Rialto Mayor’s Nepotistic Circumstance Triggers Deeper Audit & Investigation

By Mark Gutglueck
In what appears to be the steepest and most serious challenge in her seemingly charmed 18-year political career, Rialto Mayor Deborah Robertson over the next month-and-a-half is to be subjected to the double gauntlet of an audit completion and an investigation with criminal implications in which her action as an elected official is under focus.
It was the draft findings of a review of the city’s finances carried out by the certified public accounting firm of Riverside-based Teaman, Ramirez and Smith, Inc. as a preliminary part of that audit which was delivered to the city in December that alerted city officials of nepotism involving Robertson and her daughter which under federal law may qualify as a criminal conflict-of-interest. The finalized version of that audit is to be presented to the city council for public review and acceptance on April 28.
Though the document in question did not specifically name Robertson, it made a pointed enough reference to the circumstances touching upon the city’s pass-through of federal Community Development Block Grants and the provision of operational quarters to a non-profit entity headed by Robertson’s daughter. The subsidies provided to that nonprofit through action in which the mayor participated total somewhere in the neighborhood of or exceed a quarter of a million dollars. It does not appear that Mayor Robertson recused herself from approving, as a voting member of the city council, that arrangement or that she made adequate disclosure that the recipient of the federal funds and what has been tantamount to free rental space was her blood relative.
On September 24, 2019, the Rialto City Council voted to retain Teaman, Ramirez and Smith, Inc. to carry out an audit process, otherwise referred to as “independent audit services” to augment Rialto’s “2018-19 Audit and Comprehensive Annual Financial Report.”
The work to be performed by Teaman, Ramirez and Smith, Inc. beginning in September was covered under the previous contract the city had with the firm for it to complete independent auditing services. According to a letter of engagement dated September 16, 2019 and signed by one of the firm’s certified public accountants, Joshua Calhoun, the areas of review to be covered by Teaman, Ramirez and Smith, Inc. were issues relating to the city’s provision of post employment benefits and pensions to former employees and the impact those are having on the city’s financial situation, budgetary comparison schedules, the city’s financial statements, the combining of the city’s financial statements, municipal financial statistics and the “schedule of expenditures of federal awards.” In a side letter also dated September 24, 2019 and signed by Calhoun which related to the work that Teaman, Ramirez and Smith, Inc. was to perform beginning in September, it is stated, “An agreed upon procedures engagement is not designed to detect instances of fraud or noncompliance with laws or regulations; however, we will communicate to you any known and suspected fraud and noncompliance with laws or regulations affecting the city’s appropriations limit documents that come to our attention.”
Indeed, that is precisely what appears to have occurred.
Buried in the reams of financial documents Teaman, Ramirez and Smith, Inc. auditors pored over is documentation that the Bethune Center-National Council of Negro Women was provided with $38,475 in federal Community Development Block Grants that were doled out at the discretion of the Rialto City Council in the 2018-19 fiscal year.
Community Development Block Grants are a U.S. Department of Housing and Urban Development program in which federal money is provided to local communities, primarily cities, which can then utilize those funds as their political leadership deems fit insofar as they are applied toward the goals of providing affordable housing, anti-poverty programs, and infrastructure development. Community Development Block Grants are subject to less federal oversight than categorical grants. They are dispensed to projects and programs conducted locally at the direction of local authorities, which in the case of a city, is the city council. They are nevertheless subject to the provisions of federal law.
Milele Robertson, Mayor Robertson’s daughter, is the president of the Bethune Center-National Council of Negro Women, which offers what is described as job training services. Though the Bethune Center-National Council of Negro Women was formerly identified as being headquartered at 649 E. Foothill Boulevard in Rialto, it has been operating out of a city-owned building at 141 S. Riverside Avenue in Rialto for at least four years, having done so free of charge for that entire time.
Teaman, Ramirez and Smith, Inc.’s accountants delineated the federal grant funding received by the Bethune Center-National Council of Negro Women, and traced out the blood relationship between Deborah Robertson and Milele Robertson. In its draft finding, which upon further refinement will go into the 2018-19 Audit and Comprehensive Annual Financial Report, Teaman, Ramirez and Smith, Inc. referenced a member of the city council who had participated in providing the Community Development Block Grant funding to the Bethune Center-National Council of Negro Women without directly identifying the mayor, though the reference, by inference, is clear. “The member of the city’s governing body did not properly disclose or report the family relationship nor abstain from the selection and award of the agreement,” according to the language in the preliminary finding.
The matter lay dormant for several weeks, while the report Teaman, Ramirez and Smith, Inc. had generated to encapsulate the independent audit service it had undertaken between September and December to augment Rialto’s 2018-19 Audit and Comprehensive Annual Financial Report was being assimilated by city administrators, in particular Finance Director Jessica Brown.
Further examination of the circumstance revealed that since 2012, the year that Robertson became mayor, the Bethune Center-National Council of Negro Women had received over $200,000 in Community Development Block Grants distributed by the Rialto City Council.
January 22, the city council adopted a resolution with little comment amending the city’s previous conflict of interest code.
On February 11, at its regularly scheduled city council meeting, the council was scheduled to discuss nine items during the closed session prior to the public portion of the meeting, consisting of eight matters of existing litigation and one item pertaining to negotiations relating to the sale or purchase of property.  Before adjourning into that closed session, however, City Attorney Fred Galante said that there were three items that needed to be added to the closed session discussion agenda, consisting of a claim against the city for damages, another matter involving existing litigation and one more item from which, Galante intimated, the mayor would need to abstain. After the council’s closed session discussions were concluded, Galante reported that with regard to the item the mayor was barred from discussing or voting upon, she had abstained and left the room. Thereupon, after the completion of the council’s consideration of the matter, upon a motion by Councilman Ed Scott and seconded by Councilman Andy Carrizales and carried on a 4-to-0 vote, the council authorized City Manager Rod Foster to execute an agreement with Teaman, Ramirez and Smith to perform a so-called agreed-upon-procedures audit, assist in providing the management response to the city audit and review the city’s Community Development Block Grants, Proposition 47 funding and  Homeless Emergency Aid Program grants, at a cost of  $175 per hour for an approximate total cost of $40,000. The city council further authorized, as part of that motion, for Foster to retain the Los Angeles-based law firm of Manatt Phelps to review and analyze any potential conflict issues as pertain to the mayor. The motion also contained a provision that Foster reassign the responsibility for the administration of the city’s Community Development Block Grants, Proposition 47 funding and Homeless Emergency Aid Program grants to the deputy city manager and finance director in conjunction with the police department, removing those programs’ oversight from Community Services Director Perry Brents.
The development puts Robertson’s previously promising political career in jeopardy.
Robertson grew up in San Diego, graduating from Lincoln High School and then obtaining a bachelor’s degree in urban studies from the University of California at San Diego. Subsequently, she earned a master of public administration degree from the City University of New York – College of Staten Island, and was a National Urban Fellowship recipient at Baruch College.
She worked in the administrative division of the California Department of Transportation, known by its acronym, CalTrans, for more than two decades.
First elected to the Rialto City Council in her maiden foray into politics in 2002, Robertson was reelected in 2006. Then in 2008, she challenged Rialto’s sitting mayor, Grace Vargas, suffering the lone defeat in her political career, as Vargas’s power of incumbency tided her to victory with 12,355 votes or 54.55 percent to Robertson’s 10,296 votes or 45.45 percent. Two years later, neither Robertson nor her council colleague, Joseph Baca, Jr., had to stand for reelection, as no one deigned to run against them. In 2012, with Robertson again intent on challenging Vargas, and Robertson’s popularity surging among the Rialto electorate, Vargas chose to not seek reelection. Instead, Robertson found herself in a contest against longtime Rialto political figure and council member Ed Scott. When the dust cleared after the election, Robertson had cruised to victory by a comfortable margin, 12,013 votes or 57.21 percent to Scott’s 8,985 votes or 42.79 percent.  In her 2016 mayoral re-elective effort, Robertson faced a single challenger, Councilman Ed Palmer. She handily won that contest, 14,784 votes or 59.79 percent to Palmer’s 9,950 votes or 40.23 percent.
As a member of the council and as mayor, Robertson parlayed her professional expertise with the California Department of Transportation to take up leadership positions on regional governmental joint powers authorities relating to urban planning and transportation, such as Southern California Associated Governments and San Bernardino County’s transportation agency, formerly known as San Bernardino Associated Governments and now known simply as the San Bernardino Transportation Agency. In her time as mayor, Robertson has become a virtual kingmaker in blue collar and heavily Democratic Rialto, with her endorsement carrying substantial weight among the electorate. Her most notable recent achievement in this regard was her sponsorship, support and successful coaching last year of political newcomer Channing Hawkins, who was elected to the board of the West Valley Water District in November in his first attempt at public office, whereupon he was named, less than an hour after he was sworn in as a board member, as the board’s president. Previous word was that Hawkins was being groomed for a run for the city council later this year to be followed by his advancement to the mayor’s post upon Robertson’s vacation of that spot for higher office such as Assembly or Congress.
The nepotism investigation now ongoing dampens considerably Robertson’s political prospects. She is due to seek reelection as mayor in November, and were she to relinquish that position, either voluntarily or by means of a challenge, her viability in moving on to other political positions would be greatly compromised.
Under California law pertaining to public officeholder conflict of interest, assisting or promoting a family member by participating in a vote on a contract involving that family member, providing that family member with employment with the public agency the politician heads or approving a project the politician’s family member has an interest in is not illegal unless it can be demonstrated that the politician and the family member have financial interests in common. While it is generally considered illegal for a politician to vote with regard to any issue benefiting a spouse since it is assumed their financial interests are one and the same, a similar vote impacting a child, parent or sibling is not necessarily illegal. Federal law, however, is far more strict with regard to nepotistic situations. That the Bethune Center-National Council of Negro Women received federal funding in the form of Community Development Block Grants puts Robertson, at least potentially, within the crosshairs of the U.S. Attorney’s Office. Moreover, the City of Rialto’s conflict-of-interest ordinance prohibits the city’s elected officials and employees from participating in voting on contracts or presenting contracts or arranging for the purchase of goods or services from anyone to whom they are related by either marriage or blood. It is unclear what penalty or penalties can be applied for such a violation.

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