$9 million of industry solar project funds went to Jaguar, timeshares, Disneyland and more – Orange County Register

Taxes on an Industrial City-funded solar farm instead of funding the developer’s lavish lifestyle and raised $9 million in extraneous expenses, including his daughter’s $2 million wedding prosecutors allege in France, his mortgage, a share in Aspen and purchases at Jaguar and Porsche dealerships.

The Los Angeles County District Attorney’s Office spent the first two days of the preliminary hearing for former Industrial City Manager Paul Philips to outline. how little of the $20 million that the Industry is paid has actually gone to project.

Philips is accused of embezzlement of public funds, but so far, prosecutors have not detailed their case against him directly.

Last week, Deputy District Attorneys Joel Wilson and Ana Lopez mainly focused on the bank records of other defendants in case, developer William Barkett and former State Senator Frank Hill, who served as an advisor representing Industry while secretly owning shares of the solar energy company, San Gabriel Valley Water and Power.

Where does the money go?

Bank records subpoenaed by a grand jury show that about $19 million from Industry flowed into accounts controlled by Barkett for development purposes. 450 megawatts solar farm on Tres Hermanos Farm in Diamond Bar and Chino Hills. But only about $7 million of that money goes to subcontractors, consultants, and other firms that do the actual work.

Here’s where prosecutors say most of the remaining public funds went:

• $1.3 million cash withdrawal.
• $120,000 for a bank in the Bahamas.
• $1.8 million for the La Jolla mansion mortgage payment.
• $3.3 million to “foreign entities”, most of which includes payments to a lavish wedding to Barkett’s daughter of the French Riviera.
• $3 million in “general personal expenses.”

Court records in this case and a separate civil case allege Barkett spent about $2 million on his daughter’s wedding. Part of the money went to opera singer Andrea Bocelli and paid for the ceremony at the iconic Hotel du Cap Eden Roc, a popular destination on the South French coast that is considered “a place away from home” “for dignitaries. and celebrities like Winston Churchill and John Lennon.

Personal expenses include payments to Jaguar and Porsche dealerships, Disneyland, a housekeeper, Barkett’s daughter’s law school, time-sharing at Aspen, Barkett’s personal attorney, and contributions contributions to political campaigns and nonprofits, among other high-profile expenditures, according to a list shown in court.

Barkett has previously denied the allegations and stated that he will be vindicated when all the facts come out.

Hill alone, who pitched the idea of ​​the solar farm to Industry Department officials, was paid nearly $700,000 by the city through Cordoba Corp., a company hired to manage the project on behalf of the Department. Industry.

However, Philips does not appear to have received any money from Barkett or Hill, according to the testimony.

Don’t focus on Philips

Philips attorney Joe Weimortz, who partnered with former Los Angeles County District Attorney Steve Cooley on Philips’ defense team, focused the prosecution’s focus on other defendants to challenge the forensic auditor and principal investigator on their investigation of Philips.

When questioned, auditor Ngoc-Giao Phan testified that she did not scrutinize Philips’ bank accounts like other defendants. “That was not the focus of my review,” said Phan.

When asked if she knew of any evidence of payments from Barkett or Hill to Philips, Mary Cenovich, the retired principal investigator on the case, said she did not. “I don’t remember seeing payments from those names to Mr. Philips,” she said.

Although the preliminary hearing has just begun after a scheduled six weeks of testimony, prosecutors have begun to base their argument that Philips did not perform proper due diligence when overseeing the project on behalf of the company. face for Industry.

Cenovich testified about the first day that Philips has signed a number of payment claims that are clearly forged or The bill has changed. Then, on Monday, prosecutors referred to Philips’ handling of the “order register,” a public accounting of payments that must be approved by the City Council, but denied. truncated before they could finish the interrogation.

An analysis of the subpoena register from June 2016 to January 2018 shows what direction prosecutors may take when they return to their next hearing on Tuesday, February 8. shows that while Industry paid the solar company, San Gabriel Valley Water and Power, $20. million for its alleged work on the project, only about $11.5 million of that amount appeared on a register approved by the City Council.

Fake invoice

The board separately approved a revised lease agreement with San Gabriel Valley Water and Power that allows for advances of up to $20 million to reimburse the company for its costs on the public project. But according to the industry’s Municipal Code, any claim for payment must be presented to the City Council for approval or denial at its next regular meeting and must be “certified by the city manager”. or their designated representative that the claims are correct, appropriate and accurate. “About $8.5 million in capital outflows does not appear to comply with that requirement.

According to prosecutors, the requests were also not “accurate, appropriate and correct”. The bills filed by San Gabriel Valley Water and Power significantly overstate the company’s costs. In fact, prosecutors allege the SGVWP was billed only $9 million by its subcontractors, but presented $20 million in fraudulent and fraudulent invoices to justify receiving more money.

The charge of embezzlement of public funds does not necessarily mean that prosecutors will allege that Philips took any of the money on its own. The law may be used against an officer of a public agency in charge of the protection of public funds who, “without the authority of law, appropriate the like or any part thereof, for your own use or for the use of others.”

Cooley, an attorney for Philips, said he was not aware that any payments were missing from the warrant register. Those registrations will be prepared by other staff, he said, and Philips ‘will only stamp his approval after a long series of reviews. The City Council approved the project, he said, and Philips followed through with its decisions.

False assumption

“I don’t think anyone is at fault here, but they’re trying to blame Paul for something he didn’t or couldn’t do,” Cooley said.

Cooley said the district attorneys made few presentations against Philips in the first two days because “they had nothing.” He accused prosecutors of drawing “false conclusions” based on false assumptions about Philips’ involvement.

“Maybe there were wrong bills, but it wasn’t his fault,” he says of his client. “There may be crime there, but Paul Philips isn’t near it.”

Some discrepancies in previous bills are included the city’s attention by a reporter in 2017. At the time, at least $100,000 paid in 2016 was transferred to a custodian for a law firm called “Dongell Lawrence Finney LLP” that had been inactive for more than a year. before the final invoice was issued and this company’s business license was suspended. , according to public records and interviews at the time.

Former managing partner John Lawrence said in 2017 the company had not done any Industrial City-related work in those years, but Barkett had paid outstanding bills “more than three five”.

“It has absolutely nothing to do with Industrial City,” says Lawrence. “The company went down after October 31, 2015. So you can do what you want from there.”

City officials and Wade Hall, the project manager at the SGVWP, claimed at the time that an accounting lapse inadvertently resulted in the former company being listed, while one of the partners was different. , Tal Finney, is consulting privately. A city spokesman delayed inquiries at the time about how the city verifies work back to the SGVWP.

Last week, Cenovich testified that Finney had told her in an interview that he had not sent any bills for his work on the project.