Fresno

Fresno DA: FBI probing ex-Rep. Cox, no charges against Fresno City Council members

In announcing that she would not pursue criminal charges against members of the Fresno City Council for state ethics law violations, Fresno County District Attorney Lisa Smittcamp arguably made bigger news by confirming what had long been rumored: the Feds are in the building.

In a Tuesday evening press release, Smittcamp confirmed that a long-rumored U.S. Department of Justice investigation into the city’s operations with Granite Park is active and on-going.

Smittcamp noted that her office was engaged in an investigation into Granite Park before the Federal Bureau of Investigations requested to take it over.

“Before the investigation could be complete, the Federal Bureau of Investigations (FBI) contacted the District Attorney’s Office indicating
that they would like to take over the investigation, as one of the potential involved parties was a sitting Congressman in the United States House of Representatives,” Smittcamp said in a statement.

In late September, GV Wire reported the FBI was engaged in a multi-faceted corruption probe centering on Fresno City Hall. The focus of the investigation was three-fold: issues related to the lease of Granite Park by Central Valley Community Sports Foundation, the city’s purchase of personal protective equipment to combat COVID-19, and an unspecified land deal.

Cox and business partner Terance Frazier were Treasurer and President in the nonprofit operator of Granite Park, Central Valley Community Sports Foundation. Cox exited as the treasurer of the nonprofit in 2019, midway through his single term in Congress.

The nonprofit was awarded the ground lease and management contract to run the dilapidated baseball park in 2015.

In 2018, Frazier requested the city double its annual subsidy of $150,000. In response to the request, the City initiated an internal audit – which was finalized in October 2018, but publicly released in February 2019.

The audit claimed, among other things, Cox and Frazier’s nonprofit couldn’t provide support for $1.14 million in taxpayer spending, the nonprofit allowed individuals to live on the park premises, and that Cox’s primary business – Central Valley New Market Tax Credits – deposited $50,000 into the nonprofit’s accounts only to be withdrawn by Cox personally on the same day.

In July 2020, Frazier filed a claim for damages with the city totaling $10 million – with $6 million assigned to CVCSF, including Cox. The remaining $4 million was assigned to Frazier himself.

The City rejected Frazier’s demand, forcing him to sue.

In his filings, Frazier listed his damages as “loss of reputation, false light, loss of sponsorship and other consequential damages, and contract damages including the breach of the covenant of good faith and fair dealing” stemming from the audit and its public release. Further, he claimed the audit was racist.

Smittcamp declines charges over Brown Act, procurement claims

Despite that, Council members Esmeralda Soria, Nelson Esparza, Tyler Maxwell and Miguel Arias are in the clear from Smittcamp. 

The allegations spawned from a June 2021 request that Smittcamp’s office investigate a claim that Soria asked the other three council members to join her in private after a closed session meeting to discuss if a deal had been reached between the city and Granite Park operator Terance Frazier – Soria’s fiancee – for a settlement of the suit. 

Soria had recused herself from all discussions regarding Granite Park due to her relationship with Frazier. 

Last June, Fresno lawmakers had been set to approve a $4.3 million payout to Frazier to settle the lawsuit. 

At the eleventh hour, just before Fresno’s City Council could move forward with approving the settlement, Smittcamp announced the probe into allegations of a violation of the Brown Act.

In a press release Tuesday, the Fresno County District Attorney’s Office said it reached its conclusion to not pursue criminal charges because it could not prove beyond a reasonable doubt that Soria violated the Brown Act. 

“Several important factors weighed heavily in this decision, including insufficient evidence to establish that Council member Soria knew that enough Council members were present in the office to form a majority of the City Council when she asked the question, the lack of any evidence that actions were taken based upon the meeting by a majority of the City Council, and the lack of information that Council member Soria specifically intended to deprive the public of information,” the District Attorney’s Office said. 

“Because the subject at issue dealt with a matter about which Council member Soria had recused herself, the District Attorney’s Office remains troubled by the allegation that Council member Soria made such an inquiry. However, based upon the nature of the evidence and confidential information received, the Council member’s conduct does not support a prosecution given the standard of proof for a criminal offense.” 

Along with the decision to not file charges over alleged Brown Act violations, the District Attorney’s Office also announced that it will not pursue violations of Fresno Municipal Code over an order and distribution of personal protective equipment during the COVID-19 pandemic. 

Under Fresno Municipal Code, each councilmember has the authority to enter into purchase contracts up to $50,000 without having to go out to bid. 

Smittcamp’s office discovered that some councilmembers purchased personal protective equipment from MPG Global, LLC, and one councilmember overspent by $18,000. 

“However, it was determined that city authorities knew about the purchases, that they were allowed to go through, and that no disciplinary action was taken against the Councilmember who had exceeded his purchase authority, other than to be reminded that purchases over $50,000 and under $143,000 must be made through the Purchasing Manager,” the district attorney’s office said. 

While the district attorney’s office did not name the Council members who purchased personal protective equipment from MPG Global, Councilman Garry Bredefeld named Soria and Arias as the culprits in an editorial in GV Wire.

The district attorney’s office noted that it is limited in scope and does not extend to matters of city governance unless there are violations of law. The office also said that it is mindful of the extraordinary circumstances of the pandemic which led to the purchase of personal protective equipment. 

Smittcamp offered a critique of Fresno’s in-house legal structure.

“It would be beneficial for the people of the City of Fresno if the Fresno City Council, the Fresno Mayor/Staff, and the Fresno City Attorney’s Office would consider reestablishing their legal advisement process,” Smittcamp said in a statement. 

“Currently, the sitting Fresno City Attorney is hired and fired by the City Council that he/she appointed to serve. An inherent conflict can be assumed from this format. Similar to other important City Administrative positions, it would be well-advised for the City Council to consider changing the City of Fresno Charter to have the City Attorney be hired by the City Manager and Mayor, and be approved by the City Council.”

Daniel Gligich is a reporter for The San Joaquin Valley Sun, focusing on Fresno State Athletics and the southern San Joaquin Valley. Email him at daniel.gligich@sjvsun.com.