When I was just a little girl, the Archer Daniels Midland price-fixing scandal broke. Forever after, my father and I would mutter “bunch of crooks” in unison when we heard their ads on NPR. Today, wonderful people at the SEC tell us that Westlands Water District lied to investors to disguise the fact that they’d rather sell bonds they can’t afford to pay back than raise their water rates. Evidence shows that General Manager Tom Birmingham advised to his board to do some “Enron accounting” and then verified the financial lies in their Official Statement. For this he was personally fined $50K.
- The SEC holding is very clear, very clean writing. If you can follow this blog, you can read the holding itself. You might enjoy that as much as I did.
- Mr. Birmingham should be disbarred for perjury.
- Westlands Water District is broker than it looks from the outside. Without “Enron accounting”, they can barely afford their debt service. I have occasionally wondered how they could afford their very pricey stable of politically connected managers, plus the tens of millions they’ve shoveled into BDCP. Apparently they can’t, not without raising their water rates.
- I wonder how the SEC found this crime and why they pursued it. If you know, please do email me. I would love to hear the story.
My father sent me the breaking article about the SEC fining Westlands and two of their managers. I am sure he’d be happy to append “couple of crooks” to their name, as a cozy father-daughter activity.
It looks like Ms. Schifferle was the person who drew Westland’s illegal activities to the attention of the SEC. Great tactic, great work.
Schifferle said she filed a complaint with the SEC in 2011, and last year sent the agency minutes of a 2010 Westlands finance committee meeting, obtained through the Public Records Act, that discussed the debt ratio and revenue shortfall.
“I thought it was going in the round file,” she said. “Maybe they finally took a look at it.”
This is what comes of Westland’s willingness to make enemies. Making many enemies means having a lot of people out there trying different ways to expose any wrongdoing.