Cities, Counties and Special Districts: Is Your Money Safe in the Bank?

If a bank goes belly up or has financial problems your deposits are insured up to a set, pre-determined amount. All of this is in the open and noted to the bank account owners. What happens if the bank account owner is a government agency—what are the rules? What happens if some foreign gangsters take over the account?

“I read with great interest the California Special District Association’s article in PUBLICCEO about protecting special districts from online fraud.  The article is good but fails to mention one of the financial communities best kept secrets: business bank accounts do not have the same protection as personal accounts in terms of getting your money back if stolen from your bank account by cyber criminals.

In other words small businesses, municipalities, special districts, and non-profits do not enjoy the same FDIC protections as individual banking customers. Business customers usually only learn that fact after it’s too late to do anything about it.”

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Cities, Counties and Special Districts: Is Your Money Safe in the Bank?

By Kim Dincel.Public CEO, 7/9/14

Imagine telling your directors at a hastily called, special emergency session of your board that your organization has been an unwitting victim of Corporate Account Takeover (CAT), and that all the money in the organization’s bank account was stolen by Ukrainian cyber thieves.

After your chair reassures the board that a recent audit confirms that there’s been no employee embezzlement, playing the stock market with organization funds, or other inappropriate expenditure of funds by staff or board members, a member of your board asks what’s a CAT and why should we be worried, won’t the bank cover the obvious fraudulent activity?

After the initial shock of the loss, informing the board that the money in the bank – perhaps all the money in your operating account — is gone, and your bank (yes, the bank you’ve had a 25 year relationship with) is telling you they will not reimburse or replace the funds because they don’t have to, and are not liable.  Employees and operating expenses can’t be paid and the organization’s solvency and future once taken for granted, is now in question. Not a pretty picture.

Think it can’t happen to your organization.  Think again.

I read with great interest the California Special District Association’s article in PUBLICCEO about protecting special districts from online fraud.  The article is good but fails to mention one of the financial communities best kept secrets: business bank accounts do not have the same protection as personal accounts in terms of getting your money back if stolen from your bank account by cyber criminals.

In other words small businesses, municipalities, special districts, and non-profits do not enjoy the same FDIC protections as individual banking customers. Business customers usually only learn that fact after it’s too late to do anything about it.

Individual consumer banking accounts are protected under Federal Reserve Regulation E which requires banks to provide reimbursement for certain fraud losses.  Regulation E does not apply to business accounts. Business and commercial bank accounts are controlled by the Uniform Commercial Code (UCC) which has been adopted almost word for word by most states.  In California it is the California Commercial Code (CCC).

Under the UCC, business account holders have far less protection and much higher liabilities for fraud than consumers do for the exact same conduct.  Financial institutions are willing to accept these tradeoffs as individual consumers do not normally maintain the kind of cash deposits that businesses do in their accounts. Additionally, individuals are normally very aware of any unauthorized activity associated with their personal accounts so the risk to a bank is substantially smaller.

It’s an area of the law that is desperately in need of reform.  One of my clients – TRC Operating Company — just fought this battle with its former bank – United Security Bank of Fresno — and was successful in recovering money only because of their persistence and financial resources.  Many municipalities, non-profits, and small businesses are financially devastated after a CAT forcing some of the victims to file for bankruptcy.

Recent examples include:

  • The Western Beaver public school district in Pennsylvania was the victim of a cyber-attack and hit for more than $700,000 from the school’s account at ESB. The funds were apparently transferred in 74 separate transactions over a two-day period.
  • Efficient Services Escrow Group located in Southern California was hit with 3 fraudulent wire transfers totaling $1,558,439 from the company’s account at First Foundation Bank.  They were able to recover $432,215 but were still forced into bankruptcy.
  • Unique Industrial Product Co., a Sugar Land, Texas-based plumbing equipment supply company was the victim of another cyber theft in which $1.2 million was stolen in 43 transfers out of the company’s account in less than 30 minutes.
  • Village View Escrow in Redondo Beach was the victim of a Cyber theft totaling 465,000.00. The funds were apparently transferred in 26 separate wire transactions over a two-day period.
  • JM Test Systems, an electronics calibration company in Baton Rouge lost approximately $97,000 in two unauthorized wire transfers to Russia. They were only able recover $7,200.

What is Corporate Account Takeover?

According to the CBO, Corporate Account Takeover is an evolving electronic crime typically involving the exploitation of businesses of all sizes, especially those with limited to no computer safeguards and minimal or no disbursement controls for use with their institution’s online business banking system.  These businesses, non-profits and government agencies are vulnerable to theft when cyber thieves gain access to its computer system to steal confidential information in order to impersonate the business and send unauthorized wire and ACH transactions to accounts controlled by the thieves.

Municipalities, school districts, large non-profit organizations, corporate businesses, and any customers that perform electronic transfers are potential targets.  Losses from this form of cyber-crime range from the tens of thousands to the millions with the majority of these thefts not fully recovered.  These thefts have affected both large and small institutions.

This type of cyber-crime is a technologically advanced form of electronic theft.  Malicious software, which is available over the Internet, automates many elements of the crime including circumventing one time passwords, authentication tokens, and other forms of multi-factor authentication.  Customer awareness of online threats and education about common account takeover methods are helpful measures to protect against these threats.  However, due to the dependence of institutions on sound computer and disbursement controls of its customers, there is no single measure to stop these thefts entirely.  Multiple controls or a “layered security” approach is required.

What does the CBO Recommend?

In cooperation with other State and Federal regulators, CBO has posted to its web site Best Practices – Reducing the Risk of Corporate Account Takeovers (Best Practices) and other supporting documents.  The Best Practices list nineteen processes and controls within a three-part risk management framework of Protect, Detect, and Respond.  Management and the board of directors should consider each of these nineteen components in a risk management program to mitigate the risk of Corporate Account Takeover.  The processes and controls are broad enough to accommodate the unique needs of every institution and its customers utilizing online banking services.  The Best Practices are not an all-inclusive list and are provided as guidance to assist in implementing the recommended processes and controls to reduce the risk of Corporate Account Takeover theft.

Find more Resources and Online Tools at www.dfi.ca.gov/resources.

Kim Dincel is a principal of the Dincel Law Group.  His practice focuses on litigation in cyber security breach litigation, among other specialties. 

 

Richmond pols continue posturing on underwater mortgages –to steal homes via eminent domain

The city of Richmond, which is working hard to throw out the largest employer in the community, Chevron, is now working on taking over private housing—by force. The City Council wants to use the force of government, eminent domain, to take over any homes that go into foreclosure. Instead of keeping the homes privately owned, the city wants to use tax dollars to become a speculator. This is their way to hit the banks—forcing them to lose money.

Richmond is a city that hates success and freedom—it does all it can to kill jobs, make it expensive to live and the quality of life to be determined by government not the freedom of its citizens. Oh, as other cities found out, after the first theft, no lender will lend in the city—killing off the economy.

“The Richmond council members want their city to partner with another city to form a joint powers authority to reduce the legal and administrative costs involved. But other cities appear wary for many reasons, starting with the fact that San Bernardino and North Las Vegas abandoned using mortgage eminent domain after concluding it would severely harm their real estate economies because lenders would stop making home loans.”

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Richmond pols continue posturing on underwater mortgages
By Wayne Lusvardi, Calwatchdog, 7/18/14

A majority of the Richmond City Council still wants to use eminent domain powers to to seize “underwater mortgages” even though the bond market refused to sell $34 million in municipal bonds for the city last year due to Richmond officials’ interest in the novel proposal.

Prices are soaring in the blue-collar Bay Area suburb. The Zillow.com home price index is up 33.7 percent this past year in the city, reducing the number of homeowners who owe more on their loans than their homes are worth. And some homeowners have already gotten help. Twenty percent of all Richmond homes with underwater loans have had the principal on their loans reduced as of January 2013.

Nevertheless, on July 1, the Richmond City Council voted 4 to 3 to use eminent domain to seize 624 underwater mortgages it has identified from private mortgage lenders so as to prevent future foreclosures.  But to pursue condemnation of the mortgages, the council needed a two-thirds majority, or five votes, making the 4-3 vote symbolic, not binding.

The Richmond council members want their city to partner with another city to form a joint powers authority to reduce the legal and administrative costs involved. But other cities appear wary for many reasons, starting with the fact that San Bernardino and North Las Vegas abandoned using mortgage eminent domain after concluding it would severely harm their real estate economies because lenders would stop making home loans.

Most knowledgeable eminent domain experts don’t believe mortgage eminent domain will meet the legal tests required that such actions can only be undertaken for a broad, necessary public purpose — such as seizing land to build a dam or a police station.

The four council members say they are trying to help constituents who can’t get help from the state or federal governments.

A double-whammy on property taxes

Zillow.com reports that 27.8 percent, or 7,584 homes, in Richmond had negative equity as of March 31, 2014.  The median home price during the mortgage bubble was about $444,000 compared to $314,250 today.  That $129,750 gap could mean nearly $1 billion in negative equity in homes, reflecting a potential property tax decline of $10 million a year.

To compound Richmond’s loss of property tax revenues from over-mortgaged homes, its school districts lost 14.61 percent of their property tax revenue this past year due to the August 2012 Chevron refinery fire, and the city lost $6.1 million in revenue.

“Richmond’s decline was driven largely by the change in the refinery’s valuation. County Assessor Gus Kramer said his office valued the Richmond refinery at about $2.75 billion in 2013-14 compared with around $3.75 billion the previous year. The city as a whole was given a net assessed value of $10.89 billion, a decline of more than $1.86 billion; every other city in the county saw an increase in assessed value,” the Contra Costa Times reported in July 2013.

Chevron paid $2 million in fines after the city sued Chevron for costs of fire, police, environmental clean-up costs.

California Stops Oil Drilling Based on Fantasy NOT FACT–Kills Jobs

There is a potential if you cross the street a bus could hit you. If the state’s Division of Oil and Gas and Geothermal Resources were in charge of traffic they would either stop people from walking or stop the buses from being on the city streets—because it is “possible” someone can get hurt. Using the same THEORY, the State is closing drilling facilities on the basis of potential harm to the water aquifer. NO scientific proof it is happening, though such drilling of oil has gone on over 100 years—in all that time not a “smidgen” of evidence.

California is in a Depression because our very confused Guv Brown bases his policies on junk science and crony capitalism. This is as corrupt as it comes. Literally Jerry Brown is raising the cost of energy and killing jobs—why isn’t the media reporting those facts?

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CA Halts Injection of Fracking Waste, Warning it May Be Contaminating Aquifers

State’s drought has forced farmers to rely on groundwater, even as California aquifers have been intentionally polluted due to exemptions for oil industry.

by Abrahm Lustgarten, ProPublica, 7/18/14

The Story So Far

The country’s push to find clean domestic energy has zeroed in on natural gas, but cases of water contamination have raised serious questions about the primary drilling method being used. Vast deposits of natural gas, large enough to supply the country for decades, have brought a drilling boom stretching across 31 states. The drilling technique being used, called hydraulic fracturing, s

The potential impact of waste from oil and gas drilling — including hydraulic fracturing — on drinking water has been an issue in Texas, Wyoming and, with great urgency, in California this month. Here, a jar of fracking water waste is displayed at a recycling site in Midland, Texas.

California officials have ordered an emergency shut-down of 11 oil and gas waste injection sites and a review more than 100 others in the state’s drought-wracked Central Valley out of fear that companies may have been pumping fracking fluids and other toxic waste into drinking water aquifers there.

The state’s Division of Oil and Gas and Geothermal Resources on July 7 issued cease and desist orders to seven energy companies warning that they may be injecting their waste into aquifers that could be a source of drinking water, and stating that their waste disposal “poses danger to life, health, property, and natural resources.” The orders were first reported by the Bakersfield Californian, and the state has confirmed with ProPublica that its investigation is expanding to look at additional wells.

The action comes as California’s agriculture industry copes with a drought crisis that has emptied reservoirs and cost the state $2.2 billion this year alone. The lack of water has forced farmers across the state to supplement their water supply from underground aquifers, according to a study released this week by the University of California Davis.

The problem is that at least 100 of the state’s aquifers were presumed to be useless for drinking and farming because the water was either of poor quality, or too deep underground to easily access. Years ago, the state exempted them from environmental protection and allowed the oil and gas industry to intentionally pollute them. But not all aquifers are exempted, and the system amounts to a patchwork of protected and unprotected water resources deep underground. Now, according to the cease and desist orders issued by the state, it appears that at least seven injection wells are likely pumping waste into fresh water aquifers protected by the law, and not other aquifers sacrificed by the state long ago.

“The aquifers in question with respect to the orders that have been issued are not exempt,” said Ed Wilson, a spokesperson for the California Department of Conservation in an email.

A 2012 ProPublica investigation of more than 700,000 injection wells across the country found that wells were often poorly regulated and experienced high rates of failure, outcomes that were likely polluting underground water supplies that are supposed to be protected by federal law. That investigation also disclosed a little-known program overseen by the U.S. Environmental Protection Agency that exempted more than 1,000 other drinking water aquifers from any sort of pollution protection at all, many of them in California.

Those are the aquifers at issue today. The exempted aquifers, according to documents the state filed with the U.S. EPA in 1981 and obtained by ProPublica, were poorly defined and ambiguously outlined. They were often identified by hand-drawn lines on a map, making it difficult to know today exactly which bodies of water were supposed to be protected, and by which aspects of the governing laws. Those exemptions and documents were signed by California Gov. Jerry Brown, who also was governor in 1981.

State officials emphasized to ProPublica that they will now order water testing and monitoring at the injection well sites in question. To date, they said, they have not yet found any of the more regulated aquifers to have been contaminated.

“We do not have any direct evidence any drinking water has been affected,” wrote Steve Bohlen, the state oil and gas supervisor, in a statement to ProPublica.

Bohlen said his office was acting “out of an abundance of caution,” and a spokesperson said that the state became aware of the problems through a review of facilities it was conducting according to California’s fracking law passed late last year, which required the state to study fracking impacts and adopt regulations to address its risks, presumably including underground disposal.

California officials have long been under fire for their injection well practices, a waste disposal program that the state runs according to federal law and under a sort of license — called “primacy” — given to it by the EPA.

For one, experts say that aquifers the states and the EPA once thought would never be needed may soon become important sources of water as the climate changes and technology reduces the cost of pumping it from deep underground and treating it for consumption. Indeed, towns in Wyoming and Texas — two states also suffering long-term droughts — are pumping, treating, then delivering drinking water to taps from aquifers which would be considered unusable under California state regulations governing the oil and gas industry.

In June 2011, the EPA conducted a review of other aspects of California’s injection well program and found enforcement, testing and oversight problems so significant that the agency demanded California improve its regulations and warned that the state’s authority could be revoked.

Among the issues, California and the federal government disagree about what type of water is worth protecting in the first place, with California law only protecting a fraction of the waters that the federal Safe Drinking Water Act requires.

The EPA’s report, commissioned from outside consultants, also said that California regulators routinely failed to adequately examine the geology around an injection well to ensure that fluids pumped into it would not leak underground and contaminate drinking water aquifers. The report found that state inspectors often allowed injection at pressures that exceeded the capabilities of the wells and thus risked cracking the surrounding rock and spreading contaminants. Several accidents in recent years in California involved injected waste or injected steam leaking back out of abandoned wells, or blowing out of the ground and creating sinkholes, including one 2011 incident that killed an oil worker.

The exemptions and other failings, said Damon Nagami, a senior attorney with the Natural Resources Defense Council in an email, are “especially disturbing” in a state that has been keenly aware of severe water constraints for more than a century and is now suffering from a crippling drought. “Our drinking water sources must be protected and preserved for the precious resources they are, not sacrificed as a garbage dump for the oil and gas industry.”

Still, three years after the EPA’s report, California has not yet completed its review of its underground injection program, according to state officials. The scrutiny of the wells surrounding Bakersfield may be the start.

 

Justice Delayed for Everyone in Santa Barbara

If you are a criminal in Santa Barbara or if you are being sued for fraud, the “Justice” system is so over whelmed you get months or years before a trial can happen. That means lots of settlements and pleas bargains—since jails are crowded, much less chance of any jail time! The bigger issue is that under the law, criminal cases take priority over civil cases. In fact, it means added months before your lawsuit is heard—even the filing of the paperwork is behind by months. Government is failing us in every way, including in the area of “justice”.

“Here’s a snapshot of how these budget cuts are playing out in the local court system:

» Civil judgments are running more than five months behind.

» Child custody mediations that once took three weeks to schedule now take five weeks.

» Divorce judgments are more than six months behind.

» Courts have a 26-percent vacancy rate in personnel.”

Washington DC - Federal Triangle: Robert F. Kennedy Department of Justice Building

Justice Delayed in Santa Barbara

Mission & State Report: Investigation reveals that civil judgments are months behind and court documents are stacking up unchecked as budget cuts hit hard in local courts

Hours at the clerk’s office at the Santa Barbara County Superior Court have been reduced as a way to cope with budget cutbacks.

By Joshua Molina, Mission & State, 7/17/14

“We’re beyond cutting to the bone; we’re amputating limbs,” said Darrel Parker, executive officer for the Santa Barbara County Superior Court. (Joshua Molina / Mission & State photo)

Santa Barbara County plans to shut down its Juvenile Court near Goleta, close court services in Solvang, and unexpectedly slash nearly $200,000 from its budget this year.

The moves are the latest wave of major budget cuts that officials say have devastated the court system here and around the state.

The courts in Santa Barbara County have a $27.2 million budget this fiscal year — down from $42 million in 2009, a 35 percent reduction.

Although Gov. Jerry Brown has worked to turn around the state’s budget woes, the court system has continued to suffer, and that reality is playing out every day in Santa Barbara County.

“We’re beyond cutting to the bone; we’re amputating limbs,” said Darrel Parker, executive officer for the Santa Barbara County Superior Court. “It’s getting worse every day. On a scale of one-to-10, it’s a 10.”

Here’s a snapshot of how these budget cuts are playing out in the local court system:

» Civil judgments are running more than five months behind.

» Child custody mediations that once took three weeks to schedule now take five weeks.

» Divorce judgments are more than six months behind.

» Courts have a 26-percent vacancy rate in personnel.

» The various clerk offices close to the public at 3 p.m. instead of 4:30 p.m.

All of this translates into real-life problems for the public.

The delays in divorce judgments hurt adults who need an official statement from the court to remarry, enroll in new health benefits, and move on with their lives.

Later this year, the county plans to close the Juvenile Court in Goleta and transfer services to Santa Barbara and Santa Maria.

It also will reduce traffic-court services in the Solvang to one day a week, meaning people who get speeding tickets in Solvang and the Santa Ynez Valley will have to go to Lompoc to challenge them.

More bad news arrived at the courts this week. Parker will have to find a way to cut an additional $193,000 from his 2015 budget because of a financial error by the state that affects all counties. Statewide the, shortfall is $22.7 million.

“I don’t know yet how I am going to deal with it,” Parker said.

Parker said he is considering closing one of the security lines at the Figueroa criminal court building in downtown Santa Barbara.

Currently there are two security lines to check for weapons, intended to separate attorneys from getting screened alongside people they may be facing in court. All people, except for judges, may have to use the same line, if Parker goes that route.

With payroll accounting for 81 percent of the budget, an unfunded pension and health-care liability of $512,000, and the cost of health benefits rising by $90,000 next year, the local courts don’t have any fat to cut, Parker said.

The latest budget blows follow a pattern of cutbacks that have steadily eroded the court system locally and statewide, and delayed justice for litigants along the way.

In Santa Barbara County, one in four court administrative and clerical positions are unfilled, which means those who remain are doubling or tripling up on their workloads, officials said. At one time, judges each had their own secretaries, but now they share administrative staff.

Clerical workers struggle to keep up with the paperwork filed by both lawyers and self-represented litigants, a situation that often leads to mistakes and ultimately delays in court. Judges often are left with no choice but to delay court proceedings because litigants and lawyers did not fill out the paperwork properly or didn’t fill it out at all.

“At a 26 percent vacancy rate, you can’t keep up with the work,” Parker said. “Continuances occur because documents don’t make it to calendar on time. Those things happen every day.”

Court records and documents often sit untouched because clerical staff has not had time to get to it. Counter workers will accept the paperwork at the counter, but there is no staff to process the paperwork on the back end.

To help fight the backlog, the courts have decided to cut the counter hours by 90 minutes per day. Instead of closing at 4:30 p.m., the courts close the records and clerk counters at 3 p.m. Although the doors close to the public at 3 p.m., clerical staff works another two hours — just to catch up.

A person taking public transportation might have to get off work as early as 2:30 p.m. just to make it to the courthouse on time to file a document.

“It’s a pain in the neck,” Parker said. “It gives us two hours of downtime to get caught up without interruption.”

The backlog is so bad that the courts no longer have the time to purge records. Instead, the records stack up behind the desks and counters at the courthouse and in storage units. The courts pay $49,000 a year to store old files.

“We no longer purge records,” Parker said. “We just stopped doing it.”

Files 5-feet high are stacked up in the back of the clerks’ office because they have not been processed or digitized.

“There’s a slow degradation in the quality of justice and the access to justice,” said George Eskin, who retired as a full-time judge in 2013, but still takes occasional cases in Santa Barbara, Ventura and San Luis Obispo counties. “Nothing happy happens in a courthouse. Everyone who comes here is wounded.”

Eskin said he has seen people break down sobbing because the doors are closed when they need to file paperwork.

Among the biggest hits to the court system is in the area of family law, which includes divorces and child-custody issues.

“We’re the red-headed step-child of the court system,” said Vanessa Kirker Wright, an attorney with nearly 20 years of family law experience in Santa Barbara County. “We’re in the dinosaur ages.”

In 2013, the court saw 1,732 family law matters, 781 in Santa Barbara and 951 in Santa Maria. More than 400 of those were domestic-violence cases.

Of the cases in Santa Barbara, 522 included self-represented litigants. In Santa Maria, the number was 621.

The courts have a hard time keeping up with that volume.

“It takes a lot longer to get a simple judgment through,” Kirker Wright said.

The attorney and others said that the loss of institutional knowledge has wrecked much of the previous harmony of the court system.

Experienced clerks who knew how to read the forms could easily let attorneys or self-represented litigants know if there was a problem with the documents. Now that doesn’t happen, which leads to delays when the matters come up in court.

Kirker Wright said that in divorce cases, where families often rip apart their personal lives over finances, property and children, cuts to services in family law affect the most vulnerable.

“You see people at their worst pretty constantly,” Kirker Wright said. “Custody issues are the most difficult.”

Family law Judge Thomas P. Anderle sees it every day in court. Many of the people who come before him are self-represented. He frequently must continue a case because the litigants have not filled out the paperwork correctly or paperwork has not been processed.

“They come to court hoping to get something resolved and it’s not,” Anderle said. “I can’t process a case if I don’t have the information I need. In the old days we had people who could work with people on these forms. These family law forms are complicated.”

Anderle said the courts should be there to facilitate a process that is already extraordinarily difficult and emotionally taxing on those going through it.

“A lot of these cases involve kids,” Anderle said.

Too often, he said, he sees people simply get frustrated with the system and check out, which defeats the purpose of seeking a court resolution.

“I think family law gets hit the most because of the emotional harm it causes,” Anderle said. “There’s this feeling of raw emotion. These people are mad at each other. The people in family law get hurt the most when there are these cuts.

“They get cut twice, once in their personal lives and again in the judicial courts.”

Barbara Liss, a probate paralegal and member of the Santa Barbara Paralegal Association, advocates on behalf of paralegals to boost the court system. Paralegals, who work either for attorneys or by themselves on court matters, interact with the courts and court clerks on a daily basis.

“I am really worried about the courts losing more staff,” she said. “They are losing the most experienced staff. The cumulative knowledge is bereft in the system. There’s a higher level of mistakes and a slower process.”

She said the state and the governor need to prioritize the courts again.

“Money needs to trickle down to the trial court system and not stay in Sacramento,” Liss said.

“If you can’t get orders out quickly, you don’t have justice served,” Liss said. “Everybody needs the courts. The public is not getting the benefit of their constitutional rights to the courts, and that is the state government’s fault.”

With little resolution in sight, some court officials believe technology may be the answer.

Judge Eskin said the public would benefit if the court invited an independent audit of its case-management calendar system. With fewer staff people, officials could streamline the process by improving technology, he said.

Eskin noted that behind the scenes in the courthouse, desks are unoccupied, whole offices are empty, and “cases often don’t appear on calendar.”

“Now one person is doing the job of three,” Eskin said. “Mistakes happen when people are overworked.”

Many of the court officials are particularly peeved about Brown’s decision to strip courts of their reserves. The courts used to have $10 million in reserves, but the state mandated that the courts could only keep a reserve of 1 percent in its budget.

The courts need a culture change in attitude, Eskin said.

“My biggest frustration was the resistance to considering change,” he said. “My biggest frustration was trying to figure out if there’s a better way to do things.”

It’s a question that Parker is also trying to answer.

“One of the things we have to do is provide services in a different way than we have in the past,” Parker said.

He hopes to move quickly to digitize court records and allow the public to have more access to documents online.

For now, though, little relief is in sight.

“We’re faced with further reductions,” Parker said. “We’re amputating limbs and applying tourniquets to stop the bleeding.”

— Joshua Molina is a senior reporter for the Mission & State in-depth journalism project.

 

Pelosi Son Ran Firm Owned/Controlled Illegally by Convicted Criminals

It is always good to have a famous last name. It opens doors and protects you from media coverage when you skirt the law. Paul Pelosi, Jr., son of San Fran Nan—who does not support the Rule of Law, does support the lawlessness of the President and Attorney General (he allowed guns to be sold to Mexican drug cartels—and is still the Attorney General instead of a prisoner in the Federal penitentiary).. Paul owned 10,000,000 shares in Natural Blue Resources—a firm that funded environmentally friendly businesses—a firm the Security and Exchange Commission now finds was illegally owned by a pair of convicts.

Note the Times, Chron or Bee (of any variety) has not made this a FrontPage story, asked about what did San Fran Nan know and when, and if she was advising her son in running the company.

“The SEC said Wednesday the company was “secretly controlled” by James E. Cohen and Joseph Corazzi, both of whom had previous fraud convictions. Corazzi violated federal securities laws and was barred from acting as an officer or director of a public company. Cohen was previously incarcerated for financial fraud.

Cohen and Corazzi said they were “outside consultants,” but according to the SEC, they actually controlled Natural Blue’s business decisions “without disclosing their past brushes with the law to investors.” The pair made hundreds of thousands of dollars off the company.”

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Company Cofounded by Paul Pelosi Jr. Charged with Securities Fraud

SEC: Environmental investment company Natural Blue Resources run by criminals

BY: Elizabeth Harrington, Washington Free Beacon, 7/17/14
The Securities and Exchange Commission (SEC) charged a company cofounded by Paul Pelosi Jr. with fraud on Wednesday after learning that two convicted criminals were running the business.

Paul Pelosi Jr., the son of House Minority Leader Nancy Pelosi (D., Calif.), was the president and chief operating officer of Natural Blue Resources Inc., an investment company he cofounded that focuses on “environmentally-friendly” ventures.

The SEC charged four individuals with fraud, including former New Mexico Gov. Toney Anaya, and suspended trading in the company’s stock. Pelosi owned over 10 million shares in the company in 2009.

The SEC said Wednesday the company was “secretly controlled” by James E. Cohen and Joseph Corazzi, both of whom had previous fraud convictions. Corazzi violated federal securities laws and was barred from acting as an officer or director of a public company. Cohen was previously incarcerated for financial fraud.

Cohen and Corazzi said they were “outside consultants,” but according to the SEC, they actually controlled Natural Blue’s business decisions “without disclosing their past brushes with the law to investors.” The pair made hundreds of thousands of dollars off the company.

“Cohen and Corazzi concealed their involvement through a so-called ‘consulting’ agreement, but their influence over the issuer spread much further,” said Andrew J. Ceresney, director of the SEC’s Enforcement Division. “Investors in Natural Blue had a right to know who was running the company behind the scenes.”

The SEC suspended trading in Natural Blue stock. A notice filed in the Federal Register on Wednesday by Jill M. Peterson, assistant secretary of the SEC, revealed that the company has not filed any periodic reports, which are required by law, with the SEC in four years.

“It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Natural Blue Resources, Inc. because it has not filed any periodic reports since the period ended September 30, 2010,” Peterson said, in the order announcing suspension of trading.

Cohen, Corazzi, Anaya, and Erik Perry, a former executive at Natural Blue, were all charged with federal fraud violations. Anaya, who was Governor of New Mexico from 1983 to 1987, and Perry “misled investors by failing to disclose that Cohen and Corazzi were running the company in spite of their criminal or disciplinary histories,” the SEC said.

“Natural Blue and its officers attempted an end-run around the rules designed to prevent recidivists from getting their hands on the controls of public companies,” said Paul Levenson, director of the SEC’s Boston Regional Office.

“While Natural Blue was ostensibly led by Anaya and subsequently Perry, management decisions made by Cohen and Corazzi resulted in no revenues or viable business operations for the company,” the SEC said. “Anaya and Perry each deferred to Cohen and Corazzi in derogation of their responsibilities.”

The SEC said Natural Blue made “various material misrepresentations about the company, its contracts, and its anticipated revenue in a February 2011 press release as well as on a website and verbally to investors.”

There is some dispute over Paul Pelosi’s current connection to the company.

The New Mexico Office of the Secretary of State Business Service Division currently lists Natural Blue as a company “not in good standing,” with Pelosi listed as its president.

Pelosi cofounded the company in 2009. The SEC said Natural Blue’s mission is to “create, acquire, or otherwise invest in environmentally-friendly companies, including an initiative to locate, purify, and sell water recovered from underground aquifers in New Mexico and other areas with depleting water resources.”

According to Bloomberg Businessweek, Pelosi served as president and chief operating officer of Natural Blue Resources, Inc. until January 11, 2010. Joseph Montalto is listed as the current president.

However, the Mountain View Telegraph cited Pelosi as Natural Blue’s president last year, and Anaya was still leading the company as chairman and CEO at this time.

Pelosi and Natural Blue Resources could not be reached for comment.

Anaya will be barred from participating in any penny stock company for at least five years, and fined an amount to be determined later. Perry also settled with the SEC, agreeing to pay $150,000 fine, and permanently banned from serving as an officer or director of a public company and from participating in any offerings of penny stock.

 

Socialist Rob Reiner Using Ballot to Kill Consumer Choices in Malibu

Rob Reiner, aptly nicknamed “The Meathead”, believes a woman has the right to abort a baby, but NOT choose where to buy her clothes. Reiner, who financed the slush fund for those interested in the Nanny State (California First, high taxes and bigoted government) now is using the ballot to tell residents and tourists in Malibu what stores are allowed to compete in this water edge town. Isn’t that what Castro does?

Not only is he limiting consumer choice, he is limiting job opportunities. Freedom is not in his vocabulary—this is a man that by his actions believes people are the slaves to the master of government. Do you trust Rob Reiner to make your consumer decisions? Then again, he is VERY rich—and you are not.

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Voters to decide Reiner’s Malibu anti-chain measure

BY JOANNA CLAY, LA Register, 7/16/14

Actor and director Rob Reiner seeks donations for a 1988 anti-smoking campaign. Reiner is currently supporting a measure that would limit new chain stores in Malibu.

Chain of events

Later in the night, the city council voted 5-0 to adopt its own formula retail – or chain – ordinance, which the city has been working on since 2006. It would put a cap of 45 percent chain stores – with exceptions such as movie theaters, drugstores, banks etc. – in the city’s Civic Center commercial core.

MALIBU – Actor and director Rob Reiner has been pushing an anti-chain store ballot measure for months, but discussion over the proposal got contentious at this week’s City Council meeting.

Councilman Lou LaMonte said the measure avoided the usual public input and revision because of the celebrity’s involvement.

“Basically, it took a shortcut through Rob Reiner’s living room,” LaMonte said. He added that a group of people found a “well-meaning, deep-pocketed celebrity” to finance their idea.

“Wow, that’s not what happened, man,” Reiner retorted.

It was part of a two-hour debate Monday before the council voted 4-1 to put the measure on a special election ballot in November. Councilwoman Joan House dissented.

Proponents of the measure say chains are ruining Malibu’s charm as a rural, residential community. In the last couple of years, Malibu lost 50 locally owned stores that were replaced by chains, proponents said.

Opponents, such as real estate agent Paul Grisanti, questioned if the measure would incite litigation.

“Obviously you can see there’s a lot of passion running on both sides of this,” Reiner told the council. “You guys are not here to debate the initiative. There’s enough time for that.”

If voted through, the measure would restrict chain stores – with exceptions like banks or drugstores. It also would require voter approval of specific plans of large-scale commercial or mixed-use developments.

The county verified 1,400 of the signatures collected, which is more than the 15 percent of voters required to get on the ballot. Proponents say they gathered 2,300 signatures.

Council members voiced concern about the divisiveness of the measure. LaMonte brought up legal concerns.

“In two weeks (the city attorney) found 35 pages worth of flaws in the initiative,” he said. “I can imagine what a Wilshire Boulevard firm with 300 partners is going to find.”

Proponents said they would pay the cost of the special election.

 

Good News!! LA Councilman Gill Cedillo Lied and Traffic Safety is Improved

Gil Cedillo, the man that believes you should be rewarded for breaking our Federal laws, told his District, elect me and I will bring you miles and miles of bike lanes. For some reason, now he realizes that to do this would harm traffic flow and be dangerous for the community, drivers and bikers. By narrowing the car lanes, both drivers and bikers are put at risk for the Leftist goal of forcing people to ride bikes to work-10-15 miles from home.

“What happened? City Councilman Gil Cedillo announced that despite a thorough two-year campaign by cycling advocates, he is discontinuing work on northbound and southbound bike lanes planned for a three-mile stretch of North Figueroa Street, the Times reports.

His excuse? Cedillo reportedly claims he is worried that the loss of a single southbound car lane on Figueroa would slow down emergency vehicles, despite the fact that it practically runs parallel with the adjacent 110 Freeway.”

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Bike lanes scrapped by politician’s broken promises

As Los Angeles slowly but surely tries to wean itself off its unsustainable addiction to the car, some politicians continue to stand in the way of progress, even if that progress is an 18th century technology.

Scott Bridges, LA Biz Journal, 7/17/14

As Los Angeles slowly but surely tries to wean itself off its unsustainable addiction to the car, some politicians continue to stand in the way of progress, even if that progress is an 18th century technology.

More than 200 miles of L.A. streets have been redesigned during the last half-decade, as The Los Angeles Times points out, as elected leaders have added new bike lanes even at the cost of car lanes. But the progress came to a halt last week in northeast L.A., where transportation planners had hoped to connect Highland Park with Eagle Rock and other area neighborhoods with a looping system of lanes.

What happened? City Councilman Gil Cedillo announced that despite a thorough two-year campaign by cycling advocates, he is discontinuing work on northbound and southbound bike lanes planned for a three-mile stretch of North Figueroa Street, the Times reports.

His excuse? Cedillo reportedly claims he is worried that the loss of a single southbound car lane on Figueroa would slow down emergency vehicles, despite the fact that it practically runs parallel with the adjacent 110 Freeway.

According to the Times, transportation officials estimate that the addition of bike lanes would increase southbound commute times by 47 seconds. And the stuff about slowing down police cars — Cedillo says he heard that from a cop.

Cedillo reportedly went on to dismiss cyclists as a “microscopic percentage” of the city’s population, utterly failing to realize that they will remain such until steps are taken to make cycling a more viable option.

He said that bicycle coalition was essentially too small a group of people “to set an agenda.” Now, regardless of the dire necessity to shift away from a carbon-emitting transportation system, the irony of a single person standing in the way of a major city’s agenda was apparently lost on the councilman.

Bicycle advocates point to the fact that Cedillo made bike lanes part of his 2013 election campaign and that he is breaking a promise to the people who put him in office. One activist reportedly went to Twitter to accuse Cedillo of supporting “fast cars and dead kids.”

“We’re going to have to get in his face non-stop, constantly,” Josef Bray-Ali told the Times. Bray-Ali is owner of the Flying Pigeon bike shopon Figueroa and a resident of Cedillo’s District 1. He reportedly let Cedillo use his store as the backdrop for campaign photographs.

“I don’t want to live in a neighborhood with unsafe streets anymore. I’m not cool with the status quo, and I’m not going to back down,” Bray-Ali told the newspaper.

Figueroa is part of the city’s Bicycle Plan, a bold vision set forth in 2011 to carve out some 719 miles of planned bike lanes. However, the recent actions of some city officials demonstrates “a great reluctance to follow through on the city’s commitment” to that plan, Eric Bruins, planning and policy director for the Los Angeles County Bicycle Coalition, told the newspaper.

The addition of dedicated bike lanes, advocates argue, will create more riders, thereby reducing the number of cars on the road, and reduce the number of accidents in an area that has had more than its fair share of vehicle-versus-bicycle crashes.

Opponents, the Times reports, say there are too few cyclists on the road — again, missing the point that no one wants to ride a bike in a car lane, particularly one that functions as an alternative to the freeway.

 

Why is California so Expensive? Irrational “Green” Policies

Thanks to environmentalists, California is the number one State for “Clean technology Leadership”. It is also number one for high taxes, jobs leaving the State, high cost of energy and food. This is a State where being in the 1% does not assure you can afford the State. Green laws are passed to make believe we are helping the environment—the State has changed the designation of janitors to environmental workers—same for garbage collectors. This is a phony State. We prefer to pretend we are doing well, while assuring government makes it harder for the middle class and poor (but illegal aliens are first priority)

Policies meant to make donors and special interests rich also make us number one on this index—California is also number one on the index of “Most Gullible” State in the nation.

“San Diego moved up four spots to number three among the 50 largest American cities. San Francisco and San Jose rank just ahead of San Diego. Sacramento and Los Angeles are ranked just behind.

The survey measured a host of different indicators including renewable energy, clean-tech policies and clean-tech investment.”

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San Diego And California Dominate Clean Tech Lists

By Erik Anderson,KPBS, 7/17/14

2014 U.S. Clean Tech Leadership Index

 

San Diego and California both scored well in the latest national survey of clean-tech activities. Five of the top seven cities in the survey are in the Golden State.

California held onto its No. 1 ranking among states for the fifth consecutive year in the Clean Tech Leadership Index report.

San Diego moved up four spots to number three among the 50 largest American cities. San Francisco and San Jose rank just ahead of San Diego. Sacramento and Los Angeles are ranked just behind.

The survey measured a host of different indicators including renewable energy, clean-tech policies and clean-tech investment.

Ron Pernick runs Clean Edge, the research firm that put together the report and he said clean-tech has a firm foothold in California.

“Not only are people pursuing climate friendly policies more increasingly in certain state’s and regions, but also prices are coming down,” Pernick said.

Lower prices, according to Pernick, make it easier for people to install solar, buy electric vehicles, or build energy friendly structures.

 

Obama Kills Fulltime Jobs—Democrats have Plan to Kill Part Time Jobs

Since Obama has been president approximately 70% of all the jobs created have been part-time jobs. Thanks to ObamaCare, most small businesses cannot afford the cost of health care, so full time workers became part time. Many restaurants ended full time workers and keep the employees under 30 hours a week.

Now the Congressional Democrats are going to make it difficult to hire and keep even part time workers—new riles and costs. The winner in all this are the robots and those that make them—from making hamburgers to taking orders—humans have no value. Why is real unemployment in the nation 12.1%–and we have historically high non labor participation rate.

“Very often workers get fired when they would like to talk about their schedule, and the owner exercises his complete authority and power and says, ‘You’re fired.’ That’s got to stop. That’s not good for the business enterprise,” Miller said in an interview with KQED Wednesday (audio embedded below).

His proposal would also require companies to pay their employees for an extra hour if they had less than 24 hours notice of a schedule change. It also guarantees that part-time workers would be paid for at least four hours of work when they are sent home early.”

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Rep. George Miller Proposes New Rules for Part-Time Work

KQED News Staff, 7/17/14

Unpredictable hours and low pay are just some of the challenges that face part-time employees in the modern U.S. workforce. About 7.5 million people nationwide say they’re working part time only because their hours were cut back or because they were unable to find a full-time jobs. And the number of these “involuntary” part-time workers increased by 275,000 people in June, according to the Bureau of Labor Statistics.

During the recession, the number of involuntary part-time workers skyrocketed. Since then, things have improved. But there are still almost double the amount involuntary part-timers now as there were in 2007.

San Francisco recently passed an ordinance that lets employees ask for predictable work schedules without fear of retaliation. Last month President Obama ordered federal agencies to grant employees the right to request flexible schedules. Now, East Bay Congressman George Miller plans to introduce a bill that would extend those protections nationally, barring employers from denying workers’ requests for time off because of a caregiving or school-related conflicts unless there is a provable business reason.

“Very often workers get fired when they would like to talk about their schedule, and the owner exercises his complete authority and power and says, ‘You’re fired.’ That’s got to stop. That’s not good for the business enterprise,” Miller said in an interview with KQED Wednesday (audio embedded below).

His proposal would also require companies to pay their employees for an extra hour if they had less than 24 hours notice of a schedule change. It also guarantees that part-time workers would be paid for at least four hours of work when they are sent home early.

“In some cases workers show up for jobs — they may have commuted an hour, an hour and a half to get there. Spent money on transportation and then be told we don’t need you today,” Miller said. “So what we’re suggesting is, first of all, employees can’t be retaliated against for simply requesting a more flexible or predictable schedule, and that if a worker arrives at work ready to go to work, and then you say that you don’t need them, that they get at least four hours of pay.”

Business associations have been vocal about opposing such regulations, saying they will hurt profits and ultimately the ability to create jobs. The New York Times reports that restaurant and retail groups say the proposals turn employee scheduling into an onerously bureaucratic process:

“The hyper-regulation of the workplace by government isn’t conducive to a positive business climate,” said Scott DeFife, an executive vice president of the National Restaurant Association. “The more complications that government creates for operating a business, the less likely we’ll see a positive business environment that’s good for the economy and increasing jobs.”

Mr. DeFife pointed out that the daily ebb and flow of customers necessitated flexibility in scheduling.

David French, a senior vice president of the National Retail Federation, said many people chose careers in retail because of the flexible work hours.

“These proposals may sound reasonable, but if you unpack them, they could be very harmful,” Mr. French said. “Where employers and employees now work together to solve scheduling problems, you’ll have a very bureaucratic environment where rigid rules would be introduced.”

 

Santa Barbara Police: Illegal Aliens OK—Over Watering Lawn Now a Crime

What will the Santa Barbara police do if they find an illegal alien landscaper over watering your lawn? They will give a ticket to the homeowner, worth a $1,000 fine, then give a pat on the back to the illegal alien costing taxpayers tens of thousands of dollars each year. As my friend Dr. Stan Monteith says, “the world has gone crazy!” In Santa Barbara the taxpayer pay for police to monitor your watering and water use habits—and leave the criminals to do as they please.

The craziness is that the public does not seem concerned or upset. Why are decent people leaving California? Because the cops refuse to do their job.

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Santa Barbara cracking down on water criminals during historic drought

By Randol White, KCBX, 7/17/14

Cachuma Lake, Santa Barbara’s main water source is rapidly disappearing.

The City of Santa Barbara is getting far more serious about water theft in light of the ongoing drought crisis.

The city’s police and public works departments are joining forces to put pressure on those who steel the precious commodity.

The act of unlawfully taking water is now considered a misdemeanor that comes with a fine of $1000.

Water Systems Manager Cathy Taylor says, sadly, this type of crime is nothing new.

“Water theft is always a concern and we have always had water theft, but now that our supplies are dwindling it’s more of a concern,” said Taylor.

Examples of theft would include water trucks filling up without using a meter, altering or disconnecting your meter at your home or business, or tapping into a vacant property’s water system.