SBC Pension Fund Takes A Huge Hit With Argentine Default On Bonds

An indication that $14 million the San Bernardino County Employees’ Retirement Association has invested in an Argentine province’s government bonds and a significant portion of $555.8 million in the association’s $12 billion pension fund entrusted to a financial advisor is in jeopardy came this week when two lawsuits were filed in a federal court in New York.
That investment advisor, GoldenTree Asset Management LP, and the county’s retirement association on Tuesday filed parallel legal actions against the Province of Buenos Aires, which has skipped out on its debt service relating to bonds that province issued in which the county retirement fund is heavily invested.
The San Bernardino County Employees’ Retirement Association, known by its acronym SBCERA, manages the monetary pool that provides the pensions for retired San Bernardino County employees, as well as for the retirees from 15 other public agencies, including the Barstow Fire Protection District, the Big Bear Fire Authority, the California Electronic Recording Transaction Network Authority, the California State Association of Counties, the City of Big Bear Lake, the City of Chino Hills, the Crestline Sanitation District, the Department of Water & Power of the City of Big Bear Lake, the Hesperia Recreation and Park District, the Law Library for San Bernardino County, the San Bernardino County Local Agency Formation Commission, the Mojave Desert Air Quality Management District, the San Bernardino County Transportation Authority, the South Coast Air Quality Management District, the Superior Court of California, as well as the staff for the San Bernardino County Employees’ Retirement Association itself.
SBCERA and those associated with it have long touted it as one that is more competently managed and which achieves greater investment returns than the pension system for the State of California and an overwhelming number of the municipal and county governmental entities in the state, the California Public Employees Retirement System.
The San Bernardino County Employees’ Retirement Association employs more than 30 different investment advisors to which it entrusts its assets for investment. The seventh largest of those advisors, in terms of the volume of the investment capital being overseen, is GoldenTree Asset Management LP, which has been entrusted with overseeing the investment of $555,827,084 of SBCERA’s investment capital, representing 4.64 of the association’s portfolio. GoldenTree Asset Management LP is a credit-focused independent asset manager and hedge fund which manages over $40 billion for institutional investors including leading public and corporate pensions, endowments, foundations, insurance companies and sovereign wealth funds. On the hedge fund side, GoldenTree at present directs the management of $28,036,837,532 in investments for 99 clients primarily in the private sector.
GoldenTree exists in a multitude of sub-entities, which include GoldenTree Co-Invest Master Fund II Ltd.; GoldenTree Co-Invest Distressed Master Fund III Ltd.; GoldenTree Co-Invest Distressed Onshore Master Fund III Ltd.; GoldenTree Emerging Markets Master Fund ICAV; Goldentree Insurance Fund Series Interests of SALI Multi-Series Fund, LLP; GoldenTree Master Fund, Ltd; GoldenTree Sector-C LP; GoldenTree NJ Distressed Fund 2015 LP; and GoldenTree V1 Master Fund, LP.
Argentina is the third richest country in South America in terms of gross domestic product per capita. The Province of Buenos Aires is one of 24 provinces in Argentina. At 118,754 square miles and with 17,196,396 inhabitants as of 2018, the Province of Buenos Aires is the largest of the country’s provinces geographically and in terms of population. While it surrounds the City of Buenos Aires, it is separate from that metropolitan entity, which exists as a smaller province in its own right. The Province of Buenos Aires’s economy has long been and remains the largest in Argentina, with a per capita income exceeding $28,000 per year. The Province of Buenos Aires is Argentina’s chief exporter, having generated nearly $107 billion in exports in 2016, 37 percent of the nation’s total. The province’s economy is well-diversified. The province is renowned around the world for its agricultural productivity. Argentina is the world’s sixth largest source of beef, and the Province of Buenos Aires is responsible for the lion’s share of the country’s production of that commodity, and it is also Argentina’s top producer of mutton, pork, and poultry. It is likewise the center of the country’s dairy industry. A variety of crops are grown in the province, with the most important being corn, wheat and soybeans, as well as those grown for oil seeds, such as sunflower and flax. In recent years, the region has established itself as a producer of premium wines, which are the product of wineries that flourish in the south of the province. Manufacturing accounts for a fourth of the province’s economic output and is about 40 percent of that in the entire nation. The Province of Buenos Aires is an industrial powerhouse, involving the production of chemicals, pharmaceuticals, metallurgically-advanced materials, motor vehicles, machinery, textiles and processed foods.
In January 2006, the Province of Buenos Aires made the first of a series of six bond issuances, variously referred to as notes, indentures or global certificates, all of which were authenticated by the Bank of New York. The first issuance, denominated in U.S. dollars, had an annual interest rate of 4 percent, and matured on May 1, 2020, with the payment of the principal due to be made in semi-annual installments beginning in November 2017. The second issuance, denominated in Euros, had an annual interest rate of 4 percent, matured on May 1, 2020, with the payment of the principal due to be made in semi-annual installments beginning in November 2017. The third issuance, denominated in U.S. dollars, had an annual interest rate of 10.875 percent, matured on January 26, 2021, with the payment of the principal due in three installments, 33.33 percent on January 26, 2019, 33.33 percent on January 26, 2020 and 33.34 percent on January 26, 2021. The fourth issuance, denominated in U.S. dollars, has an annual interest rate of 9.625 percent, is to mature on April 18, 2028, with the payment of the principal due to be made in three annual installments of 33.33 percent on April 18, 2026, 33.33 percent on April 18, 2027 and 33.34 percent on April 18, 2028. The fifth issuance, denominated in U.S. dollars, has an annual interest rate of 4 percent, will fully mature on May 15, 2035, with the payment of the principal due to be made in semi-annual installments beginning in November 2020. The sixth issuance, denominated in Euros, has an annual interest rate of 4 percent, is to fully mature on May 15, 2035, with the payment of the principal due to be made in semi-annual installments beginning as of November 2020.
From 2003 until 2007, Néstor Carlos Kirchner Jr. was Argentine president. During Kirchner’s tenure, in January 2006, Argentina undertook a comprehensive restructuring of its foreign debt following the country’s 2001 default on $82 billion in sovereign bonds. Under that restructuring, Argentina committed to repaying 76 percent of the $82 billion – $62.32 billion – owed to the nation’s creditors. Néstor Kirchner was succeeded by his wife, Cristina Elisabet Fernández de Kirchner, who remained as president from 2007 until 2015. Both Kirchners were dogged by corruption scandals. Mauricio Macri succeeded Cristina de Kirchner as president, serving from 2015 until 2019. Alberto Ángel Fernández is the current Argentine president.
Deficit spending by the Kirchner, Kirchner, Macri and Fernández governments has created persistent economic challenges, including inflation and resultant devaluation of the Argentine Peso, which since May of last year dropped in value from 1.52 U.S. cents to its current 1.1 cents. In 2017, the Argentine economy slipped into a definable state of recession, and within a year of that, defaults among certain sectors of the Argentine financial sector began. The Argentine government and its banking system as a whole find themselves low on currency and gold, thus unable to stay current with debt payments. Having previously been bailed out by the International Monetary Fund (IMF), the government was adhering to a debt amortization schedule, but was unable to keep pace with that burden when its reserves were entirely depleted by late 2019.
In March 2020, with the advent of the coronavirus pandemic, the Argentine economy tanked entirely, and the nation’s economy contracted by 11 percent January though December 2020. In April 2020, across the board, Argentine companies and governmental entities ceased virtually all debt service payments, including those relating to the bonds issued by the Province of Buenos Aires. On May 22, 2020, Argentina defaulted on a $500 million interest payment due to its international creditors. In September 2020, Argentina, in a déjà vu scenario virtually indistinguishable from what had occurred following the 2001 default, began negotiations, overseen by the International Monetary Fund, for the restructuring of $66 billion of its debt. The IMF, which is itself owed $44 billion by Argentina, has cut Argentina off from international lenders, calling upon the country’s national leaders to develop an internal economic self-sufficiency model to structure the nation out of its financial doldrums through the reduction of inflation and the optimistic expectation that the Argentine economy can recover enough to achieve 4.5 percent growth in 2021.
Against this backdrop, GoldenTree Asset Management LP had been in quiet negotiations throughout much of last year and the first two months of this year with Buenos Aires Province over some order of a payment plan with regard to the delinquent bond debt servicing. By last week, the already tense relationship between the two parties had reached an impasse. On March 21, Buenos Aires Province publicly disclosed it would not be returning to those negotiating sessions. Within 24 hours, GoldenTree had made a public statement of its own, propounding through its public relations team of Steve Bruce and Mary Beth Grover, “While GoldenTree entered into the discussions with the province in good faith with the aim of achieving a consensual resolution, our hope that the province would pursue a realistic approach to the bond restructuring process was not realized. The amended restructuring terms provided to us by the province, which were published yesterday, do not come close to reflecting the current payment capacity and economic prospects of the province. This is not a case of a province that cannot pay a reasonable amount of debt service to its bondholders due to fiscal constraints, but rather of one which is simply unwilling to do so. The choice of the authorities to pursue this path is unacceptable and risks permanently impairing the province’s access to capital markets.”
The following day, GoldenTree in the form of its various funds, together with the San Bernardino County Employees’ Retirement Association; Beauregarde Holdings, LLP; MA Multi-Sector Opportunistic Fund, LP; Kapitalforeningen Industriens Pension Portfolio; Guadalupe Fund LLP; High Yield And Bank Loan Series Trust; FS Credit Income Fund; GN3 SIP Limited, Crown Managed Accounts SPC; Greylock Capital Management LLC; Pinehurst Partners LP; the Louisiana State Employees’ Retirement System; Amundi Funds, Caius Capital Master Fund; Corbin Erisa Opportunity Fund, LTD; and Amia Capital Master Macro Fund, Limited, represented by Attorney Glenn M. Kurtz of the international law firm White & Case, filed two lawsuits against the Province of Buenos Aires in United States District Court for the Southern District of New York.
The first complaint seeks judgment in favor of each plaintiff against the province in the aggregate amount of approximately $30 million plus interest and principal amounts that come due and are not paid after the date of the complaint, along with all legal and court costs. The second complaint seeks judgments in favor of the plaintiffs against the province in the aggregate amount of approximately $336 million as of the date of the complaint, the interest and principal amounts that come due and are not paid after the date of the complaint and all legal and court costs.
In reaction to the legal filings, Buenos Aires Province Minister of Finance Pablo López told Silvinal Kristal of the publication Ámbito Financiero on March 23, “First of all, it has to be said that these types of actions are the same as those we have already seen in other provinces, which in itself does not surprise us, and it is a mechanism of pressure that is often used. This judicial strategy does not favor the resolution of the problem.”
Vowing the province would not be pressured, López said Buenos Aires Province officials “remain open to dialog,” but only on terms that would achieve a resolution “without jeopardizing the fragile situation of the province.”
GoldenTree was proving, López said, “intransigent” in the discussions with regard to the Buenos Aires Province coming to terms with its arrearages “where they require us, for example, to commit ourselves to pay in the next four years 2 billion dollars, which is the equivalent the province’s public works activity for two years. To comply with what they are asking, we would have to stop doing capital improvement work for two years, and with doing work I mean repairing schools and hospitals, strengthening the health system, stopping making roads and houses throughout the province. Thus, it is not sustainable in terms of what it is possible for the province to pay, either in social terms or in terms of the province’s needs.”
López said the timing of the lawsuits was suspicious in that they were filed on the very day Argentine Finance Minister Martín Guzmán was meeting in Washington, D.C. with IMF Managing Director Kristalina Georgieva to reinitiate negotiations with regard to Argentina’s debt of nearly $45 billion to the International Monetary Fund.
There remains a lack of clarity with regard to how much, precisely, of San Bernardino County Employees’ Retirement Association’s investment funds remain in jeopardy because of the Buenos Aires Province’s default. At least $14 million directly originating with the county employees’ pension system is tied up in Buenos Aires Province coupons. SBCERA has also entrusted $555.8 million to GoldenTree and its various entities. GoldenTree has $786,656,568 invested in Buenos Aires Province, including $166,087,368 in 9.95 percent notes due in 2021; $90,571,200 in 5.375 percent notes due in 2023; $55,745,000 in 6.5 percent notes due in 2023; $180,184,000 in 9.125 percent notes due in 2024 and $294,069,000 in 7.875 percent notes due in 2027. Because of confidentiality policies, how much of that $786.65 million sunk into Province of Buenos Aires bonds by GoldenTree consists of investment money provided to GoldenTree by the San Bernardino County Employees’ Retirement System cannot be determined at present.
Olivia Applegate, the spokeswoman for the San Bernardino County Employees’ Retirement Association, suggested that although the two suits brought in the United States District Court for the Southern District of New York had gotten some attention, the Province of Buenos Aires giving SBCERA and its other creditors the runaround wasn’t all that big of thing in the overall scheme of things, given the scope of the funds the association is involved in investing and the timeframe during which returns on those investments play out.
“SBCERA is a long-term investor, with a globally diversified portfolio, and the fund has had a net annualized return of 8.9 percent since July 1982,” Applegate said. “SBCERA currently invests more than $12 billion in assets. Our position size with the Province of Buenos Aires is approximately $14 million, which is just over one-tenth of one percent of the total portfolio.”
Applegate said, “In April 2020, the Province of Buenos Aires stopped making scheduled payments on the notes in question, mentioned in a recent Wall Street Journal article. In response, GoldenTree Asset Management is using this action to enforce their and SBCERA’s rights as a creditor and as a driver for the next steps in the process.”
Applegate added that “GoldenTree named SBCERA as a plaintiff in this case in order to maximize value for the position as a fiduciary to the account.  Had SBCERA not been named as one of the plaintiffs alongside the creditor group, SBCERA could potentially be treated differently in a workout situation and might not be entitled to certain benefits that could arise out of a settlement of the suit.”


Illegal Aliens Given Higher Priority Over U.S. Citizens In Access To Vaccinations

By Richard Hernandez
Over 1.5 million San Bernardino County residents, the vast majority of whom are either native-born and naturalized U.S. citizens, have not yet been vaccinated against the COVID-19 contagion. Large numbers of those were turned away or refused access to the vaccine or subjected to a qualification process they were not able, or found too daunting, to navigate.
At the same time, illegal aliens throughout San Bernardino County and Southern California in significant numbers have been able to get inoculated against the coronavirus, defeating the sometimes haphazard, sometimes exactingly stringent process of gatekeeping around the provision of the antiserum.
In some quarters the denial of the vaccinations to American citizens has been dimly viewed, given that the effort toward mass inoculation is being subsidized by the federal government, and those unable to be included in the preventative strategy to ward off the potentially deadly disease thus far are taxpayers who have defrayed the cost of the program. Among activists advocating on behalf of illegal immigrants, however, the policy of prioritizing the provision of vaccine to the indigent non-taxpaying new arrivals into the country is being hailed as a sensible, tolerant and humane development, as well as a welcome adjustment of social attitudes that is rightfully reversing the sense of entitlement typical among average Americans.
American citizens have found themselves at a disadvantage when competing against illegal aliens when trying to achieve access to the COVID-19 vaccine in Southern California and San Bernardino County for four different reasons.
All Americans are required by law to have health insurance. Adult Americans who are in violation of the law are subject to a $695 tax penalty or 2 percent of their individual yearly income, whichever amount is more, for not having health insurance. Despite the consideration that the federal government is paying for the differing vaccines now becoming available, when seeking a coronavirus inoculation, an applicant for the vaccination must provide his or her name and his or her health plan/insurance card. If the applicant cannot show proof of health insurance or does not have a health plan, the applicant is denied access to the vaccine, and the medical professionals involved are required by law to report the individual to the federal government as being without medical coverage, risking their jobs if they do not do so. The medical professionals are not legally required to report illegal aliens or non-citizens who do not have medical insurance.
Statistics show that the mortality rates from COVID-19 exposure during the first nine months of the pandemic were higher among certain minority groups than the general population. For this reason, medical professionals are pursuing a policy of prioritizing the vaccination of minority groups, Hispanics and in particular economically challenged Latinos, over the general population.
The Los Angeles Coalition for Humane Immigrant Rights, known by its acronym CHIRLA, has taken up the cause of ensuring that illegal immigrants, while in the United States, have access to publicly available healthcare equal to that provided to American citizens. In recent weeks and days, CHIRLA has made an issue of circumstances where healthcare providers did not give equal priority to illegal aliens or non-citizens when it came to the coronavirus vaccine, as it is a publicly-funded program. “The Coalition for Humane Immigrant Rights considers access to healthcare a basic human right and fights for better healthcare that includes immigrants at the federal, state and local level,” CHIRLA states on its website.
Nearly a year ago, on April 28, 2020 the Mexican American Legal Defense and Education Fund filed suit in the case of Amador v. Mnuchin, taking up the circumstance involving sixteen individuals with undocumented spouses alleging violations of the First and Fifth Amendment within the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Those plaintiffs sought an injunction that would allow them to receive recovery payments and a declaration that the eligibility qualifications in the act were unconstitutional unless they were, as couples, provided with a tax credit of $2,400 for husband and wife rather than $1,200 for a single tax filer, as is provided under the CARES Act. The upshot of that legal action is that in its reaction to the coronavirus pandemic, the federal government had to treat citizens and non-citizens alike.
Matthew Barragan was formerly the staff attorney with the Mexican American Legal Defense and Education Fund. He is now an assistant United States attorney at the United States Attorney’s Office in Los Angeles.
Healthcare providers and entities distributing the coronavirus vaccine do not want to get crosswise of CHIRLA, the Mexican American Legal Defense and Education Fund, Barragan or the United States Attorney’s Office in Los Angeles by engaging in a policy whereby a case can be made that U.S. citizens were given priority over non-citizens in terms of access to the available supply of the COVID-19 vaccine in Southern California. Accordingly, out of an abundance of caution and to ward off lawsuits and any civil enforcement action by the United States Attorney’s Office in Los Angles or the U.S. Justice Department, local healthcare providers and distributors of the COVID-19 vaccine have relegated American citizens vis-à-vis noncitizens to a lower priority in terms of inoculating those in Southern California against the coronavirus.
Since the outset of the COVID-19 crisis, San Bernardino County has gone through two directors of its Department of Public Health, Trudy Raymundo and Corwin Porter. Efforts to obtain a statement from the county’s acting director of public health, Andrew Goldfrach, relating to the county’s greater priority on inoculating illegal immigrants than county citizens, were unsuccessful.

Victorville Council Likely To Remain At Four-Fifths Strength For 20 Months

Three weeks after a bare majority of the Victorville City Council removed Rita Ramirez from among its ranks, its remaining four members proved unable at a specially-called meeting this week to come to a consensus on how and with whom it would replace her.
The meeting, held on Tuesday, March 23, was the second meeting held for the specific purpose of filling the council gap.
Ramirez’s forced departure was predicated on the suspicion, and a prima facie case made by Councilwoman Elizabeth Becerra and City Attorney Andres de Bortnowski, that Ramirez is no longer living in the City of Victorville. Indeed, the predominant evidence presented at the March 2 regular city council meeting was that Ramirez has been absent from Victorville for some time.
In December 2019 Ramirez fell and severely bruised her left foot, an injury which lingered and grew gangrenous, necessitating her hospitalization. Over a several week period beginning in January 2020, while she was an in-patent at Kaiser Hospital in Fontana, her middle toe, then her foot, and eventually her lower leg were amputated. A recuperative period followed in which she remained at the hospital for more than two weeks. She was discharged, and returned to the Victorville residence she shared with Denise Wells, her appointee to the Victorville Planning Commission. Thereafter, Ramirez checked into a convalescent care home in Colton where she was to undergo further therapy and rehabilitation, and was to be outfitted with a prosthesis that would allow her to walk again. The COVID-19 pandemic interfered, however, as fifteen patients at the convalescent hospital tested positive for the coronavirus, and then one died. One of Ramirez’s sons insisted on removing her from that environment and took her to the family home that Ramirez and her ex-husband had constructed on Two Mile Road in Twentynine Palms in 1974 and at which they had raised their children. Ramirez, who was formerly both a professor and board member at Copper Mountain College in Joshua Tree, had lived in that home until 2013.
It was at the Twentynine Palms home where Ramirez had engaged in a prolonged recovery following her hospitalization last year. The City of Victorville, including the other members of the city council, the city’s top management and administration as well as lower ranking staff members, facilitated her in that recovery effort. City employees sojourned the roughly 92 miles to the Twentynine Palms residence and outfitted it with teleconferencing equipment that allowed her to participate in the council meetings.
When Wells on February 3 of this year resigned her position on the Victorville Planning Commission, vacated the residence at 16893 Glennaire Avenue she had shared with Ramirez and moved to Palmdale, allowing the lease on the residence to lapse at the end of that month, Mayor Deborah Jones and Councilwoman Becerra acted at once to effectuate Ramirez’s removal from the council. Jones endeavored to insulate herself from the initial call for Ramirez’s ouster, utilizing Becerra as a cat’s paw, such that the council’s consideration of Ramirez’s continuing eligibility to hold council office in Victorville was officially requested by Becerra.
There clearly existed at the very least grounds for exploring Ramirez’s removal, as she had not consistently resided in the city for over nine months at that point. Becerra at the March 2 meeting made the case against Ramirez, which included reliable information originating with city staff indicating that Ramirez was living in Twentynine Palms at the Two Mile Road residence, where city staff has been regularly routing to her via Fed Ex the printed agendas for the city council meetings and proof that, Becerra said, “staff has traveled to her Twentynine Palms home since April of 2020 to facilitate her participation in our city council meetings here in the city of Victorville.”
The most damning evidence that Becerra presented was that Ramirez, under her married name of “Rita Ramirez Dean” is the registered owner of house on Two Mile Road in Twentynine Palms, for which she had applied and received a homeowner’s exemption, given exclusively to owners who certify under oath that the property is being used as the applicant’s principal residence.
At the same meeting, City Attorney Andre de Bortnowsky, dispensed with any pretense of being a disinterested legal advisor advocating neither for or against Ramirez’s removal. Instead, cued at multiple junctures by Jones, Bortnowsky systematically sought to provide a justification for removing Ramirez from office, giving no countervailing rationale that might establish Ramirez’s right to remain in office. de Bortnowski joined with Becerra in making a case for her removal, marshaling evidence that city materials and agendas were sent to her domicile in Twentynine Palms over a period of at least nine months.
At the March 2 meeting, which was held by teleconference, Mayor Deborah Jones attempted unsuccessfully to mask her intention to have Ramirez removed from office, ostensibly representing the hearing on the matter to be an impartial fact-finding undertaking. Nevertheless, when Councilwoman Leslie Irving asked in the course of the hearing if Ramirez could show evidence to establish she had a residence in Victorville, Jones interrupted Irving, and then did not give Ramirez an opportunity to respond. When Councilwoman Blanca Gomez undertook to question de Bortnowsky about whether he had researched what legal basis Ramirez could assert toward a claim that she could legitimately remain in office in addition to his exploration of the grounds for her removal, Jones precluded any answer from being provided. After Gomez made reference to documentation relating to Ramirez having established a residence in Victorville, stating “You just never asked for it,” Jones, using her authority as mayor, directed City Clerk Charlene Robinson to shut off Gomez’s microphone.
In this way, what was otherwise a relatively convincing case that Ramirez merited removal from office was marred by Jones’ unwillingness to consider any evidence which conflicted with that supporting the councilwoman’s removal. That evidence which was alluded to in statements made by Gomez, Irving and Ramirez herself was never given a thorough or even cursory public examination, and was neither tested nor confirmed nor discredited. Even among a significant number of those who were convinced that Ramirez should have been removed from office and who supported the council in its action in doing so, there was a recognition that Jones’ ham-handed conducting of the proceedings had given the meeting the appearance of a set-up in which the outcome was foreordained. Ultimately on March 2, the council voted 3-to-2, with Jones, Becerra and Irving prevailing and Ramirez and Gomez dissenting, to remove Ramirez from office.
Ramirez’s expulsion was tainted by political and racial overtones. From the outset of the City of Victorville’s existence in September 1962 and the more than 58 years that followed, Republicans had enjoyed majority control of the city council. In November 2020, for the first time in Victorville history, the city’s voters had put in place a Democratic majority on the city council. James Cox, the city’s longtime city manager who had first been elected to the city council in 2012 and was reelected in 2016, was one of three Republicans on the panel last year, along with then-Mayor Gloria Garcia and Jones. Ramirez, who was first elected to the council in 2018, has long been active in the Democratic Party, and was a member of the San Bernardino County Democratic Central Committee, as was Councilwoman Gomez. Cox opted out of running for reelection last year. Garcia, who was first elected to the council the same year as Cox, in 2012, did seek reelection. She was defeated, finishing in ninth place among 22 candidates. Gomez, first elected in 2016, was returned to office, finishing in second place behind Becerra, a Republican. Running in third place was Irving, a Democrat and a member of the Democratic Central Committee. Thus, the two newly elected members – Becerra and Irving, a Republican and a Democrat – displaced Cox and Garcia, both Republicans. The net gain of one Democrat on the council swung the previous 3-to-2 Republican majority on the council to a 3-to-2 Democratic majority, an historic first in Victorville, the High Desert’s largest city population-wise.
There has been a recurrent suggestion that the move by Jones and Becerra to rid the council of Ramirez was a calculated one aimed at reversing the city’s political swing in favor of the Democrats. Fueling that speculation was that a falling out between Irving and the Democratic Party that occurred in February seemed to present Jones and Becerra with the leverage to put the GOP back into ascendancy in Victorville.
In January, Irving, already a local Democratic Party leader as a member of the San Bernardino County Democratic Central Committee, had vied to become a member of the California Democratic Central Committee representing the 33rd Assembly District. But her hopes in that regard had been thwarted when a solid block of Latinos within the San Bernardino County Democratic Central Committee had worked assiduously during the January campaign season while positions on the California Democratic Central Committee were being voted upon as part of a mail-in election to exclusively promote Hispanic candidates for the state party committee posts. That campaign had proven largely successful, and Irving was unable to garner the appointment to the California Democratic Central Committee she coveted as a consequence of the strong showing of Latino and Latina candidates in that polling, the results of which were announced in early February. In a snit, Irving tendered her resignation from the Democratic Central Committee to the county party chairwoman, Kristin Washington, stating in her resignation letter that she was doing so in protest of “racist acts” by members of the county Democratic Central Committee.
This circumstance presented an opportunity for Jones and Becerra. While Irving was still smarting over her failure to get onto the California Democratic Central Committee because of the Latino show of solidarity within the local party structure, they struck while the iron was hot, calling for the removal of Ramirez, a Latina of long standing within the San Bernardino County Democratic Central Committee. Irving went along with that move.
It was widely circulated that Jones and Becerra were militating to replace Ramirez on the city council with Ryan McEachron, who had served on the city council from 2008 until 2016, when he was defeated by Gomez, or with Eric Negrete, who had served on the city council from 2014 until 2018, when he had been defeated by Ramirez. Both McEachron and Negrete are Republicans. The rumor was that, banking on Irving’s newfound hostility toward the Democrats, she would prove amenable to elevating either McEachron, who ran in 2020 and finished in fourth place just behind her, or Negrete, who also ran for council last year and finished well off the pace in 14th place, to replace Ramirez. This would have restored a 3-to-2 Republican ruling majority on the council. It was said that Jones and Becerra were prepared to induce Irving to go along with that scenario by promising her an appointment to the mayor’s position, perhaps as early as next December. In Victorville, the mayor is not elected directly by the city’s voters, but instead chosen by the city council from among its members to that honorific.
If, in fact, Jones and Becerra did seek to broker such a deal with Irving, it did not take. On March 9, the city council held a specially-called meeting at which it was to consider its options for filling the council post, including making an appointment or holding an election.
On a vote to undertake preparations to make an appointment, the panel deadlocked 2-to-2, with Jones and Becerra in favor of doing so and Irving and Gomez opposed. When Irving and Gomez indicated their preference for holding an election to determine who should replace Ramirez, Jones and Becerra balked, citing the expense an election would entail.
This week, Jones and Becerra came back once more, gunning to convince one of their colleagues to consent to an appointment process, suggesting that the top three also-ran finishers, then the top five and then all of the candidates who ran for city council in 2020 but did not achieve election be considered. At one point, Gomez suggested that if an appointment were to be made, it should be done by the governor. Current Governor Gavin Newsom is a Democrat. That overture made no headway and was brushed over.
There was a repetition, essentially, of what occurred on March 9, with Jones and Becerra championing the concept of making an appointment, and Gomez and Irving favoring holding an election. Jones and Becerra could persuade neither Gomez nor Irving to come across to make an appointment. Similarly, when Gomez and Irving promoted the concept of an election, both Jones and Becerra objected to that option as being too expensive.
According to a staff report, holding a citywide special election would cost $847,654.
“I cannot see us spending around $800,000 for a special election,” Becerra said, especially considering that “The voters spoke three-and-a-half months ago.”
“I’m in favor of special election,” Irving said. “I feel that there is no cost for democracy. In the manner in which we ousted Councilperson Ramirez, I think that the people elected her, and I think that the people should elect her replacement. I feel that this does have an air of or appearance of voter suppression.”
Alluding to the consideration that the $847,654 estimate for the cost of a special election in 124,000-population Victorville was extrapolated from the $700,000 cost of a special election involving polling during a special election at 66 precincts in 103,000-population Rialto, Irving said such information is “outdated” and likely inflated given that an election in the post COVID-19 world could be conducted by mail ballots at a fraction of the cost.
Irving’s reasoning did not sway Jones or Becerra.
After two meetings where no consensus could be reached, it does not seem likely that the council will meet the April 30 deadline by which an appointment has to be made or an election set under the Government Code. Missing the deadline, according to City Attorney Andres de Bortnowsky, means the city council will remain at four-fifths strength until after the November 2022 election, when the term to which Ramirez was elected in 2018 is set to expire.
-Mark Gutglueck

WVWD Pays Scandal-Plagued Manager $450,000 To Leave

Clarence Mansell, the embattled top administrator of the scandal-plagued West Valley Water District, has departed on belatedly-revealed terms that are immersing the district in even further controversy.
Mansell, who was employed by the district for two years and four months, six months of which he was on paid leave following ten months during which he was a virtual recluse in his district office isolated from the staff he was supposed to be overseeing, in departing has been paid over the course of two-and-one-third years the equivalent of four years’ pay at the generous allotment provided to those at the pinnacle of public administration. With the severance package that was conferred upon him, Mansell qualifies as one of the highest paid public employees in San Bernardino County during the tenure he had at West Valley, despite criticisms leveled at him and the quality of his leadership from virtually every angle, including that coming from four of the board members above him, 16 of 18 department heads below him, a cross section of the public/customers/ratepayers of the district that employed him and certain members of the press who covered the district during his time in place. Charges Mansell leveled at his political masters and those that worked with him created such a contretemps that the prospect of his finding future work in his chosen profession – public water agency management – has been significantly diminished. Moreover, the trauma the district was subjected to during, and as a result of, his time in office sundered what had been a firm bond between two of the once-rising politicians on the board of the water district – Mike Taylor and Kyle Crowther. Taylor and Crowther had been responsible for Mansell’s hiring, and insulated him during the siege of the district that came about while he was general manager.
Prefacing Mansell’s hiring in December 2018 had been the controversy that erupted in the aftermath of the November 7, 2017 election which saw Clifford Young, who had first been elected to the West Valley Water District Board of Directors in 2013, reelected, and the election of Michael Taylor, the one-time police chief of Baldwin Park, who was then one of Clifford Young’s allies. Taylor displaced incumbent Linda Gonzales. Also elected to the board that year in a specially-held contest to choose who would serve out the remaining two years of the uncompleted term of Alan Dyer, who was elected to a four-year term in 2015 and had resigned, was Kyle Crowther, a Fontana School District Police Officer who was allied with Taylor. Crowther beat incumbent Robert Bourland, who was given a temporary appointment to replace Dyer earlier that year.
In a startling across-the-board set of actions that took place in a compressed time-span of less than a week in December 2017, Clifford Young was elevated to board president by his colleagues. Furthermore, the district, at Taylor’s suggestion, hired Baldwin Park City Attorney Robert Tafoya to serve as its general counsel. Additionally, the board by a margin of 4-to-1, with board members Clifford Young, Taylor, Crowther and Greg Young (no blood relation to Clifford Young) prevailing and Don Olinger dissenting, suspended or placed District General Manager Matthew Litchfield, Assistant General Manager Greg Gage, Human Resources Manager Karen Logue and the board’s secretary, Shanae Smith, on administrative leave and terminated Chief Financial Officer Marie Ricci. The board then hired former Loma Linda Mayor Bob Christman to serve as interim general manager. In short order, Litchfield, Smith and Logue were, like Ricci, no longer employed with the district. Gage was reinstated after a brief interim, but in August 2018, having found employment elsewhere, he departed from the district.
Both Youngs, Taylor and Crowther were Republicans. Olinger, a longtime member of the board, was a Democrat.
By late 2018, the relationship between Clifford Young and Michael Taylor, both alpha-type personalities, soured. Taylor, who could rely upon his preexisting cordiality with Crowther, astutely made an alliance with the Democrat Olinger, thereby eventually acceding to the position of board president. In December 2018, the board, led by Taylor, hired Mansell, a knowledgeable water operations manager, with 40 years experience, including work with the Los Angeles County Sanitation District, the cities of Los Angeles, Corona, and Rialto as well as in his role as the chief consultant with Clarence C Mansell Jr and Associates, which specializes in water operations troubleshooting.
Clifford Young was the object of resentment of some current and many past West Valley Water District employees, including Litchfield, Smith Logue and Ricci. With the dawn of 2019, the contentious circumstances in the West Valley Water District worsened, with factions that sided with both Youngs, others that sided with Taylor, Crowther and Olinger, and others that were aligned with neither side going to war with one another. Mansell hewed to the Taylor/Crowther/Olinger side of the divide, and he militated to assist those pursuing claims against the district and Clifford Young. Meanwhile, as the district was sinking into further chaos, Clifford Young and West Valley Water District Chief Financial Officer Naisha Davis and West Valley Water District Assistant Board Secretary Patricia Romero, represented by attorneys Rachel Fiset and Erin Coleman of the law firm Zweibach, Fiset & Coleman, filed a lawsuit in Los Angeles Superior Court, alleging West Valley Water District General Counsel Robert Tafoya, Tafoya’s firm, two other law firms and a district consultant had violated the California False Claims Act by coordinating with Taylor, Crowther, Mansell and then-Assistant West Valley General Manager Ricardo Pacheco in diverting money to the lawyers and consultants for work that was not actually performed or which was spurious, and that the lawyers and consultants had then provided Taylor and Crowther with kickbacks.
In the fall of 2019, West Valley Water District Human Resources and Risk Manager Deborah Martinez and her husband, George Martinez, were charged by the California Attorney General’s Office with seven felony counts of filing false tax returns relating to their two businesses, Alliance Distributing and Alliance Building Maintenance, which had been paid more than $5.6 million by the California Department of Transportation from 2012 to 2015. Deborah Martinez was Taylor’s close friend and associate. She had begun with the district as a human resources analyst in August 2016 at a pay rate of $41.76 per hour, prior to Taylor’s tenure on the board. Immediately after Taylor was sworn in in December 2017, she was promoted, following Logue’s suspension, to interim human resources and risk manager, for which she was given a raise to $60.19 per hour, a 44 percent pay increase. In April 2018, Martinez, again at Taylor’s bidding, was made full-fledged human resources and risk manager, at which point her pay jumped to $72.12 per hour, equal to a salary of $150,000 per year.
When the California Attorney General’s Office charged Martinez and her husband on September 23, 2019, both Taylor and Mansell learned of that development the same day. They withheld that information from others at the district, including the board.
In the run-up to the 2019 election, Taylor pumped close to $40,000 from his own campaign fund into an effort to keep Olinger and Crowther in office and have Greg Young, considered to be one of Clifford Young’s allies, voted out of office. Crowther was successful in his reelection effort, but Olinger was not, losing to newcomer Channing Hawkins. Greg Young emerged victorious against the candidate Taylor had supported, Angel Ramirez.
In an effort at fence mending, Taylor in early December 2019 cut a deal with Hawkins to have him elevated, immediately upon his swearing in as a member of the board, to the position of board president, an uncommon move given that the board presidency is normally reserved for a board member who has at least two and usually four or more years of experience on the board. In promoting Hawkins into the board presidency, Taylor stepped over Greg Young, who at that point had four years on the board, and his own long-term ally, Crowther, who had two years experience on the board.
A day after Hawkins was made board president and both Greg Young and Crowther were bypassed, there was a public disclosure of the charges filed against Martinez. Crowther, who had been vice-president of the board at the time, found himself in negative limelight when Martinez was asked why she had been allowed to remain in her assignment with the district after she had been criminally charged nearly three months previously. She said the top leadership of the district – Taylor as board president, Crowther as board vice president and Mansell as district manager – had consented to her remaining in place. Crowther, who had been kept in the dark over the criminal charges, was livid.
Later in December 2019, 16 of West Valley’s department heads – Public Affairs Manager Naseem Faroqi, General Services Manager Jon Stephenson, Acting Human Resources Manager Paul Becker, Operations Manager Joanne Chan, Engineering Services Manager Linda Jadeski, Business Systems Manager Albert Clinger, Accounting Manager Jose Velasquez, Geographic Information Systems Manager Telat Yalcin, Purchasing Supervisor Al Robles, Production Supervisor Joe Schaak, Water Quality Supervisor Anthony Budicin, Customer Service Supervisor Alberto Yulo, Chief Treatment Plant Operator Ernie Montelongo and Chief Treatment Plant Operator Sergio Granda – signed a letter in which they petitioned the board to terminate Mansell. The letter referenced “extreme concerns with regards to the executive management and overall unsatisfactory performance of General Manager Clarence Mansell, Jr.,” alleging a “lack of transparency, communication, honesty, professionalism and respect for employees” as well as favoritism in the hiring process for the district that entailed “flawed… hiring practices” in which “job description vacancies within our departments are molded to fit specific individuals our general manager desires, most of whom have a personal relationship with him. Often, these employees lack the qualifications and experience required to perform basic tasks and begin at an inappropriately high pay step, creating tension among long-term employees of the district.”
Thereafter, Mansell went into virtual exile, rarely venturing from his office. While he was showing up at the district headquarters, he had no contact of any substance with the personnel of the district, and was not performing in the capacity of the district general manager. Shamindra “Rick” Manbahal, who had been hired as the district’s chief financial and administrative officer in August 2019, took on, without fanfare, the role of de facto general manager of the district. Over the first ten months of 2020, Mansell lodged complaints of workplace harassment and mistreatment against the district. In October 2020, he went out on paid leave, and never returned to the district’s headquarters.
At that point, an effort began in earnest to officially separate Mansell from the district. The board retained a consultant and legal counsel with expertise regarding personnel issues.
With a substantial amount of time on his hands, Mansell made a laundry list of claims against the district and its political leadership, most of which the board majority considered to be without substance. The district’s human resources advisors retained to deal with Mansell, however, cautioned the board to use kid gloves in dealing with him, since, they said, if he took the district to court and a jury sympathetic to him was impaneled, the district would be left, in the words of one knowledgeable insider, “out to dry. He [Mansell] was threatening the district that if it didn’t pay, he would mysteriously find himself well enough to return to work. And the district didn’t want him back, because morale had rebounded while he was gone and the prospect, the whole idea, of his coming back scared the bejesus out of staff. There was talk about his pursuing workers’ compensation and medical claims.”
Furthermore, Mansell, who is African-American, was simultaneously threatening to allege racial discrimination was a factor in his no longer being on the job at the district, despite the consideration that both Clifford Young and Channing Hawkins are African-American. There was relative confidence that Mansell would not be able to sell a jury on a racial discrimination claim, but district officials and their advisors were nonetheless concerned that the cost of waging a defense against such a lawsuit would be quite expensive. Mansell was demanding a substantial amount of money, indeed, more than $1 million in the negotiations that were going on between him and the district, which was seeking a way to ease him out the door.
At one point, the Sentinel has learned, Mansell had an injury claim but didn’t file anything officially. He alleged the 16 department heads who had signed the December 2019 letter, a district source told the Sentinel under the condition of confidentiality, “were attacking him because he was black and the board had improperly publicly questioned him in his role as general manager. Staff was much happier with him being gone and looking forward to him being gone permanently. That he would return as manager was unthinkable. There was absolute horror that he would come back. The district had to prevent that from happening. At one point in the negotiations, he was saying he wanted a half of a million [dollars], and he said, ‘That will only settle part of my claims. I’m going to take that money and will come back.’ What was said back to him was, ‘You take this money and be gone.’ That was the district’s position. He was holding staff hostage at that point. Virtually everyone on staff was saying things were better since he was gone and they didn’t want him to come back.”
Things were moving along in the discussions with Mansell, according to the district insider, and it seemed at several points as if something was about to be finalized, but then things would go awry, and Mansell would up his demands. It was at that point, after a series of near settlements had fallen through, that a crucial break between Crowther and Taylor came, when Crowther learned that Taylor was feeding Mansell information about what the district’s negotiating positions and strategy were. At that point, Crowther who had once been Taylor’s closest ally on the board, grew distrustful of Taylor. The district’s human resources consultant was telling the board that the district could not risk allowing Mansell back into district headquarters and that if it did so, it would end up costing the district twice as much as it was already going to have to pay to make a clean break with him. A few days later, Mansell would bring up that he was ready to return to work. Crowther, who was convinced that Mansell had to go, at last surmised that Taylor was sabotaging the negotiations with Mansell, and seeking to assist Mansell with getting the maximum amount of money he could out of the district. Thereafter, the once solid alliance between Crowther and Taylor grew shaky, to the point that Crowther is now a crucial swing vote between the Young and Young board faction and the Taylor and Hawkins faction.
In January 2021, a deal was closed by which it was agreed Mansell would be paid $450,000 and he would leave once and for all, with it clearly agreed he would not return to the district.
“It was pretty much the consensus that he was getting more money than the district should have paid him and that if the district had gotten rid of him a year and a half ago we would have been able to settle for a fraction of what we ended up paying him but that this is the best deal you can get,” the Sentinel was told. “This way he is not going to come back. You don’t want him in the building. He will wreak havoc once again if he was let back in. In the end, Taylor voted for the settlement because it got Mansell as much money as he could get. Cliff Young did not want to give him any money because of the claims Mansell made against him and the district. He [Clifford Young] wanted to get rid of him more than anybody. But, as much as he wanted him gone, he said ‘$450,000 is ridiculous. It’s too much money.’ He voted against it.”
In the end, Mansell was provided the $450,000 severance settlement and the added bonus of medical coverage over the next year, valued at $9,136, on a quietly taken 4-to-1 vote of the board On February 23, with Clifford Young opposed.
The settlement was made without any public scrutiny until the San Bernardino Sun, in an article by writer Joe Nelson published March 24, brought attention to what had occurred.
Manbahal, who was put into the official role of acting manager on November 5, 2020, is now serving as interim manager, pending the recruitment and hiring of someone to move into the general manager role.
Mark Gutglueck

Naval JAG, Not DA, Will Prosecute Four Medics Involved Hospitalman’s Shooting Death In 29 Palms

A military court has taken jurisdiction with regard to the prosecution of those involved in the August 16, 2019 shooting death of Hospitalman 3rd Class Michael Vincent De Leon that occurred in Twentynine Palms.
Neither the San Bernardino Superior Court nor the San Bernardino County District Attorney’s Office will take up the matter pertaining to the actions of Mason Williams, Ryan Dini, Sterling Wold and Jesse Humes that fateful summer evening. Rather, the matter is being left to the Judge Advocate General’s Corps.
Off duty, De Leon, 30, was at a Friday night party at a base housing unit with other medical corpsmen when he was shot, reportedly in the head, as he stood in the residential unit’s living room.
Initially, the fatality was represented by the military service as a suicide, but the Naval Criminal Investigative Service ultimately undertook an investigation into the matter as a homicide.
The Naval Criminal Investigative Service has not made public disclosure of the precise facts or circumstances of De Leon’s death. Based on the charges against the four defendants, it appears there was no malicious intent in what occurred, but a combination of intoxication and foolishness led to the fatal event, followed by an effort on the part of those involved to misrepresent what occurred.
What can be reported has been pieced together from disparate sources, including official Navy statements as well as ones by the family to various media outlets.
Williams, Dini, Wold, Humes and De Leon were present in the housing unit, where an abundant amount of liquor was being consumed. At some point, a gun was produced. In the course of what was characterized as “horsing around” the gun was “dry fired” while pointed at De Leon and perhaps others in the room.
Dry firing is defined as simulating the discharge of a firearm that is not loaded with live ammunition.
Sometime later, the firearm or another one , this time with bullets in it, came out and was aimed and fired at De Leon, who sustained a single shot to the head.
The other corpsmen, all of whom had extensive training in medical response and are referred to as medics, failed, or were unable, to administer lifesaving assistance to De Leon. There followed a several minute delay after the shooting before a 911 call was made. That call was made from DeLeon’s cell phone. The caller reported the incident as a “suicide.”
After the shooting, a report on the matter was provided to Major General Roger Turner, then the commander of the Marine Corps Air Ground Combat Center at Twentynine Palms. Turner is said to have remarked that those involved were “idiots.”
Williams, 23, of Fort Lee, Virginia is charged with reckless endangerment, violation of a lawful general order, dereliction of duty, drunk and disorderly conduct and making a false official statement.
Dini, 37, of San Diego is charged with dereliction of duty resulting in death and drunk and disorderly conduct.
Wold, 28, of New Orleans is charged with dereliction of duty and making a false official statement.
Humes, 27, of Detroit is charged with dereliction of duty and making a false official statement.
De Leon joined the Navy on November 18, 2014. According to a statement from the U.S. Navy, “HM3 De Leon was one of our most rounded and capable sailors and corpsmen and could be counted on no matter what the task. He was always first to raise his hand anytime additional tasks required attention.”
The proceedings are to take place in a Marine Corps courtroom at the Twentynine Palms Marine Corps Base, with the testimony and evidence for the prosecution provided in the main by Naval Criminal Investigation Service personnel and the case being presented by Navy judge advocates. The Marine Corps is the maritime land force service branch of the United States Armed Forces and is part of the U.S. Department of the Navy.
Word has come that one of the corpsmen, in accordance with a plea deal arrived at with the Judge Advocates General’s Corps, will testify against the other three.
-Mark Gutglueck