Valdivia Reportedly Laundering His Political Funds Through His Laundromat

What for many was a long four-year municipal nightmare in San Bernardino grew to a close on Wednesday, December 21, with the installation of Helen Tran as the 222,101-population county seat’s mayor.
Amid a host of firsts and landmarks represented by Tran assuming the mayoralty – not the least of which is that she is the city’s first Asian American mayor – the event was more remarkable because it marked the departure of John Valdivia from the city’s premier political position.
A mere four years after Valdivia assumed the mayor’s gavel and appeared to be catapulting toward much loftier positions in either or both state and federal politics, his career as a public official now lies in tatters, with even his most ardent supporters and hangers-on, individuals who had linked their own business or political prospects to him, having abandoned him.
Meanwhile, no longer wielding the power that came with the position into which he was entrusted, he is now incapable of staving off the examination of and delving into the depredations he routinely engaged in both during his term as mayor and while he was in the position of Third Ward councilman in the more than six-and-a-half years prior to that.

Multiple questions yet attend his demise. Some of those extend to whether the San Bernardino County District Attorney, the California Attorney General’s Office or federal prosecutors will follow through on the investigations that have been launched into his conduct and the graft-encrusted arrangements that attended his mayoral administration. Others pertain to whether he will be able to convert to cash the substantial amount of money local business owners and entrepreneurs invested in his political career in the form of donations to his electioneering fund so he can put the proceeds into his own pocket or personal bank account.
From the outset of his political career, Valdivia was a politician whose services were available to the highest bidder, and he made no secret of it. In 2009 at the age of 33, he made his first foray into politics when he ran for the San Bernardino City Council in the Fourth Ward, finishing third among four candidates, which included the ultimate winner, Fred Shorett, who would become Valdivia’s future nemesis. Two years later, Valdivia made a calculated relocation of his residence to the city’s Third Ward, where he once again vied for the council against the incumbent, Tobin BrinkerBrinker was politically aligned with then-Mayor Patrick Morris, who was working along with then-City Manager Charles McNeely in a do-or-die effort to overcome the financial challenge the city faced after nearly decade-long deficit spending which had depleted the city’s reserves and left the municipality teetering over a financial abyss. Morris, a former Superior Court judge, had come to recognize that exorbitant personnel costs were driving the city toward an inevitable bankruptcy and he was desperately seeking to maintain a consensus on the city council to hold the line on further employee salary and benefit increases, as 92 percent of the city’s budget went to defray employee pay and benefits, with 69 percent of the budget devoted to the salaries and perks of the city’s public safety personnel, i.e., sworn police officers and the city’s firefighters.
Brinker represented a crucial city council vote in support of Morris’s strategy to reduce spending by not giving in to city employee union demands for continuing raises and benefit enhancements. Meanwhile, the city’s employee unions, including the city’s powerful public safety employees’ collective bargaining units – the San Bernardino Police Officers Association and the San Bernardino Firefighters Association – were stridently rejecting the call to freeze the pay of firefighters and police officers. With the unions’ support, Valdivia in the November 2011 election trounced Brinker, 826 votes or 69.24 percent to 367 votes or 30.76 percent.
Both before and after the election, Valdivia confidently declared that the city was flush with money, and he insisted no municipal financial crisis existed. A week after his March 2012 swearing in, Valdivia offered assurances that the city was shipshape financially, based on what he said was the opportunity provided to him as an elected official to examine the city’s books. Five months later, in August 2012, the city declared bankruptcy with a Chapter 9 filing.
Thus, Valdivia had successfully launched his political career by actively resisting the fiscal discipline the city needed to prevent itself from being consumed by the financial demons that surrounded it. Three years later, in 2015, Valdivia’s financial profligacy was put on display when the city council, in its efforts to guide San Bernardino, the oldest of the county’s municipalities and the county seat, out of bankruptcy, was forced to close out its 148-year-old fire department in favor of a contract with the county fire department, and to shutter the municipal sanitation department, creating a trash hauling franchise which was ultimately awarded to Burrtec Waste Industries Inc.
Loss of its fire department and sanitation division was a severe blow to the city’s prestige, as overnight it went from having been, for more than a century, a full-service municipality to one in which it was dependent on service providers over which the mayor and city council, and by extension the city’s residents, no longer had control.
Remarkably, Valdivia, a Republican who was seeking to cultivate a reputation as a fiscal conservative, was able to keep hidden from most of his constituents that he had sided with the unions in continuing to grant city employees raises and higher benefits. He refused to talk about how his unwillingness in 2012 to stabilize city employee pay and benefits resulted in the bankruptcy that ultimately led to the loss of the city’s fire and sanitation departments whenever the issue was raised.
Along the way, there were multiple displays of Valdvia’s political ambition.
In February 2014, just a little less than two years after he had assumed municipal office, Valdivia announced he would seek the Republican nomination for Congress in the 31st Congressional District. Within a short period of time, however, Valdivia and his advisors thought better of that, since such a campaign would unequivocally identify him as a Republican, and in the City of San Bernardino, Democrats outnumbered Republicans 48 percent to 22 percent, and in the Third Ward that margin was 49 percent to 18 percent.
From the outset of his time in office, Valdivia made an effort to accumulate a substantial electioneering war chest, as he was constantly approaching business interests in the city, seeking political donations. Partially as a result of his advantage in this regard, he warded off any challengers in 2015, and he retained his position as Ward Three councilman when no one surfaced to run against him.
Early in his time in office, Valdivia celebrated himself as a dyed-in-the-wool fiscal and social conservative, one who was mindful of the cost of various city programs and as someone who was adamantly opposed to the proliferation of marijuana. His adventurousness extended only, he said, to experimenting with any serious effort to trigger economic growth in the city.
In 2016, a move by the city council and activists in the city was made to change the city charter, which had been in place since 1905, revamping city governance. The new charter presented to voters that year called for changing the city’s treasurer, city attorney and city clerk positions from elected to appointed ones, moving its elections from odd-numbered to even-numbered years, and reducing the power and administrative reach of the mayor from what it had been since 1905, such that the mayor no longer had co-regency with the city manager and control over direct hiring and firing of city employees. Valdivia, who coveted strong mayoral authority for himself, had opposed the charter change. Nevertheless, San Bernardino’s voters approved making that change and that year they also passed Measure O, which allowed for the sale of marijuana within the city.
In 2018, despite the charter change that had significantly reduced the mayor’s authority, Valdivia challenged Carey Davis, who in 2013 had succeeded Morris as mayor with Morris’s endorsement.
Valdivia prevailed in that election, with 19,155 votes or 52.51 percent to Davis’s 17,327 votes or 47.49 percent.
Upon being sworn into office on December 18, 2018, Valdivia straightway began to militate to fire then-City Manager Andrea Travis-Miller, whom he considered to be a vestige of the Davis Administration. His intention was to install a city manager of his own choosing, one who would be willing to broker a deal that would give him the de facto authority to hire and fire city employees and department heads, and thus provide him with the power as mayor that had been attenuated with the 2016 charter change. As of December 2018, Valdivia essentially controlled four votes on the city council – those of newly elected First Ward Councilman Ted Sanchez and Second Ward Councilwoman Sandra Ibarra as well as those of Fifth Ward Councilman Henry Nickel and Sixth Ward Councilwoman Bessine Richard, with whom he had cultivated alliances while he was Third Ward councilman. After three months of constantly calling for and having the council carry out reviews of her performance, in April 2019 Valdivia mustered four votes to put Travis-Miller on paid administrative leave. In May 2019, when a special election held to fill the Third Ward council position he had vacated to move into the mayor’s post resulted in a victory by his ally Juan Figueroa, Valdivia effectively controlled five of the city council’s seven votes.
In short order,
Valdivia effectuated Travis-Miller’s removal as city manager, replacing her with soon-to-retire Assistant City Manager Teri Ledoux and then cutting deals every which way intended to benefit his political benefactors.
He simultaneously began to enrich himself by utilizing his position and authority as mayor. Although it was not widely known, among some it was recognized that money was a major motivating factor with regard to Valdivia’s political comportment well before he was mayor. He had demonstrated his willingness to take money from the police officers’ union and the firefighters’ union in his first successful run for council in 2011 in exchange for voting against extending the fiscal discipline that Morris and McNeely were trying to impose on the city to the city’s policemen and firemen. In 2015, as Burrtec Waste Industries Inc, Athens Services and Waste Management Inc were competing for the city’s trash hauling franchise, according to Athens Services Executive Vice President Gary Clifford, Valdivia had approached the would-be franchisees, soliciting $10,000 donations. Clifford said he had to tell Valdivia his company could not provide him or his campaign with any money while the franchise bid process was ongoing.
Unsatisfied with his $106,793 mayoral salary, $8,768 in stipends for attending meetings of regional boards, joint powers authorities and other governmental entities and committees, along with medical, dental and other benefits such as a car and travel allowance totaling $24,665 and retirement benefits of $29,322.40, for a total taxpayer-defrayed compensation of $169,548.40 annually paid to him by the city’s taxpayers, Valdivia went into simultaneous money-making mode. Using his consulting company AAdvantage Comm LLC, Valdivia convinced clients they would have something to gain by hiring the mayor of San Bernardino to intercede for them, as he could use his influence and ability to engage in backroom political horse-trading to ensure that their applications for project approval or government contracts or franchises would achieve for them desired results.
Of major significance was the way in which Valdivia in the aftermath of the 2016 passage of Measure O in San Bernardino and the statewide passage of Proposition 64, the adult use of marijuana act, made a 180-degree flip. Before Proposition 64 and Measure O passed and while the matter was in doubt, Valdivia hewed to the Republican line, maintaining he was adamantly opposed to marijuana availability in the city. After the 2016 election in which both the statewide proposition and the municipal measure found favor with voters, Valdivia metamorphized into an advocate of multiple individuals and entities seeking permits and licenses to operate marijuana-related and cannabis-related businesses in San Bernardino. More than a dozen would-be commercial cannabis business applicants have related how Valdivia took money from them, either in the form of political contributions or under-the-table payments, while promising he would ensure their applications for cannabis-related business permits would be approved. Even before he was sworn in as mayor in December 2018, he was gladhanding with would-be commercial marijuana enterprise operators, hailing them as the new breed of entrepreneurs that were to lead San Bernardino into a prosperous future.
As mayor, Valdivia soon developed a further reputation for taking money from those who needed the city to take action that would benefit them or their companies. Through AAdvantage Comm LLC, he accepted consulting fees, assuring his clients he could deliver for them the approvals they needed. As mayor, he wielded the gavel at city council meetings, controlled the ebb and flow of discussion and debate and had sway over what matters would be discussed and what actions contemplated but did not possess a vote, although he could do so to break a tie, and he had mayoral veto power on votes that ended 4-to-3 or 3-to-2. Thus, he rationalized, he could take money from those with business before the city council, since he would not himself be voting. For a short time after his ally Figueroa was on the council, he controlled, essentially, five of the seven council votes and was the head of a ruling coalition that essentially ran the city. He let all of AAdvantage Comm’s clients and prospective clients know that he had command over the council, and the money poured in. To sidestep any conflict-of-interest issues, he duly reported as personal income on his official California Form 700 statements of economic interest the money he was making as the owner of AAdvantage Comm, cleverly omitting exactly who AAdvantage Comm’s clients were.
With Ledoux in place as his handpicked city manager who was to see her pension upon retirement zoom from the $125,000-per year range to near $180,000 as a consequence of the promotion Valdivia had provided her accompanied by his control over five-sevenths of the city council, Valdivia in the summer of 2019 was at the apex of his power, bestriding San Bernardino as a political colossus.
By the end of that summer, however, his political empire began to collapse.
First, his chief of staff, Bill Essayli, left to take a position with an Orange County law firm. Then, one by one, as they watched Valdivia pursue objectives they recognized as averse to their own interest or that of the citizenry at large or that he was using their votes and support to construct quid pro quos with his clients in which he was given money for their votes, Ibarra, Nickel and Sanchez found themselves on the outs with the mayor. By the fall of 2019, Valdivia no longer had five reliable votes on the council but only two – those of Richard and Figueroa – to support whatever he was attempting to achieve.
There followed a series of revelations as cannabis entrepreneurs began to speak openly and bitterly about how the mayor had promised marijuana operation licenses and permits to those who had applied for them in exchange for cash; an employee in his office, Mirna Cisneros, related how Valdivia made sexual advances to her and how he misused city funds to engage in travel and activity that had nothing to do with city business and was taking money from those with business before the city; another employee of the mayor’s office, Karen Cervantes, related how the mayor had made sexual advances toward her; his field representative, Jackie Aboud, likewise said Valdivia had pressured her to accommodate his sexual needs; Alissa Payne, a single mother whom Valdivia appointed to two city commissions, said Valdivia had made similar indecent overtures to her; Valdivia’s field representative Don Smith brought to light how he had been present while Valdivia made a late night rendezvous with a city tow service franchise holder who handed Valdivia an envelope stuffed with cash; Matt Brown, who had succeeded Essayli as Valdivia’s chief of staff, came forward to say that Valdivia attempted to have him make fraudulent unfavorable work reviews of Cisneros, Cervantes, Aboud and Smith to justify their firings and discredit them with regard to the allegations they had made.
Based on a host of Valdivia’s actions, the city found itself facing nearly a dozen lawsuits.
With untoward accusations mounting, Valdivia continued to engage in questionable, bold and risky behaviors, utilizing city resources, funding and personnel to provide or defray the cost of providing materials and services relating to political promotions of himself and his associates while using city money to cover the cost of travel, meals and lodging while he was engaged in matters unrelated to his duty or function as mayor.
In return for money provided to him by a Chinese-based company, SCG America, Valdivia pushed to give SCG America an inside track on a proposal to demolish the Carousel Mall in downtown San Bernardino in preparation toward the transition of the property upon which the mall sat into a mixed-use retail/residential project in a way that SCG America stood to obtain clearance to obtain the highly lucrative position as the master developer of the project.
In December 2021, the city council unanimously censured Valdivia. That action was based upon Valdivia in June 2021 utilizing a host of city facilities and assets to stage what he billed as the “State of the City Address,” a barely disguised effort to promote himself through what was essentially intended as a fundraising event to fatten his political war chest by creating an invitation list that consisted of his past donors, whom he referred to as San Benardino’s “movers and shakers,” along with a handful of his political associates, including Figueroa. He excluded the remaining six council members from the “State of the City Address” guest list.
In passing the resolution of censure, the council had an attorney, Norma García Guillén, present documentation relating to Valdivia’s expenditures of public funds that were used for a hotel stay and meal in San Diego on September 20-22, 2019; a hotel stay in Irvine on September 10-11, 2020; a hotel stay and meal in Irvine on March 8-9, 2021; a hotel stay in Irvine on March 18-19, 2021; meals in Nevada on March 22-23, 2021; a meal in Newport Beach on March 23, 2021; and a meal and hotel stay in Irvine on April 13-14, 2021, all of which García Guillén said had nothing to do with city-related business.
Looking toward his 2022 election campaign, Valdivia created a political war chest titled John Valdivia For Mayor 2022. In 2021, he received donations of $380,987.21 into that account. In the first five months of 2022, he deposited another $106,500 into that account for a total over 17 months of $487,487.21.
Valdivia also created another fund, the Mayor John Valdivia Legal Defense Fund. With legal challenges against him mounting, he began transferring money out of the John Valdivia for Mayor 2022 account into the Mayor John Valdivia Legal Defense Fund.
Valdivia purported to make a number of disbursements from his political fund in support of his electoral effort in this year’s June primary, in which he was challenged by six others, including his one-time political mentor, former City Attorney Jim Penman; another erstwhile political ally, former Councilman Henry Nickel; former San Bernardino Human Resources Director Helen Tran; his longtime political opponent, Treasure Ortiz; Mohammed Khan; and Gabriel Jaramillo.
Many have questioned whether the money that Valdivia claimed to have spent on the June 7 electoral effort was actually expended.
In total, Valdivia amassed $854,626.21 that was to ostensibly go into his mayoral reelection effort. A good chunk of that was diverted to redress the legal issues he faced.
Documentation obtained by the Sentinel shows that Valdivia made disbursements totaling $446.762.45 from his legal defense fund to pay for services rendered to him by his lawyer, Rod Pacheco, in defending him against the several lawsuits naming him and the city, including those filed by Cisneros, Cervantes, Aboud, Smith and Brown, as well as in response to the city council’s censure resolution. The payments made to Pacheco entailed $9,274.10 in 2020; $386,354.25 in 2021 and $51,134.10 in the first six months of 2022 ending on June 30.
In 2021, he received donations of $380,987.21 into the John Valdivia for Mayor 2022 account. In the first five months of 2022, he received another $106,500 into that account for a total over 18 months of $487,487.21. This money was in addition to money he had left over from his 2018 mayoral run and money he had collected during his first two years as mayor.
In 2021, 
according to campaign reporting documents he filed, Valdivia expended $136,367.04 in preparing for his 2022 campaign. In 2022, from January through to the end of June, he spent $513,138.85 on the campaign, again according to his campaign expenditure reporting documents. Thus, Valdivia maintains that he laid out $649,505.89 overall on his effort to remain in office in conjunction with the 2022 election. Despite that, and the consideration that he outspent all six of his opponents in the contest, Valdivia finished third, with 2,970 votes or 16.92 percent, behind second-place finisher Jim Penman, who polled 3,510 votes or 20 percent, and the top vote-getter, Helen Tran, with 7,310 votes or 41.65 percent. Thus, Valdivia did not qualify for the runoff.
Valdivia’s abjectly poor performance in the June election has led many to question whether his campaign made the expenditures on his reelection effort as he claimed.
As of June 30, Valdivia’s election fund had an ending cash balance of $43,988.38 and cash equivalents of $222,695.24. Immediately after the election, Valdivia departed for the East Coast, where, it was said, he was to fly to Europe. There was concern that he was engaged in an effort to secret a substantial portion of his remaining electioneering funds into banking institutions in New York and potentially Switzerland, allowing him eventually to take control of that money and convert it to his own personal use. As it turned out, Valdivia did not make a sojourn to Europe as it was reported he had previously intended.
Despite having paid $446.762.45 from his legal defense fund to pay for Pacheco’s services, Pacheco on July 19 of this year filed separate motions to withdraw from representing Valdivia in each of the four cases yet outstanding against him by Cisneros, Cervantes, Smith and Aboud. Those motions were granted.
According to the mid-year filings for Valdivia’s electioneering and legal defense accounts, which run through June 30, Valdivia owed Pacheco’s firm $42,000 as of May 22. Thereafter, the law firm billed Valdivia for another $9,200 worth of legal work prior to the June 30 finance reporting deadline.
It thus appears that Valdivia is in arrears to Pacheco by some $51,200.
once advocated long and hard on Valdivia’s behalf, insisting that the then-mayor was deeply committed to the city, that those who were suing him had fabricated the charges against his client out of whole cloth and that the city council’s action against Valdivia, including the censure resolution, were politically motivated attacks. It now appears that Pacheco’s deep faith in Valdivia as a dedicated and honest public servant has been compromised. A politician who regularly interacted with Pacheco told the Sentinel that Pacheco had abandoned his client because he had discovered, in the aftermath of the election, that Valdivia was transferring his political electioneering money out of his campaign and legal defense accounts to personal savings, interest bearing and investment accounts. As his legal representative, the Sentinel was told, Pacheco is constrained by attorney-client privilege and the ethical restrictions of his profession from disclosing what he knows about Valdivia’s activity.
The Sentinel is reliably informed that Valdivia, who at one time worked as a representative for several pharmaceutical companies, including Solvay S.A., GlaxoSmithKline, Schering-Plough, Merck & Co. and Amgen, has now purchased a laundromat. This prompted one his former council colleagues to quip, “John is going to launder the political money he controlled through his laundromat.”
Mark Gutglueck

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