State investigation of public works scandal nearing end

July 22, 2009


(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.”

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Member Opinions:

By: Chuck on 8/2/09

You will not get your money back. But what would be nice is those contractors coming forword on there own and tell there talls.

By: Myself on 8/1/09

If what I se on this site about these county employees this mess was started here on June 10th that was about 2 weeks after they had been put on leave, this has been going on for two months now, the supes took a leave of absence two/three weeks ago right in the middle of the Edge/Wilcox farce and all they have done is extend that and this case longer when is this going to end, and do we get our money back.

By: Chuck on 7/31/09

This whole thing is so deep into the county $%&#. Time to clean house.

By: lucky2 on 7/31/09

Every contractor in this county knew of the two of them and what they were doing. County Counsel needs to ask local MB and Cambria dirt contractors. No respect from the construction community at all. Again- send a P.I out and talk to local contractors. The claims are VERY true-

By: SanSimeonSam on 7/27/09

I wonder if this is limited to the county. It seems strange that Mayor Romero would be shedding tears at the departure of the city manager after 30 some years….Maybe Copeland money only goes so far…..

By: paperboy on 7/27/09

“State investigators” are looking into this? Better them than the county counsel. Talk about the fox guarding the chickens…

Maybe it’s time to entirely clean house at the county.

By: itneverends on 7/23/09

Re Yelapop’s “contract” comment, Max Keller is a SLOCEA represented employee under Civil Service. He does not have an employee contract–only the top County managers that are not under Civil Service do. The County Public Works Department has a formal moonlighting policy that applies to all Public Works employees. Under that policy, Mr. Keller is not prohibited from doing private work, in off duty hours, under the guidelines of the policy.

By: skyler on 7/22/09

doesn’t change the fact that county attorney’s been runnin The Cliffs-at least be descreet!

By: ajdury on 7/22/09

The plot thickens.

By: Newsome on 7/22/09

yelapop: That would make the sitch a little more ugly. Does he? Would Squirrely Bianchi have known that?

By: yelapop on 7/22/09

Newsome: What if I told you that Keller has a “no-moonlighting” clause in his contract?

By: Newsome on 7/22/09

About the Bianchi tie-in:

I did not like her as a supervisor. I thought she was a abrasive, conniving, and a socialist. However, I do not question her honesty nor her smarts.

Conning the county out of a couple of loads of road base would be stupid and dishonest, and I don’t see her doing those things, particularly while sitting as supe.

Perhaps she hired Keller for weekend work (since they both have deep roots in the county, perhaps they’re related…), but I dont see it going any further than that.

By: SillyPerfections on 7/22/09

I think Karen’s “sources” are the people who made the false allegations. As for all this “damage control” business, I could really care less about damage control. I just posted my opinion and what I know as fact.

By: Cindy on 7/22/09

Hey There, Clem, Sunny & rf

I hear yah… for sure.

Behind the reported “report” is another report. By a bigger power and thats a fact. Our county attorney needs to throw in the towel.

By: rogerfreberg on 7/22/09

ooou aaah, don’t ya just love it?

The story about Shirley Bianchi’s home is an interesting allegation.

Let’s see where all this goes.


By: sunnyhaven on 7/22/09

You can always tell when someone like silly, who is Randy or Max or someone close to them, come to their defense by trying to make the whistle blowers look bad. Classic offense strategy when the fire is lit under them.

Karen’s articles have a strong way of being proved correct so far, as I’m sure this one will too.

By: Clemintine on 7/22/09

Silly’s post is yet another example of damage control before the hammer drops.

I await the rest of the story and if the allegations are true (remember that damage control was also run up the flag pole when the EFI, Gearhart, Hurst, Edge/Wilcox stories first broke) that people are held accountable, fired if appropriate.

By: Cindy on 7/22/09

It would be interesting to review a county mowing contract. Does the contract include the furnishing of county supplies? Generally contractors furnish their own supplies but not necessarily. Interesting point there.

By: SillyPerfections on 7/22/09

Oh and as for your allegations claiming Keller gave his son a mowing contract…the county has multiple sources that we use for mowing. This kids mowing contract file has like three receipts in it. The other contractors files are bulging. The kid started a new business and we like to keep locals in business. There was no “pilfering” of gas or mowers. That is just ridiculous. Do you really think people come and mow the road sides for free?? Of course they get their costs covered and their costs include gasoline. Why is this still news??

By: SillyPerfections on 7/22/09

Oh Karen, you really are a joke. First of all, that so called meeting where Keller told his employees they couldn’t say anything, IT NEVER HAPPENED. How can you just sit there and make this bull**** up?? THERE IS A GAG ORDER on this case, and neither Keller NOR Ghezzi can talk to ANY OF THEIR employees. So how is it that Keller was able to hold a meeting???? Are you serious???? Secondly, the allegations were made by three employees who didn’t get a raise…and if you read the allegations you would laugh at them hysterically. Which I am sure you will when the report becomes public. I do hope you will post it on your site…without changing the information to make the story look better.

By: Cindy on 7/22/09

WOW- Ctrl+ enlarges the tiny found in the story but also REALLY ENLARGES the font in the opinion area.

By: BeenThereDoneThat on 7/22/09

Font size good here (me). County position not so good.

I hope for the good of the county and all the B.S. we have been through (money fraud, county sex cases) that this isn’t true. We really don’t need any more crud on top of this sh** pile.