John Wallace pleads to criminal conflict of interest charge

March 6, 2018

Former South County Sanitation District administrator John Wallace pleaded no contest to two misdemeanor conflict of interest charges Tuesday as part of a plea deal that will allow him to avoid a trial on four felony charges. [Cal Coast Times]

Wallace was also ordered to pay $59,721 in restitution and serve up to six months of bench probation, that will end after the restitution is paid. Because of statutes of limitation, the restitution is based on payments made to Wallace under his administrative contracts for charges from Jan. 24 through Feb. 28, 2013 at the South County Sanitation District, and from June 6 through Oct. 31, 2013 at the Avila Beach Community Services District.

“This prosecution illustrates the very technical nature of California’s conflict of interest law and serves to place special districts statewide on notice that this business model poses an inherent conflict of interest and puts ratepayer’s money at risk,” said SLO County District Attorney Dan Dow.

In Jan. 2017, the SLO County District Attorney’s Office charged Wallace, 73, with three felony and two misdemeanor conflict of interest charges for allegedly using his positions as a government administrator to funnel money to his privately owned engineering company, The Wallace Group.

Wallace’s attorney Kenneth White said during a preliminary hearing on Monday that he planned to use a statute of limitation defense. In addition, Wallace’s attorneys had also argued that because sanitation district board members and the districts legal counsel approved of the conflicts of interest, Wallace was not at fault.

“The resolution of the case was made in light of Judge Staffel’s statement regarding the statute of limitations, and equitable considerations, including the fact that attorneys for the districts had at various times indicated that a conflict did not exist and a 1993 Grand Jury finding that Mr. Wallace’s similar arrangement at the San Simeon Community Services District did not constitute a conflict,” according to the district attorney’s office.

For years, government employees, members of the public and a grand jury found conflicts of interest in Wallace using his government administrative position to generate jobs for Wallace’s private engineering firm.

In 2011, the Grand Jury found that the district board failed to recognize the conflict of interest and to eliminate or, at minimum, mitigate the conflict of interest and that Wallace’s contract had never been competitively bid as required by law.

San Luis Obispo County Auditor Controller Jim Erb was assigned to look into the Grand Jury’s conflict of interest allegations. Erb found no wrongdoing, he later reported, allowing the conflicts of interest to continue.

Several former sanitation district board members including Matt Guerrero, Tony Ferrara and John Schoals voted in support of many of Wallace’s questionable actions and verbally condemned several people who asked the district attorney to investigate Wallace.

Because of these actions, prosecutors did not file charges against Wallace until many of his conflict of interest actions were protected by the statute of limitation laws.



  1. sweethome says:

    Horse_soldier Don’t forget about CAPSLO and SLOPD

    (6) 10 Total Votes - 8 up - 2 down
  2. Jorge Estrada says:

    While the audience is watching the alleged crooks, the good guys are scheming to export our water. This downfall on priorities is the best screen that media can provide. Oh I may be mistaken, you all know what I’m taking about, right?

    (-1) 7 Total Votes - 3 up - 4 down
  3. pasoparent5 says:

    Years ago, the local media wouldn’t pursue this story but Cal Coast News did and I just wanted to say thanks. If not for CCN (or is it Cal Coast Times now? Not sure.) we wouldn’t have learned the about John Wallace, the Lil Bully on the BOS, Miss Dee Gift Card Swiper, Lisa Solomon Chitty Chitty Bang Bang, Kelly Gearhart…the list goes on. Thank you CCN.

    (29) 35 Total Votes - 32 up - 3 down
  4. rukidding says:

    SLO at it’s best. Where else can anyone get away stealing this much and then only get a slap on the hand. I guess if the politicians are involved then there is another set guidelines to follow. I always thought that it was suppose to be protect the innocent and not the guilty?

    (23) 27 Total Votes - 25 up - 2 down
    • SLOBodan says:

      Heartbreaking to see this happen right in front of our eyes. The corruption continues and we the people can’t do a thing about it. (and they know that!)

      (11) 15 Total Votes - 13 up - 2 down
  5. fhill123 says:

    Kelly Gearhart, eat your hart (sic) out!!

    (16) 18 Total Votes - 17 up - 1 down
  6. copperhead says:

    Government contract = license to steal.

    (19) 21 Total Votes - 20 up - 1 down
  7. horse_soldier says:

    Cesspool of crooks!
    SLO County DA
    Who did I miss?

    (30) 42 Total Votes - 36 up - 6 down
    • kayaknut says:

      From Arroyo Grande add Harmon, Barneich, and Ray.

      (19) 25 Total Votes - 22 up - 3 down
    • says:

      “Cut the mike!”,
      thanks Wallace for taking the fall. Im sure you paid more in legal fees than you did in fines.
      ” We call B.S.”.

      (21) 23 Total Votes - 22 up - 1 down
  8. shelworth says:

    Really? Steal hundreds of thousands if not millions from Grover Beach and only have to pay back 60K? Such a deal!

    (38) 46 Total Votes - 42 up - 4 down
  9. the situation says:

    Corrupt SOB belongs in jail. Period. Disgusting what people get away with in this county.

    (38) 46 Total Votes - 42 up - 4 down
    • exWGemployee says:

      Did you have any doubt?

      (19) 25 Total Votes - 22 up - 3 down
      • exWGemployee says:

        He’s been getting away with dirty business for decades. I’m not surprised that all he got was a slap on the wrist and a $60k fine. He is slicker than snot! I’m sure he’s a little hesitant to prance around town proudly these days, though.

        (2) 2 Total Votes - 2 up - 0 down

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