Hidden Money Cover-up


Wednesday January 9th, 2013   •   Posted by K. Lloyd Billingsley at 7:55am PDT   •  

We have been following California’s hidden-money scandal, in which bureaucrats in the state Parks Department concealed $54 million for more than a decade, even as the Department was shutting down 70 parks, the state facing budget deficits of $16 billion, and politicians stumping for huge tax increases. One legislator wanted to know how much more “deceit and thievery” was going on. California’s Department of Finance, which failed to detect the money for more than a decade, decided to take a look.

Their audit, released in late December, verified the hidden $53.4 million and said that the surplus existed since 1993. Auditors declined to look back any further and did not speculate on why state employees would conceal money. They also found $3.9 million in a fund for donations that had “no assigned purpose” but they assigned no blame. Rather, it was all a question of poor management and insufficient training. The auditors left any legal questions to the Attorney General, whose January 4 report proved puzzling to reporters at the Sacramento Bee, which broke the hidden-money story last year.

The AG found that Parks had concealed only $20.5 million and the remaining $33 million was “simply obscured by long-term complexities in managing that fund.” Even so, the investigators proved unable to explain how the money piled up, while ruling that it was all “unintended” and not due to misconduct. In fact, as the Bee noted “the attorney general’s office did not even analyze what the relevant laws might be in that regard.” The AG let the state Natural Resources Agency decide whether to bring in local law enforcement, a clear dereliction of duty but also a confession that California is unqualified to investigate itself.

The Finance and Attorney General probes tell bureaucrats they can continue to play fast and loose with money and the state’s highest accounting and law enforcement agencies will look the other way. An independent team of competent investigators might well find more hidden money, but that is unlikely in a virtual one-party state where the Assembly Speaker has restricted press access and the Senate boss pulls the plug on television coverage of key hearings. The lesson should be clear: the more power governments wield, the more secretive they become.




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