AP Exclusive: Water giant gave $1.4M loan to official
SAN FRANCISCO (AP) — A California public water district that earned a rare federal penalty over what it described as "a little Enron accounting" loaned one of its executives $1.4 million to buy a riverfront home, and the loan remains unpaid nine years later although the official has left the agency, according to records and interviews.
Westlands Water District says its 2007 loan to deputy general manager Jason Peltier — now at $1.57 million with a 0.84 percent annual interest rate — is allowed under agency rules on salary.
[...] experts in governance say the deal raises red flags, not just over the unpaid loan and its generous terms but over whether Peltier and Westlands complied with laws mandating disclosure of the use of public funds.
Westlands, which sells water to big farmers and other landowners in the country's largest public irrigation district, came under scrutiny in March, when federal regulators levied a $125,000 penalty against it over bookkeeping that a Westlands' general manager had described as "a little Enron accounting."
A heavyweight in California water politics, Westlands currently is negotiating two multi-billion-dollar deals with local, state and federal agencies that would reshape water distribution in California, the country's agriculture leader.
Governance experts say public agencies sometimes provide home loans to help recruit executives, but say Peltier's appears unusual because it was extended for years at a fraction of the interest rates of commercial mortgages, the district's various actions on the loan were not disclosed publicly although Peltier is a public official, and the loan will continue for years after he stopped working at Westlands.
California law requires public officials like Peltier to file annual financial disclosure forms, which includes reporting some loans.