Probes aplenty

Jan 25, 2011

State Controller John Chiang, who has been relatively silent lately on the state's budget imbroglio, has switched gears: He announced audits of redevelopment agencies up and down the state, targeting entities that are the subject of Gov. Brown's budget blueprint. 


From the LA Times' Catherine Saillant and Jessica Garrison: "The state will dispatch auditors to towns and cities across California to scour the books of 18 redevelopment agencies to see how officials have been spending the billions of taxpayer dollars they take in each year to improve blight, state Controller John Chiang announced Monday."

"The financial probe comes amid a deepening fight over the future of California's 400 redevelopment agencies, which control about $5 billion in property taxes a year."


More on redevelopment in the Chronicle, the Orange County Register, the Press-Enterprise and the Bee.


Chiang also disputed Treasurer Bill Lockyer's earlier statement that IOUs may be issued by April, if California can't resolve its budget mess. Kevin Yamamura in the Bee has the story.


"But the Department of Finance and Controller John Chiang have never mentioned such an early threat of IOUs, and their projections show the state will have enough cash to last through June even without a budget."


"Chiang said Monday it is too early to tell whether or when the state would need to issue IOUs. "We try to avoid the issuance of IOUs at all costs," Chiang said. "It's an admission that the state can't pay its bills."


Meanwhile, speaking of probes, an investigation is under way into a group that lobbies on issues affecting California's municipal bond market. Tom Petruno of the Los Angeles Times has the story.


"The Financial Industry Regulatory Authority sent a letter last week to firms that are members of CPSA, asking for details on payments they make to the 30-year-old group and how those payments are allocated toward political contributions that the group doles out."


"The six-page letter, which asks for all data since Jan. 1, 2006, “was a surprise to us,” said James Cervantes, a managing director at bond underwriter Stone & Youngberg in San Francisco and CPSA’s current chairman. “Their requests are very broad.”  On its website, CPSA lists about three dozen members, including major brokerages such as & Co., regional bond underwriters such as De La Rosa & Co. and law firms including Orrick, Herrington & Sutcliffe."


In the midst of the states' 'budget problems, there have been discussions nationally about letting the states declare bankruptcy -- something that's not allowed under federal law. The idea is being pushed by Republicans who want to abrogate public-employee union contracts, says the Bee's Dan Walters.


"Former House Speaker Newt Gingrich, a potential 2012 Republican candidate for president, is the most outspoken advocate of allowing states to declare bankruptcy, and some GOP congressmen are reportedly drafting such legislation."


"Why? Officially, they portray it as an alternative to a federal bailout of California and other distressed states. But it's evident that they see bankruptcy as a way of undermining public employee unions by allowing states to abrogate union contracts and perhaps vested pension rights. On Monday, those unions struck back through the Washington-based Economic Policy Institute, a left-of-center think tank closely aligned with organized labor."


The city of Los Angeles, like the state, also faces budget shortages. One solution: Shut down services one day a week. The LA Daily News' Rick Orlov has the story.


"The Los Angeles City Council moved closer Monday to the possibility of shutting down most city services for one day a week to deal with the ongoing budget shortfall.

The city is facing a deficit of at least $40 million in its $7 billion budget from now through the end of the fiscal year in June..."


"The problem we have this year is $40 million and anything we don't deal with will add to next year's problem," Councilman Bernard Parks said. "Anything we do to find permanent savings this year helps us when it comes to next year."


And now, let's look into our "Heavy Metal" file to learn about former wrestling king and Minnesota Gov. Jesse Ventura, who has a titanium hip and keeps setting off the metal detectors at airports. Jesse is not pleased; he's gone to federal court.


"According to the lawsuit, Ventura received a hip replacement in 2008, and since then, his titanium implant has set off metal detectors at airport security checkpoints. The lawsuit said that prior to last November officials had used a non-invasive hand-held wand to scan his body as a secondary security measure."


"But when Ventura set off the metal detector in November, he was instead subjected to a body pat-down and was not given the option of a scan with a hand-held wand or an exemption for being a frequent traveler, the lawsuit said."


"The lawsuit said the pat-down "exposed him to humiliation and degradation through unwanted touching, gripping and rubbing of the intimate areas of his body."


And so it goes...

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