According to the suit, there were other questionable credit card expenses by Blough for storage units, tools, paper, grills and other supplies, which had no supporting documentation available.
According to the suit, “Blough intentionally concealed his misappropriation, conversion and embezzlement of funds from SBPEA’s executive committee and members. SBPEA is informed and believes and based thereon alleges that Blough falsified and altered SBPEA’s records in order to conceal his misappropriation, conversion, and embezzlement of funds from the SBPEA executive committee and members.”
The district attorney’s office, which has been said to be investigating the financial issues at the association for more than 16 months now and which was given a full copy of Ahern Adcock Devlin extensive forensic audit more than two months ago, has yet to file criminal charges against Blough or Marquez.
The lack of action on the part of the district attorney’s office is an indicator that adequate evidence to prove that Blough is in possession of the money he is alleged in the lawsuit to have embezzled has not been turned up. Another indicator is that Blough is representing himself in response to the lawsuit against him and has not retained counsel. According to the lawsuit and San Bernardino Public Employees Association President Ron Dunn, during Blough’s tenure as general manager “unaccounted for money” was “misappropriated by Mr. Blough.” Neither Dunn nor current SBPEA General Manager Deidre Rodriguez nor Hayes nor Hribar would comment on Blough’s present lack of financial resources.
In his November 20 response, Blough denied he misappropriated or embezzled funds from the San Bernardino Public Employees Association while he was employed there. Rather, he suggested the association had itself engaged in improper conduct and is now seeking to scapegoat him. The lawsuit, which seeks the return of the missing money and interest on it as well as attorney fees and punitive damages, is meritless, Blough maintains. The association has “unclean hands,” he asserted.
In tort law, the doctrine of unclean hands holds that one party in a lawsuit, either a plaintiff or defendant, cannot obtain a judgment against the other party, either a defendant or a plaintiff, if the other has also engaged in wrongful, illegal or unethical behavior.
Blough said the association was complicit in any action it had alleged against him and that it was equally responsible for any loss or disappearance of money in that it had failed to address any outstanding circumstance related to the disappearance of the funds and had not taken any timely action to “mitigate and lessen damages.”

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