State investigation of public works scandal nearing end
July 22, 2009
By KAREN VELIE
(EDITORS” NOTE: Following CalCoastNews’ continuing investigations into the alleged theft of public funds by county workers, concerned employees have come forward with allegations that millions in public monies have been stolen and threats of retaliation repeated.)
State investigators continue to investigate claims a few high ranking public works employees have absconded with public funds and used San Luis Obispo County contracts and equipment to personally enrich themselves, a handful of county employees said. County officials claim the investigation is expected to end soon.
Last month, Public Works Director Paavo Ogren placed Road Maintenance and Operations Manager Randy Ghezzi and Road Maintenance Supervisor Max Keller on paid administrative leave while the county initiated an investigation into allegations of theft of public funds.
In addition to running side businesses with county equipment, employees allege county contracts are used to personally enrich department supervisors.
Prior to the public works departments creation of a mowing contract, county employees using government mowers maintained public lawns. In addition to handing his stepson the new contract, employees allege Keller provided his prodigy with county equipment and gas to run his business.
Employees also question Ghezzi’s placement on the Mid-State Fair Heritage Foundation Board. Sources contend their boss bragged of trading the promise of county contracts for his seat on the prestigious board.
In another example of a county employee allegedly benefiting from a county contract, recently terminated assistant county administrator Gail Wilcox’s Arroyo Grande home was jointly purchased with local lawyer Clay Hall, whose firm receives hundreds of thousands of dollars annually as the vendor responsible for the majority of San Luis Obispo County’s outside legal work. The lucrative legal contract never went out for bid even though county laws require that expenditures of more than $10,000 are open to the public.
San Luis Obispo County officials have adopted a conflict of interest code patterned after the state Government Code. Both require financial disclosures by elected and appointed county officials and specific employees. The state code prohibits county employees from benefiting from any contract approved by his or her department.
Employees report that county officials have made numerous threats to punish those who discuss the allegations of fraud. Threats of financial and personal repercussion have kept many quiet when interviewed by state investigators.
“They could not guarantee our anonymity,” an employee said.
During a meeting in which Keller was voicing his plans to punish the employees that had blown the whistle, an employee asked if that was a “threat.”
“Max said ‘if any of you say stuff after hours you will catch hell,’” an employee said.
In early June, officials from county counsel, the personnel department, and state investigators began interviewing public works employees regarding a whistleblower’s allegations.
Sources outline a long list of alleged misappropriations such as Ghezzi and Keller instructing county employees to do carpentry work at their homes while on the county clock, commandeering county equipment for personal gain, and absconding with large quantities of gasoline.
Employees report memos, reportedly from the board of supervisors, have placed them under a gag order reportedly so “that the truth will come out and not rumor and innuendo.” However, dozens of sources contend the theft of county resources has been going on for decades because public officials attempts to protect the county’s reputation and access to state funds.
An employee, who retired seven years ago, said he sent every then-supervisor a letter describing problems with theft in the department. Nevertheless, following his departure the employee contends problems with the misuse of public funds increased. The employee noted that, at that time, Keller was doing work at former supervisor Shirley Bianchi’s home.
“They are so used to covering things up,” an employee said. “The supervisors are afraid of loss of revenue and image.”
Bianchi said Keller delivered rock to her home on a weekend and he used his own vehicle.
“That’s bull sh*t,” Bianchi said and claimed she never received a letter about the misuse of public finds. “Putting this out before the investigation is public, impugns the reputation of the county.”