The still-unfolding revelations about hidden state parks funds add chaos and deliberate deception to the usual waste, fraud and abuse complaints regularly lodged against government bureaucracies.
The investigative report released by the attorney general's office last week reviewed state park finances looking specifically at undisclosed surpluses in two funds, $34 million in the Off-Highway Vehicle Fund and $20 million in the State Parks and Recreation Fund.
It concludes that there was no effort to hide the existence of OHV monies. Rather, erratic expenditures, multimillion-dollar borrowing by the Legislature for the general fund, improper infusions of fuel excise taxes and then the reclaiming of those monies in short, legislative sleight-of-hand budgeting and sloppiness, not deception accounted for the discrepancy in fund balances reported to the Department of Finance and the state controller's office.
In contrast, investigators conclude that "by no later than 2003 and perhaps as early as 1999 the failure to accurately report all State Park and Recreation Fund monies to the Department of Finance became conscious and deliberate." The attorney general's office found no evidence of embezzlement or, curiously, expenditures of any kind from the undisclosed funds. Instead the money sat unused even as department officials claimed the state budget crisis would force them to close 70 of the 278 parks. In response, thousands of park patrons made donations and volunteered their services to keep parks running.
Investigators speculate that department bureaucrats feared that the Legislature and governor's office would cut general fund support for the department even more if they knew about the existence of the $20 million.
But that explanation doesn't make sense. As the report states, "Because they were not reported to the Department of Finance, the monies seem to have represented an essentially useless reserve that could not be spent by the Parks Department as there was no legislative appropriation to do so." Testimony from Ruth Coleman, longtime director of the Department of Parks and Recreation, might reveal a great deal about why park officials deliberately deceived state finance officials. Coleman resigned just before news of the hidden funds broke and has refused to talk to investigators. She needs to, unless she wants to leave the impression she has something to hide.
Nearly a dozen top officials have been fired. New leadership is in place. The Legislature has passed and Gov. Jerry Brown signed legislation aimed at requiring all state agencies to reconcile their balances with the Department of Finance and the controller's office.
Everyone seems ready to move on. No wants to ask the obvious question.
Were any crimes committed? Is it legal to deliberately deceive the Legislature and the Department of Finance about state funds? The attorney general's office did not conduct a criminal review in this case. A spokeswoman for the attorney general told The Sacramento Bee, "We were asked to do a civil investigation, which we did, and then turn the facts over." If a deliberate attempt to deceive the governor and Legislature about state funds is not a crime, it should be. The attorney general's office should prosecute or provide guidance to lawmakers on how to close these legal loopholes.