SLO County DA investigating waste management agency for possible fraud

San Luis Obispo County District Attorney’s Office is investigating allegations of possible malfeasance and fraud at the county’s Integrated Waste Management Authority.
San Luis Obispo County District Attorney’s Office is investigating allegations of possible malfeasance and fraud at the county’s Integrated Waste Management Authority. jjohnston@thetribunenews.com

San Luis Obispo County District Attorney Dan Dow says his office is investigating allegations of possible malfeasance and fraud at the county’s Integrated Waste Management Authority.

Though Dow declined to characterize what his office is investigating, he confirmed that a Public Integrity Unit investigation was spurred by allegations contained in a report by a private investigator who attempted to review the agency’s finances on behalf of an unnamed citizens group.

The Tribune obtained from IWMA a copy of the report by investigator Carl Knudsen and a letter from Dow’s office to IWMA informing them of the investigation and requesting documents under the California Public Records Act that provide insight into Dow’s investigation.

Knudsen said in his report much of his investigation was stymied by the Integrated Waste Management Authority (IWMA) and its manager Bill Worrell’s unwillingness to hand over records. Knudsen reported that there appeared to be a lack of documentation for $445,077 in expenses billed to an IWMA credit card issued to Worrell, that some transactions appeared to “be personal in nature,” that contractors received lucrative IWMA contracts without going through a competitive bidding process and other findings.

Members of the citizens group that paid Knudsen for the report include “friends of Cal Coast News,” a San Luis Obispo County-based news website (also doing business as Cal Coast Times), which lost a $1.1 million libel verdict in March 2017 related to an article it published that alleged a cushy relationship between Worrell and former contractor Charles Tenborg resulted in several crimes.

The website maintains the story’s accuracy and says it would have been the first in a series that would have proved Worrell and Tenborg engaged in fraudulent activities on the taxpayer dime. The website is appealing the libel verdict.

Knudsen’s investigation concluded that official law enforcement agencies should investigate the IWMA due to his limitations as a private citizen. He did not respond to requests for comment.

Worrell did not respond to a request for comment Friday, and an email response from the IWMA stated he is out of the office until Tuesday.

DA’s investigation

On June 28, Deputy District Attorney Michael Frye sent Worrell a letter on Dow’s behalf alerting him of “an investigation currently being conducted by our office” and requesting documents.

Specifically, the letter requested nine years worth of statements and receipts for a credit card issued to Worrell from the IWMA, board meeting minutes related to the purchase of several vehicles and sections of IWMA’s policy manual regarding use of the credit card and retention and destruction of records.

Frye wrote that the letter to Worrell served as a notice that the DA’s Office might seek additional documents, and to request that the IWMA staff not destroy any records until the investigation has completed.

On Thursday, Dow said his office became involved after it received and reviewed the Knudsen report and other information and “determined it was appropriate for us to open an investigation.”

Dow added that the FBI and the California Attorney General’s Office are also in receipt of the same information his office received, though he could not say whether those agencies have opened formal investigations.

The report

According to Knudsen’s report, the “more serious issues” he uncovered involve the relationship between Worrell and Tenborg.

Knudsen wrote that, by his accounting, Tenborg’s hazardous waste transportation companies received roughly $3 million in IWMA funds from 2009 to 2018. He wrote that a Tenborg company continued to rake in funds even after it was reportedly sold to another company.

However, Knudsen reported that he was unable to obtain records from Worrell regarding the IWMA’s contracts with Tenborg’s various companies prior to 2013, which Knudsen said Worrell claimed had been destroyed.

Furthermore, Knudsen found that there were questions about the purchase of trucks and equipment for a “selected few trash-hauling companies in the SLO area” and that some companies received IWMA contracts without competitive bidding.

On Thursday, Dow said he is aware that the report comes from a subjective source and was funded by people with an interest in clearing Cal Coast News’ name. But he said his office is “very careful” when considering a request for an investigation from a non-law enforcement entity when perceived political issues are involved.

“We often get requests (for investigations) from many differing parties, communities and different political camps, if you will,” Dow said. “We take a very measured and cautious approach to ensure we’re objective and only launch an inquiry if we have information that compels us to do so.”

Performance review

On Wednesday, the executive committee of the IWMA, a small group of board leadership that sets agendas, met in closed session to discuss a performance evaluation of Worrell and decided to call a special meeting of the board of directors.

At that upcoming meeting, the board will discuss in closed session allegations against the public official and determine if any action should be taken, according to IWMA Counsel Ray Biering.

That meeting will likely be Aug. 8, and the board will take public comment. Beiring said Arroyo Grande Councilman Tim Brown, a member of the IWMA board, asked it be moved to a sooner date.

There are several issues for the board to discuss, Biering said, including the Knudsen report, allegations made in a letter submitted to the board in April by a former county administrative office staffer who helped form the current IWMA, the DA’s Office investigation and “a series of Cal Coast News articles from (owner) Karen Velie that’s all kind of related to their libel case to Charles Tenborg.”

Even though Biering said he is conducting his own internal investigation, he told The Tribune that the Knudson report is a “hit piece.”

“I’ve gone through many investigative reports, and this isn’t one,” Biering said.

Monica Vaughan 781-7930, @MonicaLVaughan
Matt Fountain 781-7909, @mattfountain1
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