Palm Springs Mayor Steve Pougnet announced in May that he would not seek re-election in the fall because of “speculation and innuendo” surrounding his activities with a local real estate developer.
The mayor wrote in his statement, “I’d like to directly address those accusations and misstatements with you,” but he did not. Pougnet briefly dismissed them as “dirt” generated by political enemies and the Desert Sun newspaper, and admitted, “Like all my colleagues on council, I also work for a living.” He defended his integrity before extolling, at length, his accomplishments as mayor.
The FBI and Riverside County District Attorney’s office, both members of the Inland Empire Public Corruption Task Force, apparently would like to learn more.
On Tuesday morning, both descended on Palm Springs City Hall with warrants in hand and spent the day packing up boxes of stuff. They also dropped by an apartment listed in Pougnet’s name seeking documents and eventually met with the mayor himself. The Desert Sun reported that the FBI said it took items that were in his possession.
City hall was closed for the day. No one was arrested. The warrant remained sealed and there were no official statements about the particulars of the investigation.
Pougnet was elected to the city council in 2003 and has been mayor since 2006. He worked as a consultant for developer Richard Meaney while mayor, which the Desert Sun said was not widely known until it started writing about the city’s redevelopment agency last year.
California began shutting down local redevelopment agencies across the state in 2012 amid multiple lawsuits over how to divide up their assets. Localities were allowed a certain amount of leeway in crafting divestment policy. Palm Springs allowed adjacent landowners to buy properties without assessments or open-market bidding to facilitate lot consolidation for development purposes. The state Department of Finance signs off on the deals.
According to the Desert Sun, Meaney bought two of those properties last year while Mayor Pougnet was jointly in his employ as consultant at a company called Union Abbey. Meaney and another investor paid $1 million for one property and $195,561 for another. The second property, which Pougnet voted to approve, was originally purchased by the redevelopment agency for $575,000 in 1987.
The Desert Sun said the mayor admitted that vote was a mistake when the newspaper questioned him about it. He recused himself when the vote was reversed shortly thereafter. The Desert Sun said Pougnet earned at least $200,000 consulting for Meaney in 2013 and 2014, and that the state had suspended Union Abbey’s business license five years before.