On December 30, 2014, the City of Pasadena released an investigation report prepared by auditing firm KPMG which discloses the theft of millions of dollars from the Cityâ€™s Underground Utility Program administered by the Cityâ€™s Public Works Department.
The KPMG report states on page 7 that the discovery of this fraud resulted from inquires that were made at the City Councilâ€™s Municipal Services Committee on May 13, 2014:
â€œOn or around May 2014, routine inquiry originated from a subcommittee, the Municipal Services Committee (â€œMSCâ€), regarding available funding in the Underground Utility Program. Specific inquiry was raised by the MSC regarding expenditures charged to the UUP under a Miscellaneous project number. In response to the inquiry, Public Works senior management reviewed UUP expenditures charged to the Miscellaneous project number and became aware of questionable expendituresâ€¦â€
As a member of this committee, Terry Tornek has been a vocal and persistent critic of the Cityâ€™s Underground Utility Program.
As the audio recording of this May 13 meeting reflects, the meeting was contentious. Tornek repeatedly questioned and criticized the representations being made by City staff describing them as â€œinfuriatingâ€, â€œirritatingâ€ and â€œdisingenuousâ€.
During the meeting, Tornek also stated the following about the UUP Programâ€™s Miscellaneous Projects account:
â€œI call it a slush fund because thatâ€™s what it is and I object to it.â€
Tornek then advised staff, with the support of Councilmember Margaret McAustin and Mayor Bogaard, that he wanted an explanation what the UUP Miscellaneous projects consisted of. As the KPMG report indicates, senior City staff discovered the fraud as a result of responding to Tornekâ€™s inquiry.
Selected audio excerpts from the May 13 meeting are available on youtube.com at http://youtu.be/rdc4wrsvfBM. The full audio recording of the meeting is available at https://soundcloud.com/councilmember-terry-tornek/may-13-2014-msc-meeting
Terry Tornek stated â€œWhile it is important to remember that we are dealing with allegations that must be proven in court, I will work with my Council colleagues to assist in prosecuting this case to the fullest extent possible and to recoup any monies that may have been stolen. It is clear that the Cityâ€™s accounting procedures were inadequate and existing requirements were not obeyed. This must change to eliminate the risk of theft occurring in the future.â€