Two years after Oscar Valdez was appointed by the San Bernardino County Board of Supervisors to serve out the remaining two years on Larry Walker’s term as the county treasurer-tax collector/auditor-controller, he is now standing for reelection in an effort to remain in the position another four years.
Seeking to prevent Valdez from laying claim to the office in his own electoral right is Ensen Mason, who twice challenged Walker for the office, in 2010 and 2014. To Mason, Valdez’s hold on the office represents a continuation of the county’s financial, investment and oversight policies that have prevailed for the last 20 years, when Walker was first elected to the combined officers of recorder/auditor-controller in 1998, and with which Mason has significant differences. Twelve years after Walker became auditor-controller-recorder, the county engaged in a reorganization involving four of its elected offices. It eliminated the treasurer-tax collector position as one that stood alone and merged it with that of the auditor-controller. It moved the county recorder function to the county assessor’s office. Simultaneously, it had the public administrator function relating to the administering of decedents’ estates, which had until that time resided with the county treasurer-tax collector, handed off to the sheriff, who seven years before had absorbed the function of the coroner.
At that time, Mason went on the record as opposing the merging of the treasurer and auditor functions. The following year, the San Bernardino County Grand Jury echoed Mason’s concerns in this regard. In its 2010-2011 report, the grand jury stated, “It is notable that the grand jury found no county where as many important positions are held concurrently by one person as is the case with the San Bernardino County auditor-controller/treasurer/tax collector and county clerk. While the combination of offices is allowable under Government Code §24300, the grand jury finds, in practice, in San Bernardino County the controller’s office, not the auditor’s office, does the risk assessment that determines which departments are to be audited. This chain of authority may not have been anticipated when the consolidation was deemed to be beneficial to the county. San Bernardino County is not out of the norm in combining the controller/auditor function. However, we are not the first grand jury to point out the inherent problems in this and to recommend a separation of the auditor’s function from the controller’s function.” The grand jury said that was particularly the case in the aftermath of those offices being were merged with that of the county treasurer.
According to the grand jury, the merger created a potential conflict and potentially tainted the autonomy and objectivity of the county’s audit function.
The same year that Walker was first elected auditor-controller, 1998, succeeding Errol Mackzum in the post, the FBI was delving into the dealings of more than a half dozen county officials – including San Bernardino County’s highest ranking staff member, Chief Administrative Officer James Hlawek; elected Treasurer Thomas O’Donnell, and the county’s Investment Officer Sol Levin – who were suspected of taking bribes from individuals and corporations doing business with the county. In 1999, Hlawek, O’Donnell and Levin were indicted along with others, all of whom in rapid succession agreed to plead guilty. The indictment revealed that O’Donnell, Levin, Hlawek and Hlawek’s predecessor as top county administrator, Harry Mays, had involved themselves in a series of kickback schemes. In one, in exchange for bribes and all expenses paid excursions to Costa Rica, Greece, France and Florida, from 1992 until 1998 Mays, Hlawek, O’Donnell and Levin provided Salomon Smith Barney and the New England Adjustable Rate Government Fund with contracts to invest more than $7.5 billion in public funds in financial instruments from which money was creatively spun off to brokers, resulting in an estimated loss or diversion of at least $20 million in taxpayer money over that six-year period.
The 2010 merger of the treasurer/tax collector’s office with that of the auditor-controller eliminated a crucial layer of independent scrutiny of the county treasurer’s function.
Eight years after the merger occurred, Mason still insists the conflict-of-interest the combining of those offices and functions represents is as critical as ever and will not simply go away. He said Valdez’s tolerance for that conflict of interest is an indicator of his unsuitability in the auditor-controller/treasurer/tax collector’s post.
“This campaign is the culmination of a decade of research, and explaining to the public how the financial planning and services businesses of San Bernardino County should be structured,” Mason told the Sentinel. “I’m a 30-year certified public accountant who has represented over 10,000 individual taxpayers as their advocate before overreaching government agencies, from the Internal Revenue Service to local county departments. I am also an enrolled agent, a certified financial analyst and I have an MBA in finance as well as securities and insurance licenses. I am the only candidate who holds any of these qualifications.”
Mason said, “The only qualification appointed incumbent Oscar Valdez holds is the ‘catchall’ – if you’ve been given the job, you can run to keep it. I’m the only truly qualified candidate. I’m also the only independent candidate. I’ll represent the voters who elected me and only them. There’s an old saying in politics regarding influence buying: ‘Follow the Money.’ I encourage you to do so in this race. You will see that I have financed my own campaign – only my conscience and principles are guiding me. Oscar Valdez, the appointed incumbent, was hand-picked for this job by county insiders just two years ago, and they are investing heavily in his campaign now. Look for yourself – county supervisors, the assessor, big businesses doing business with the county – his financial report is a who’s who of insiders with financial connections and big hopes.”
Valdez is tied to the establishment and its conflict-of-interest-laden way of doing business, Mason said.
“I ran unsuccessfully against Oscar’s old boss Larry Walker for this job in 2010 and 2014 to talk about financial mismanagement issues,” Mason said. “Oscar was loyal to Larry back then, and was rewarded with the top job when Larry suddenly decided to step down mid-term in 2016. One of my major concerns has always been adding the auditor-controller function to the treasurer/tax collector. I spoke out against the conflict of interest with the auditor examining the treasurer operations and then both reporting to the same person. My concerns were overridden at the board of supervisors level, and we will never know how much impact the $75,000 increase to Walker’s base pay had on the decision.”
Mason said that Valdez has now inherited the salary enhancement that was conferred upon Walker as a consequence of the 2010 merger. The money he is personally reaping in this way, Mason said, has blinded Valdez, just as it blinded Walker, to the fuller implication of the arrangement in which he is serving in the role of watchdog, as auditor, of his function as treasurer. This extends to the looming pension crisis hanging over the county, in which the ever greater cost of paying retirees in their golden years while they are no longer working is on a trajectory to bankrupt the county. Since a higher salary means an individual will draw a higher pension upon retirement, and because Walker and Valdez are both beneficiaries of that broken system, Mason said, neither was or is motivated to fix it, though that was and is their duty as the county’s treasurer and controller.
“We do know that Walker’s sidekick and career bureaucrat Valdez gets that extra money today,” Mason said. “And we know the first thing I’m doing if I get elected auditor-controller/treasurer/tax collector is calling for an outside panel of financial experts to provide options on how our county gets the best financial management at the lowest costs – and pension consequences be damned! I’ve never had a government pension and don’t want one. The costs are unsustainable and bourn on the backs of private citizens.”
Mason said it appeared that Valdez was appointed to keep financial issues threatening the county’s solvency buried.
“So, while we’re asking questions, why did Larry Walker retire in mid-term anyway?” Mason asked. “He ran for another four year term in 2014, and then orchestrated a mid-term handoff to his handpicked chief auditor. Almost looks planned doesn’t it? But planned with whom? The people that would have to rubber stamp it, right? That would be the board of supervisors. Last year they replaced appointed County CEO Greg Devereaux with Chief Financial Officer Gary McBride after a thorough nationwide search. OK. They also replaced longtime appointed County Counsel Rene Basle with Chief Deputy County Counsel Michelle Blakemore after a thorough nationwide search. Fair enough. But when they replaced the suddenly ‘retired’ elected official Auditor-Controller/Treasurer/Tax Collector Larry Walker with Chief Auditor Oscar Valdez two years ago, there was no nationwide search. They rammed through a quickie internal ‘search’ and swiftly came to the prearranged conclusion – Larry’s mini me, Oscar! Then they shoved it through a quick board vote with no debate and the swamp claimed another Frankenstein-like creation. It was a shell game. What kind of leadership was that? No national search, no widespread publicity, no special election to give voters a chance to pick – just a quickie political hit-and-run. ‘Move along people, nothing to see here. We’ve got it all covered up nice and neat. Run along now!’ I think it’s time to drain the swamp!”
Mason said the voters should take note that Valdez sought to unravel his electoral bid through a court challenge and failed.
“Oscar was so afraid of my unprogrammed candidacy that he challenged my ballot designation of taxpayer advocate/CPA in San Bernardino Superior Court. After weeks of legal maneuvering and my lengthy testimony before Judge David Cohn, I was completely vindicated, My ballot designation of taxpayer advocate/CPA is officially court-authorized and Oscar was ordered to pay costs for his frivolous attempt to mislead the public.”
Mason gave a final pitch to the voters. “I am endorsed by the Howard Jarvis Taxpayers Association and taxpayers across the county. I support Proposition 13 and stand for thoroughly auditing every county department.”