FBI Raid Disrupts Cozy 20-Year Relationship Between City Hall and Consulting Firm

Thursday, April 23, 2015
Moving day at Urban Logic Consultants offices in Beaumont.(photo: Kurt Miller, Riverside Press-Enterprise)

The folks at BeaumontGate.org may be biased, but they suspect Beaumont city officials and a consulting firm they’ve done business with for two decades are in big trouble after the FBI and the Riverside County District Attorney’s office conducted multiple raids Wednesday, including a sweep through City Hall.

Investigators also raided Urban Logic Consultants Group, a Palm Desert home owned by City Manager Alan Kapanicas and another site in Temecula. No arrests were made, but hundreds of boxes filled with documents, computers and other items were hauled away. More than a dozen federal agents participated in the raids.

Urban Logic has provided planning and development services to the city of 36,000, 80 miles east of Los Angeles, for 20 years. They also handle financial, engineering and wastewater management services.

The firm’s relationship with city officials is at the heart of the investigation. Until 2009, three of Urban Logic’s principals held top positions at Beaumont City Hall. The company changed hands in 2012 and none of the former officials are still there.

The folks at BeaumontGate, who were entangled in a legal dispute with Urban Logic until recently, describe the history thusly:

“20 years ago a group of men were looking for cities that would subsidize private sector developments with government bonds and they found the City of Beaumont. Today the City of Beaumont has $350 Million in Bond Debt, over $100 Million in Lawsuits, and over $100 Million in Mitigation Fees are unaccountable.” 

Beaumont Citizens For Responsible Growth have been saying things like that on their website for years and in 2010 Urban Logic sued for $3 million to shut them up, according to Banning-Beaumont Patch. The group countered with an anti-SLAPP First Amendment lawsuit and won in 2011. California’s 1992 anti-SLAPP law provides for a special motion to kill a complaint when it’s based on the exercise of petition and free speech rights.  

Urban Logic appealed the ruling that they owed $33,132 in legal fees and lost again in 2012, raising the amount owed to $90,002. The main idea behind an anti-SLAPP action is to stop someone from using the threat of financial harm to prevent free speech.

Last May, Orange County Superior Court Judge David Chaffee told Beaumont it owed $42 million plus interest to the Western Riverside Council of Governments (WRCOG) for contributions it should have made for regional transportation projects since 2005.

The judge had pretty harsh things to say about Beaumont officials:

“The evidence and testimony reveals that city management and staff engaged in a pattern and practice of deception that transcends the typical give and take of dispute negotiation. Had this been a typical civil trial containing allegations of fraud, I would have found fraud by clear and convincing evidence as against the city.”

The city is appealing that ruling, but doing it without City Attorney David Wysocki, who reportedly resigned on April 7.

–Ken Broder


To Learn More:

Beaumont: City Hall, Consulting Firm, City Manager's House Searched (by Craig Shultz, Erin Waldner, David Danelski and Ali Tadayon, Riverside Press-Enterprise)

FBI, DA's Office Serve Warrants at Beaumont City Hall, Urban Logic (by Renee Schiavone, Banning Beaumont Patch)

FBI, Riverside Authorities Raid Beaumont City Hall, Consultant, City Manager’s Home (by Doug Saunders and Joe Nelson, San Bernardino Sun)

FBI, Local Investigators Seize Records, Computers at Beaumont City Hall (by Richard Winton and Veronica Rocha, Los Angeles Times)

Beaumont City Hall Investigation Leads to Palm Desert (The Palm Desert Sun and wire reports)

Urban Logic Finally Pays Beaumont Citizens for Responsible Growth (by Libi Uremovic, Banning Beaumont Patch)

Judge: Beaumont Engaged in Pattern of Deception; Must Pay $42 Million Plus Interest (by Renee Schiavone, Banning Beaumont Patch)

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