Top officials at West Valley Water District kept quiet about HR director’s criminal charges, report says – San Bernardino Sun | #employeefraud | #recruitment | #corporatesecurity


For more than two months, top officials at the embattled West Valley Water District in Rialto knew their human resources director was fighting felony tax fraud charges, yet allowed her to continue working anyway, according to a confidential report obtained by the Southern California News Group.

Former board President Mike Taylor, General Manager Clarence Mansell Jr. and General Counsel Robert Tafoya all were reportedly informed by Deborah Martinez in September 2019 of the criminal case looming over her, the report states. But instead of alerting other board members, it was decided the case was a “personal matter” and the three opted to remain quiet and allowed her to remain in her position.

The report, prepared by the Los Angeles law firm Ivie McNeill & Wyatt, found that the criminal charges against Martinez were not related to the water district, but other findings indicated Martinez lied to colleagues and the media. Additionally, it said that after she was ultimately placed on administrative leave, Martinez was allowed back into her office unsupervised, where she admittedly shredded documents.

Revelations about who knew what and when regarding Martinez’s legal problems are a precursor to a long-awaited state audit expected to be released in June examining allegations of financial mismanagement within the troubled water district, which serves about 82,000 customers in Bloomington, Colton, Fontana, Rialto, unincorporated San Bernardino County and Jurupa Valley in Riverside County.

West Valley Water District offices in Rialto. (Photo courtesy of West Valley Water District).

District tries to block publication

In an effort to block publication of this article, the water district sought a temporary restraining order in San Bernardino Superior Court against the Southern California News Group, accusing the news organization of illegal conduct, violation of Martinez’s privacy and conspiring with a West Valley board member to release the report.

On Wednesday, May 27, Judge Tara Reilly denied Tafoya’s application, finding that the district had no standing to assert a privacy interest on behalf of an employee, or in this case, a former employee.

Reilly also concluded there were insufficient facts to support the district’s claim that SCNG’s possession of the report and publication of its contents was a violation of attorney-client privilege, or that the reporter who obtained the document violated any laws.

Reilly declined to hear argument from Tafoya because, in her mind, it was clear.

“Judge Tara Reilly correctly ruled from the bench that the District’s attempt to silence the press was an unconstitutional prior restraint. The Court’s ruling was compelled by numerous cases making clear that prior restraints on the press cannot be tolerated in a free society,” said Duffy Carolan, attorney for the Southern California News Group, in a statement Wednesday.

“We are pleased the Court so quickly and efficiently recognized the important constitutional issues raised by the District’s extraordinary — and eleventh-hour — request to bar the press from publishing newsworthy information about it and its former human resources manager.”

Criminal case exposed

Although Martinez reportedly informed Taylor, Mansell and Tafoya of her criminal case in September of last year, it wasn’t until Dec. 6, 2019 — when the Southern California News Group learned of the criminal charges against Martinez and her husband, George Martinez, and started asking questions —that newly elected board President Channing Hawkins ordered Mansell to place Martinez on leave and launch an administrative investigation.

The state Attorney General’s Office charged the Martinezes with seven felony counts on Sept. 23, 2019, in San Bernardino County Superior Court. They are accused of failing to report more than $3.6 million in income for the years 2012 through 2015 for their two businesses, Alliance Distributing and Alliance Building Maintenance.

Caltrans had paid the couple more than $5.6 million for mulch in that time period, and Deborah Martinez was responsible for the accounting and record-keeping of both businesses, according to an arrest warrant affidavit. However, she maintained she had hardly any involvement in what she said are her husband’s businesses.

Unrelated to water district

Attorneys from Ivie McNeill & Wyatt, commissioned by West Valley to conduct the administrative investigation, concluded in their 32-page report completed in March that none of George Martinez’s companies solicited work or did business with the district.

 

However, Martinez was not forthright with Mansell about the facts surrounding her arrest and criminal charges and told an investigator she had “very little involvement” in her husband’s businesses when, in fact, she stated on her resume that her annual salary was $84,000, the report states.

Furthermore, Martinez lied to the Southern California News Group regarding who at the district she had told about her criminal charges and, therefore, “directly implicated the district into her criminal case,”  according to the report, which concluded Martinez’s actions justified termination.

Martinez entered into a separation agreement with the district last month, agreeing to nine months of severance, payout of all unused vacation and leave time, and the equivalent of nine months of COBRA health insurance coverage.

Martinez was hired at the district in August 2016 at the recommendation of Taylor, a friend and then board member at West Valley. As a human resources analyst, she was paid a salary of more than $86,000. She was promoted to interim HR director in December 2017, then became the district’s permanent human resources and risk manager in April 2018, according to the report and district documents. She was earning more than $150,000 when she left the district.

Martinez declined to comment for this story.

Criminal charges disclosed

According to the report, Martinez said she informed Taylor, who was then board president, of her criminal charges a few days after they were filed. She said she told both Mansell and Tafoya a week later, on Sept. 30. Tafoya, however, told investigators he did not recall having such a conversation with Martinez, the report says.

Taylor told investigators that when Martinez told him of the criminal charges, he advised her to notify Mansell, the water district board or executive management because he “did not want to be involved,” according to the report.

Mansell told the investigators he called Taylor after Martinez informed him she had been criminally charged, and noted Taylor said he knew about it and believed it “was a personal matter and they should proceed accordingly.” Mansell interpreted that as meaning the issue was not related to district business and, therefore, West Valley officials would stay out of it, the report states.

Documents shredded

On Dec. 6, Martinez received a letter from the water district informing her that she had been placed on administrative leave with pay. The letter spelled out the conditions of her suspension, including a provision that barred her from entering district headquarters when the facility is not open to the public.

However, Mansell told investigators that at about 6:30 p.m. on Dec. 12, he met with Martinez at the district office so she could return work-related items and brief him on pending human resources-related issues.

“Mansell stated Martinez cleaned up her office and he did not remain with Martinez the entire time she was in the office,” the report says.

Martinez told investigators that while she was alone in her office, she sorted papers and shredded some district records, including “working copies” from auditors and salary information. She also left board meeting packets and other documents to he destroyed in an area of the district office known as “the vault.”

The report does not provide details about the purpose of the vault or the amount and type of records Martinez shredded.

No comment

Neither Mansell nor Hawkins would comment on the investigative report. West Valley spokesman Naseem Farooqi said in an email that the report was a “confidential attorney client privileged document” and that the district could not comment further on it.

Allegations of fiscal mismanagement and poor internal controls have long plagued the district, prompting the state Controller’s Office to launch an audit last year. The State Controller’s team plans to publish its review by the end of June, agency spokesman Jennifer Hanson said.



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