The California Department of Forestry and Fire Protection kept $3.6 million in a non-standard account without the approval of the state Department of Finance. Articles in the LA Times and Wall Street Journal spell out the details of the account that received settlement funds from companies responsible for wildfires. CAL FIRE’s regulations require that settlement money be deposited into the state’s general fund where it would be available to other state agencies in the regular budget appropriation process.
The account, “Wildland Fire Investigation Training and Equipment Fund”, sometimes referred to as “WiFiter”, was held by the California District Attorneys Association, a non-profit organization. Below is an excerpt from the LA Times article:
The department established the fund with the district attorney’s association in 2005. The association charged a fee to hold the money. The amount of that fee changed over the years. When it began, the prosecutors received 3% of the money when it came in and 15% when Cal Fire pulled money out for training or equipment.
The department used the fund to purchase equipment, such as 600 digital cameras and 26 evidence sheds for $600,000. According to the audits and emails, Cal Fire insisted that the equipment belonged to the association. That led [CALFIRE auditor Anthony] Favro to send an email to [former CALFIRE Director Del] Walters and Janet Barentson, the department’s current deputy chief director, asking, “Isn’t this a gift of public funds?”
The 18% interest taken out of taxpayer funds sounds almost like loan shark rates.
From the Wall Street Journal:
The account came to light as a result of lawsuits filed by Cal Fire and the federal government against Sierra Pacific Industries Inc., a Redding, Calif., lumber company. The suits claimed the massive 2007 “Moonlight Fire” was started by a bulldozer driver at a company hired by Sierra Pacific, which denies any involvement with the blaze.
In 2009, a Cal Fire investigator wrote to Sierra Pacific seeking reimbursement for the cost of fighting the fire, which consumed 65,000 acres of public and private lands in northeast California, according to Cal Fire. The letter asked for payment in two separate checks: one for $7.7 million to the state, and one for $400,000 to a nonprofit that administered WiFiter, according to Cal Fire.
Sierra Pacific refused to pay either bill. The federal government and California proceeded to sue Sierra Pacific in federal and state court, respectively. In the midst of discovery in the suits, the company uncovered the WiFiter account, according to lawyers and Cal Fire.
The account itself was not exactly secret, however it was not public knowledge it was an off-the-books account not subject to the standard state regulations for managing and spending money. We found a memo from former CAL FIRE Director Walters, apparently written in 2009, summarizing the year’s fire season in which he mentioned the account:
Office of Program Accountability (OPA) finalized three audits (Volcan Incident, Wildland Fire Investigation Training and Equipment Fund, and Indirect Cost PCA 99200)…
The current Director of CAL FIRE, Ken Pemlott signed a new agreement with the association in 2011 but froze the fund in August, 2012 after, according to the LA Times, “receiving a briefing from his staff, said Janet Upton, a Cal Fire spokeswoman”.