By Mark Gutglueck
Ensen Mason’s unanticipated vanquishing of incumbent Oscar Valdez in the Auditor-Controller/Treasurer-Tax Collector race on Tuesday has cast a pall over the upper echelon of San Bernardino County’s governmental structure, as officials consider the prospect of a host of irregularities which have remained buried during Valdez’s two-year tenure in the four posts as well as during the last six years of his predecessor/mentor Larry Walker’s time in office coming to light. Coupled with a changeover in the district attorney’s office where Mike Ramos has held office for the last fifteen-and-a-half years, word is circulating that already shredders are being activated in a number of county divisions, and preparations have begun to purge scores of computer hard drives.
Eight years ago, county officials enmeshed in a tangle of bribery, kickback and graft schemes, some of which had been exposed and others of which remained hidden, collectively acted to buy the silence of the key county official best situated to serve as a watchdog over their function and activities. Larry Walker, who had served three terms as Fourth District County Supervisor before running successfully for auditor-controller-recorder in 1998, on occasion had used his position to second guess the decision-making processes of other county officials, including the board of supervisors and other elected governmental officers such as the sheriff and the treasurer, in the late 1990s and first decade of the Third Millennium, particularly in those circumstances when there appeared to be an indication that those individuals had breached their fiduciary duty or engaged in activity in which conflicts of interest had compromised or appeared to have compromised their allegiance to the county’s residents and taxpayers. In the 12-year span between 1999 and 2011, no fewer than 16 mid-level or top ranking county officials were indicted, charged or found guilty, including four county supervisors, a former county sheriff, the elected county treasurer, the county’s investment officer, an assistant district attorney, two of the county’s chief administrative officers, and the county assessor along with three of his senior staff members.
As 2010 dawned, it had become known that the FBI was investigating two other supervisors and yet another senior administrator not included among those referenced above. In an effort to stem the investigations and the prospect of further indictments, the board of supervisors, the county’s senior administrators and the county’s in-house stable of attorneys moved to buy Walker’s silence. Representing that ploy as a cost-cutting reorganization, they proposed and then quickly approved a consolidation involving four of the county’s elected offices.
The position of treasurer-tax collector was merged with that of the auditor-controller. The county recorder function was taken away from the auditor-controller and moved under the authority of the county assessor’s office. Simultaneously, the duties of the public administrator relating to the administering of decedents’ estates, which had until that time resided with the county treasurer-tax collector, were handed off to the sheriff, who seven years before had absorbed the function of the coroner.
In presenting the reorganization to the public, county officials emphasized it as one that would increase efficiency and reduce costs. Incidental to the change was that Walker, who was then being paid $202,500 in salary annually together with $99,500 in benefits to serve as auditor-controller/recorder, was provided with an  $82,000 pay hike to take on the treasure-tax collector’s role, zooming his total annual compensation to $384,000. As the board of supervisors was preparing to make the merger, former assessor Don Williamson and Ensen Mason, a certified public accountant, went on record as opposing the consolidation.

Ensen Mason

For Willliamson, Mason and many others, the realignment was a curious one, particularly that involving the auditor-controller and the treasurer-tax collector. A little more than a decade before, in 1999, San Bernardino County’s highest ranking staff member, then-Chief Administrative Officer James Hlawek, elected then-Treasurer Thomas O’Donnell, then-County Investment Officer Sol Levin and Hlawek’s predecessor as chief administrative officer, Harry Mays, were indicted along with others, all of whom in rapid succession agreed to plead guilty. Among the indictment’s charges were those relating to O’Donnell, Levin, Hlawek and Mays having engaged 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. In addition to having oversight and control of the funding for the county’s day-to-day, week-to-week, month-to-month and year-to-year operations, the treasurer and the investment officer, whom the treasurer appoints, oversee the county’s investment pool and handling of the county’s reserves, which total in the hundreds of millions of dollars.
In the June 2010 election, Ensen Mason challenged Walker in the first race in which the auditor, controller, treasurer and tax collector functions were combined. As a creature of the establishment, with the endorsements of practically every county politician and the financial backing of a coterie of deep-pocketed donors with an interest in staying on the good side of government and maintaining access to the decision-making elite, Walker used conventional electioneering techniques to command the political stage while Mason, lacking name recognition, was unable to wield a powerful enough megaphone to broadcast his case that the offices he was seeking had been compromised by the conflicts of authority the merger had wrought. Walker convincingly defeated Mason, 128,033 votes or 70.94 percent to 52,445 or 29.06 percent.
The following year, with Walker safely ensconced in the office, the San Bernardino County Grand Jury echoed the concerns that Williamson and Mason had raised before the merger and during the 2010 campaign. 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 the arrangement was particularly problematic in the aftermath of those offices being merged with that of the county treasurer.
According to the grand jury, the merger created a potential conflict and compromised the autonomy and objectivity of the county’s auditing function.
In the early years of his tenure as auditor-controller-recorder, Walker had made an occasional point of examining in some degree of detail or otherwise questioning the actions by, or circumstances with regard to, the decisions or activity of other county elected officials, including the board of supervisors. Two such efforts included the 1999 audit of the sheriff’s department’s contract for psychological services with a company owned by a woman, Nancy Bohl, who was cohabiting with the sheriff and would later become his wife, and the vigorous questioning of the board of supervisors’ vote in 2006 conferring a $102 million settlement of a lawsuit on the Colonies Partners and the immediate disbursement of a $22 million payment to that company within 24 hours of the vote. After the 2010 merger by which he was given authority over the entirety of the county’s financial proceedings and was enshrined, even more than he had been previously, as a member of the county establishment and provided with a pay increase that took his yearly compensation very close to the $400,000 mark, Walker lost any appetite he may have once had to second guess or challenge those who had promoted him, and he pointedly dispensed with any examination of the decision-making process of other county officials impinging on issues of public policy or public import.
Mason once again emerged to challenge Walker in 2014, raising anew the conflict issue, seeking to illustrate that anyone arrogant enough or greedy enough to seek to serve in the capacity of treasurer while simultaneously serving in the role of auditor of the treasury did not have the integrity, and could not be trusted, to hold either position. But as was the case before, Walker held the power of incumbency, was able to confidently point to a long track record of running the offices he headed, had the support of his governmental peers and colleagues and possessed more than adequate cash in his political war chest to conduct a countywide electoral campaign. This time he buried Mason, 107,620 votes, or 74.32 percent, to 37,183 votes or 25.68 percent.
In the run-up to the election, Walker, then 63, was queried as to whether he was indeed determined to serve out the full term he was then seeking. Walker provided the voters with an assurance that he would remain in place throughout the entirety of the four years from 2014 to the end of 2018. Less than two years later, however, Walker in early 2016 abruptly resigned, recommending to the board of supervisors that they designate his assistant, Oscar Valdez, as his replacement. The board received applications from 17 individuals for the post, determining that nine, including Valdez and Mason, met the minimum qualifications for the office. Five of those nine, including Valdez, were interviewed. The board, concerned that Mason might make an issue of the consolidation of the auditor-controller’s office with that of the treasurer-tax collector, chose not to interview him.

Oscar Valdez

Ultimately, the board complied with Walker’s recommendation and elevated Valdez to the auditor-controller/treasurer-tax-collector position. In accepting the appointment, Valdez went from earning $134,386.56 in salary, $23,220.14 in what was designated “other pay,” and $79,811.54 in benefits yearly for a total annual compensation package of $237,418.24 as assistant auditor-controller/treasurer-tax collector to a salary of $245,208.74, what was designated as “other pay” of $74,852.79, and $141,026.89 in benefits yearly for a total annual compensation of $461,088.42 as auditor-controller/treasurer-tax collector.
Valdez, upon being appointed, said he was “honored and humbled” for the opportunity the board of supervisors had bestowed upon him. “I am also grateful to you for you taking me into consideration and acknowledging and basically having the confidence in me to take this responsibility,” he said. “As the auditor controller treasurer tax collector I will make sure that this department is run with integrity, with independent judgment, also making sure we run this department with clear transparency and efficiency. I will dedicate myself to make sure that I run this office tirelessly to make sure that we run this department to meet the services of all the various county departments, all of the constituents, all of the various taxing agencies throughout the County of San Bernardino.”
Valdez seamlessly transitioned into the multi-pronged position. Like Walker before him, he was beholden to the board of supervisors that had elevated him to the prestigious posts. For the next two years he carried out the functions of the combined office, pointedly avoiding raising any issues as auditor-controller that in any way might be construed as criticism or scrutiny of the board of supervisors or of other high-ranking county officials, or which might embarrass them.
With the calendar’s advance from 2017 to 2018, the time for Valdez to claim the office in his own electoral right was upon him. Mason came forward to oppose him. History had demonstrated that Mason had waged his campaigns on a shoestring budget. In 2010, Mason had collected $3,625.28 in contributions throughout the entire campaign and spent $4,048.80, making up the difference by shelling out cash from his own pocket. By contrast, in 2010, Walker started out the year with $119,503 in his electioneering fund and spent $63,954 over the course of the campaign. In 2014, Walker, who had a substantial political campaign fund going into the election year, collected $103,505 during the first six months of the year and spent $37,476.08 in the closing months of the campaign to engage in electioneering and outdistance Mason, who conducted only a token effort to promote his candidacy.
Valdez, who was relatively inexperienced in political campaigning, nevertheless approached the 2018 race optimistically, given the substantial backing he had inherited by virtue of being Walker’s handpicked successor and the darling of the current political establishment, as well as Mason’s past poor performance in raising campaign money and consequently at the ballot box. Valdez started the year with a beginning cash balance of $15,441.35. Between January 1 and April 21, the final day of the mid-spring reporting period, he took in $97,675 in contributions. Between April 22 and May 19, he received another $23,682.
An examination of his campaign financing statements shows that Valdez is beholden in the extreme to the San Bernardino County political and governmental establishment. Under the county’s campaign finance limitation law, a candidate is confined to receiving no more than $4,400 from any single donor during any given election cycle. Valdez received the maximum of $4,400 from the Safety Employees Benefit Association, which is the collective bargaining unit for the county’s sheriff’s deputies; $4,400 from friends of San Bernardino County Sheriff John McMahon; $4,400 from a group called Ever Onwards; $4,400 from Supervisor Josie Gonzales; $4,400 from the San Bernardino County Public Attorneys Association, which is the collective bargaining unit for the prosecutors in the district attorney’s office and the lawyers in the public defender’s office; and $4,400 from ACH Mechanical Contractors. Valdez engaged in a crucial faux pas in accepting $4,400 from Supervisor James Ramos and another $4,400 from James Ramos’s household in the form of an identical $4,400 contribution from Ramos’s wife, Theresa Ramos. For those in the know, this had the appearance of Valdez laundering an illicit campaign contribution from a member of the board of supervisors. Immediately, the specter of the auditor/treasurer for the county having engaged in fund laundering settled over the campaign. That the money originated with a member of the board of supervisors exacerbated the perception that Valdez had put himself into a position of being unable to dispassionately carry out his function of serving as a watchdog over the county’s highest ranking officials, further adding to the impression that he was the establishment candidate looking to cover up current secrets and the wrongdoing of the past, worsened still when he received $1,000 from County Superintendent of Schools Ted Alejandre and $1,000 from Dennis Draeger, the former county assessor who was himself appointed to that position as the follow-on to one-time Supervisor and Assessor Bill Postmus, who imploded in scandal and was forced to resign in 2009.
In addition to the contributions he was receiving, Valdez made use of his position by converting a sizable portion of the money he was making as auditor-controller/treasurer-tax collector into campaign cash, loaning himself $49,268.92. On May 18, less than 24 hours shy of the May 19 reporting deadline which falls two weeks and three days before the day of the election, Valdez received $1,932 from the San Bernardino Public Employees Association, the union for the county’s rank and file, strengthening the case against him that he was being bought by the elements within the government whom he is supposed to be monitoring.
Through May 19, Valdez paid Chris Jones Consulting and Troast and Associates LLC, firms that were directing and managing his campaign, a combined total of $28,892.99. He provided Tony Siciliani another $5,872.90 for literature.
Also on the expenditure side, Valdez shelled out $13,387.00 to have his name included on the Cops Voter Guide slate mailer; another $9,244 to be endorsed on the California Latino Voters’ Guide; $6,660.10 for inclusion on the Families First Education Voter Guide; and $5,058.60 to be recommended on the California Republican Taxpayers Association’s slate mailer. He also spent $5,197.20 to have the Latino Family Voter Guide list him among its chosen candidates, and he laid out $8,000 to buy his way onto the Educate Your Vote mailer sent out to the county’s voters. Valdez also carried out an energetic signage campaign.
Based on the calculations and advice provided to him by Chris Jones and Troast and Associates, Valdez was led to believe the steps he had taken to propound his name and engage with the voters would ensure he would easily outdistance Mason in the footrace for votes on June 5.
Lulled into complacency by Mason’s lackluster electoral efforts in 2010 and 2014, Valdez and his team did not anticipate the far more substantial campaign Mason waged this year. The major difference was the funding that was used to infuse the candidacy this time around.
From January 1 through May 19, Mason received $135,224.13 in contributions, $102,886.10 of which came as a loan he made to himself through his own company, Mason Financial Services. Through May 19, Mason spent $119,324.73 parsimoniously but efficiently. None of his money went toward campaign consultants, as Mason essentially acted as his own campaign manager. He invested $5,377.00 on the Democratic Voters Choice slate mailer, another $3,819.50 to get on the Citizens For Good Government slate mailer, and $1,245.90 to appear on the Californians For Quality Education slate mailer. He dropped $6,850.00 on a slate mailer from Landslide Communications, paid $3,075 for inclusion on a slate mailer from the Continuing the Republican Revolution outfit, expended $9,246.00 to get an endorsement in the Budget Watchdogs Newsletter and ventured $4,611.30 with the California Taxpayer Voter Guide publication. Another $4,265 outlay put him on a slate mailer called the Conservative Voter Guide; $7.100 berthed him in the simply-named Voter Newsletter; $6,074 won him an endorsement from Election Digest; for $5,667 the Cal Sal Voter Guide recommended him to those who received it; and $4,231 purchased him the California Voter Guide’s seal of approval. Mason also threw $1,000 into Facebook advertising.
After the voters went to the polls on Tuesday and those votes along with the early-arriving mail-in ballots had been tallied at the registrar of voters’ office, it appeared the third time had proven a charm for Mason. As of the vote count at midnight, four hours after the closing of the polls and with 840 of the county’s 1,856 precincts reporting, Mason had 62,190 votes, or 51.07 percent, to Valdez’s 59,577 votes, or 48.93 percent. At 2 a.m. on June 6, with all 1,856 precincts having reported, Mason had widened that lead to 79,747 votes, or 51.26 percent, to Valdez’s 75,841 votes, or 48.74 percent. As of today at 4 p.m., with the count of validated provisional votes as well as late-arriving mail-in ballots yet ongoing, the trend in favor of Mason was increasing and the unofficial results of the race stood with Mason having logged 98,295 votes, or 51.57 percent, to Valdez’s 92,309 votes, or 48.43 percent. At this point, between 57,000 and 58,000 yet uncounted ballots of all sorts, including late-arriving mail-ins, provisional votes cast at polling places and duplicate ballots from the polling places need to be verified and counted, representing, mathematically and theoretically, more than enough potential votes in Valdez’s favor to change the outcome. Nevertheless, given the pattern so far and the circumstances, the prospect that Valdez will pull ahead is remote and it appears that Mason will be declared the victor when the final official certification of the vote is to be made by the registrar of voters’ office no later than July 5.
Word reached the Sentinel on Wednesday that efforts were already under way within the auditor-controller/treasurer-tax collector’s office to shred documents and purge computer files, including erasing certain hard drives. Efforts to reach Cynthia Presche, the deputy chief auditor-controller in charge of the auditor division’s information technology department, were unsuccessful. On Friday, the Sentinel was informed that Presche was on leave this week and will not return until Monday. The Sentinel then sought to speak with Presche’s top assistant, Don Lee, who was not available. A phone message for Lee was left in which questions were posed to him about the reports of data being erased, the office’s policy and specific protocol for the retention of the department’s information and data, the ease with which that data can be purged, as well as whether the department maintains off-site generational back up of that data which will allow all data entered into the department’s systems to be recovered, even if it is purged or changed, so that an analyst can return to any point in the registry of the data to reproduce and recover data in the order, or reverse order, in which it had been entered. Lee had not returned the call by press time.
On Thursday, Mason spoke with the Sentinel. An immediate topic of discussion was whether Mason will stand by his long-held and repeated past assertions that the merging of the treasurer’s function with that of the auditor-controller was ill-conceived and represented an inherent conflict-of-interest by which the mismanagement of the county’s assets could take place, such that giving one person ultimate authority over those overlapping functions was a practical invitation for the misuse of public money, and that such an arrangement within a public organization is unacceptable, particularly in one as large as the County of San Bernardino where hundreds of millions of dollars are involved.
Separating the office of treasurer from that of auditor, Mason said, “is a good idea. Certainly, from the outside, it appears that way. In the world of the private sector, analysts and bankers and investors work in separate roles. In the private sector, conflicts like that would not be tolerated.”
Mason said that in any event once he is in office overseeing the function of all four divisions, “There is going to be a functional separation and there is going to be a physical separation. You can’t have the people in the auditor’s office working side-by-side or even in the same building as those in the treasurer’s office. That takes away their objectivity. They can’t be buddies who are going to lunch together. As soon as that occurs, when the audits come in, everything is going to be coming up peaches.”
Mason noted that he has always been, and remains, an outsider with regard to the county auditor-controller/treasurer-tax collector’s office. Though that will change, he said, he is not in a position at present to say exactly what changes he will institute because he is not fully knowledgeable about what the current polices and protocols are.
“There are so many steps that I think should be taken,” he said, “but I need to learn how things are being done, and see what procedures are there and see if they can be approved.”
Mason said he hoped that at some point over the next six months Valdez will bring him in to allow him to familiarize himself with all of the departments and operations. “But that’s up to him,” Mason said. “There are many steps that need to be taken, but I’m not in office until January.”
To the observation that he will soon transition from being the perennial outsider to the consummate insider and a member of the establishment who may then grow averse to challenging and grilling his fellow establishment insiders and will simultaneously shy away, as did Walker and is Valdez, from fully exercising the authority of his office and holding other elements of the governmental structure accountable, Mason pointed out that he had earned his way into office through a hard-fought election and not by appointment.
“When you are appointed you owe whoever appointed you, who gave you the opportunity,” Mason said. “That’s not what happened with me.”