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View other events for the week of 10/ 7/2013

Title: Press Conference & Speak-out At SamTrans Headquarters Against Workplace Bullying
START DATE: Monday October 07
TIME: 4:00 PM - 6:00 PM
Location Details:
SamTrans Headquarters
1250 San Carlos Ave, San Carlos
Event Type: Other
There will be a press conference and speak-out at SamTrans Transit Agency to protest the bullying of public workers who have exposed malfeasance and corruption at the agency. The agency managers with the support of the Board Of Directors have retaliated against whistleblowers including illegally firing workers who have pointed out the corruption and financial malfeasance at the publicly funded agency.

10/7 Press Conference and Speak-out At Transit Agency SamTrans Headquarters
Stop Workplace Bullying/Retaliation At SamTrans-SamTrans Bosses And Managers Bullying Workers To Cover-up Corruption

Monday October 7, 2013 4:00 PM
SamTrans Headquarters
1250 San Carlos Ave, San Carlos

Public worker whistleblowers at SamTrans have documented a record of malfeasance and falsification involving millions of dollars of public funds going to cronies and friends of managers with the complicity of Samtrans transportation officials who also sit on boards in San Mateo County. Instead of investigating this criminal cover-up, the agency bosses have bullied and retaliated against whistleblowers at the agency. This is not unique since there is an epidemic of bullying against public and private workers in the workplace.
The SamTrans transit agency receives tens of millions of dollars from local, state and federal agencies and is engaged in a criminal conspiracy to cover-up the fraudulent use of public funds for "contractors" and other friends and cronies of the management and operators of the agency.
When SamTrans employees discovered this criminal malfeasance and corruption they were targeted for retaliation and illegally fired. When these employees went to the District Attorney Stephen M. Wagstaffe office he said his office did not have the "funds" to investigate serious criminal charges of corruption and misuse of public funds.
California Attorney General Kamala Harris office was also contacted yet have refused to take seriously the fraud and criminal negligence in this agency.
It is illegal to retaliate and discriminate against whistleblowers but apparently the managers of Board of Directors of SamTrans think that they are above the law in their efforts to silence and destroy the lives of the whistleblowers.
Call San Mateo DA Stephen M. Wagstaffe and ask him why he doesn't investigate this fraud and malfeasance.
His number is (650) 312-5303.

Join the October 7 SamTrans Press Conference and Rally at 4:00 PM
SamTrans Headquarters
1250 San Carlos Ave, San Carlos

Sponsored by Stop Workplace Bullying Group
SWBG
United Public Workers For Action
http://www.upwa.info
For information call (415)282-1908

Insiders Allege Fraudulent Accounting at SamTrans
http://www.nbcbayarea.com/investigations/Insiders-Allege-Fraudulent-Accounting-at-SamTrans-224510341.html

Insiders say they were asked to make changes to the San Mateo County Transit District’s financial records that they believe were illegal; they say SamTrans made up expenses to create the appearance it needed more taxpayer money.
By Vicky Nguyen, Jeremy Carroll and Kevin Nious| Friday, Sep 20, 2013


Insiders say they were asked to make changes to the San Mateo County Transit District’s financial records that they believe were illegal; they say SamTrans made up expenses to create the appearance it needed more taxpayer money. Vicky Nguyen reports.

Was it a mistake or was it intentional? That’s the question facing the San Mateo County Transit District after the NBC Bay Area Investigative Unit uncovered a series of accounting errors that district insiders say were made to deliberately hide how the district is handling public money.

SamTrans vehemently denies these allegations, categorizing the “classification errors” as honest mistakes.

The district operates the budgets for Caltrain, SamTrans buses, and the San Mateo County Transportation Authority. In recent years the district has announced that Caltrain is in a fiscal crisis, freezing worker wages, hiking fares and warning riders of reduced service.

DOCUMENTS


• Email From SamTrans Manager to Whistleblower


• Employee Accrual Complaint


• SamTrans Payments for Management Coach


• Journal Entry Detail Report
Now, several employees in the finance department are speaking out, revealing that behind the scenes of this fiscal crisis, they were asked to make changes to financial records that they believed were fraudulent.

“It’s only the workers bees, the grunts, who know what’s going on,” said David Ramires, one of several whistleblowers who came to NBC Bay Area with their concerns. “I provided the financial [statements], I know what’s going on.”

Ramires worked in the finance department from 2001 to 2012. His duties included preparing Caltrain’s monthly financial statements for the board of directors. But Ramires told NBC Bay Area, before those numbers were presented, he was routinely instructed to artificially inflate Caltrain’s expenses, so management could ask for more taxpayer money.

“We had to increase expenses where there were no true expenses,” Ramires said. “It’s hard to believe, but it’s done, it happens. The thing was either get it done or you’re going to get fired.”

USEFUL LINKS


• SamTrans Mark Simon Letter to Staff


• SamTrans Response to Records Request


• SamTrans Auditor Response


• CalTrain Fiscal Crisis


• Principles of Accounting
Ramires said he was ordered to find leftover money in departments that came in under budget and create fake expenses to show to the public. “They would look at what was already posted and look at the budget and change it to either match budget or go over budget,” Ramires explained. This allowed managers to build up a reserve they could later dip into and use at their discretion, without transparency to the public or the board of directors.

According to Ramires, one of the primary ways management was able to create these fake expenses and avoid scrutiny was through accounting process known as an accrual.

In simplest terms--a legitimate accrual occurs when a product or service is received by the district as of year-end, but has not yet been paid as of year-end. Examples of those expenses include utility bills or employee salaries owed for June but paid in July. Accountants will recognize those expenses as accruals to keep track of costs incurred in one period that are paid in the next period. Usually accruals are paid within a few months. Under Generally Accepted Accounting Principles (GAAP), expenses should be recognized in the period the goods or services were provided rather than when they are paid.

But Ramires said managers instructed him to classify leftover money in the budget as an accrued expense, when it wasn’t. “It was journal entries no backup, no nothing, just numbers to inflate the account,” he said. “We move it to an unreserved fund, to an unreserved account.”

He pointed NBC Bay Area to a trail of documents showing examples of some of the questionable accounting he was asked to perform. He said the errors coded in these documents were designed to hide how the district was truly managing public money. In these examples, bills for management coaches and consultants were first paid out of the proper account. But Ramires said managers told him to later reverse the payments so that they came out of an insurance accrual account instead.

If it sounds complicated, that’s because it’s supposed to be, according to Ramires. He said the miscoding in these documents was designed to hide how the district was truly managing public money.

“I was one of the people who was like 'Why? Why are we doing this? It doesn’t make sense,’” Ramires recalled. He admitted that he believed these transactions were fraudulent, but said he went along with the orders to help the district save money.

“It was like, OK, we’re saving for a rainy day, but it’s not raining,” Ramires said.

And he’s not the only one speaking out.

Others, including a certified public accountant who worked for the district for two years, raised similar concerns, but asked not to be identified for fear of retribution. The CPA provided this email sent by a manager requesting that the bill for a management coach be paid with money set aside for a $5,000 “printing services accrual.” Upon further inspection, the employee discovered that the accrual was two years old and had no invoices, paperwork, or any other kind of backup to prove that this service was ever received by district.

The employee responded by informing the manager, “This is against the accounting principles… I will make journal entry as you wish but you are wrong and you need to consult with the auditor for what you are trying to make me do.”

Through a California Public Records Act (CPRA) request, NBC Bay Area asked SamTrans about a sample of the questionable transactions identified by Ramires and others inside the finance department.

The district’s auditors, Maze and Associates, confirmed that these transactions were made in error. According to the SamTrans response to NBC’s records request, the auditors concluded that expenses were coded incorrectly in 2010, 2011, 2012 and 2013.

Click here to see the district’s response to NBC Bay Area’s records request

The auditors also found additional errors including:

--$292,119 of payments over 3 years to consulting firm Parson’s that came from the “incorrect general ledger account”

--$60,286 of payments over 3 years to coaching firm S3 that were initially coded correctly, but later “reclassified…to an incorrect general ledger account”

--A $16,500 payment to S3 that came from “an incorrect general ledger account”

Click here to see the memo from auditors Maze and Associates.

As for the printing accrual, SamTrans admitted “There is no backup to the $5,000 accrual for printing expenses” stating it was “an accrual to encumber these funds for the 2011 Progress Report for the Transportation Authority.”

It’s an explanation that has no basis in accounting, according to experts we spoke with at MGO, a Bay Area firm that has performed audits for government agencies throughout the Bay Area, including SamTrans from 1997 to 2001.

“Under governmental accounting standards, you don't accrue an expense for an encumbrance. Rather, an encumbrance is used in budgetary accounting for commitments the entity has entered into but for which goods or services have not yet been provided,” MGO partner and independent auditor David Bullock said. “In addition, it appears that in subsequent years, this accrual was used to offset consulting costs rather than printing, a seemingly unrelated cost classification.”

Bullock added: “I think it's important to note that when errors are found, the auditor has a professional responsibility to look at the facts and circumstances surrounding the error especially in combination with any allegations made. [They] should take it seriously and expand their testing and look a little more deeply into these errors.”

For its part, SamTrans insists any mistakes were accidental.

“Honest mistakes happen every year,” SamTrans CEO Mike Scanlon said. He strongly argued that these miscoding was not done on purpose, as sources told NBC Bay Area.

“It is not bad accounting. It is errors that occur,” Scanlon said.

When pressed to answer why this happened repeatedly from 2010 to 2013, and why some of the people who made these entries described them as fraud, Scanlon maintained his position. “I don’t know why somebody can just make allegations and all of a sudden they carry more weight in your world than these fine professionals.”

Scanlon touted the quality of his award-winning finance department and insisted the errors were done so with honest intentions. “What’s happened over many years is that we’ve gotten awards every year for our accounting practices,” he said.

In an exchange over why SamTrans would pay consultants and management coaches out of an account designated for paying for insurance costs, Scanlon admitted if it happened, it “was a mistake that something was paid erroneously out of an account. That’s not where you would pay them from.” He went on to promise, “We do not pay for coaches out of an insurance fund if there was a time I would be happy to have my CFO (Gigi Harrington) come on air, come on camera, and explain to you if there was a mistake paid because of a miscoding. That is not what we do.”

Is paying management coaches out of an insurance account a transparent way to spend public money?

“I believe on one time it was done as an error,” Scanlon said. “That’s all I know of and it was corrected.”

But when reminded that the district’s auditors found this happened multiple times in just one small snapshot of transactions provided by NBC Bay Area, Scanlon continued to deny it was done purposefully. He contends that the errors uncovered by NBC Bay Area’s sources made no impact on Caltrain’s overall financial statements.

But Ramires urges auditors to dig deeper, saying these transactions represent just a fraction of the money he was asked to hide for years.

Later this month, the district’s independent auditing firm, Maze and Associates, will review the accounts brought to SamTrans’ attention by NBC Bay Area. SamTrans said Maze will also review the district’s internal processes and recommend changes if necessary. The auditors declined to speak with NBC Bay Area directly, citing company policy not to comment on clients unless directed by the client.

The morning after the interview with Scanlon, SamTrans sent out this memo to the board of directors and staff warning of the NBC Bay Area investigation.

To view the full interview with Scanlon, click on the links below:

NBC Interview with SamTrans CEO Scanlon Part 1

NBC Interview with SamTrans CEO Scanlon Part 2

NBC Interview with SamTrans CEO Scanlon Part 3

Have a tip for the Investigative Unit?

Email Vicky [at] NBCBayArea.com. You can also follow her on Twitter or connect on Facebook.

Or Call 888-996-TIPS (8477) or email the Unit at TheUnit [at] nbcbayarea.com.

SamTran's PR Flack On Cover-up

Letter from Mark SImon
"Dear Colleagues,

For several weeks, an investigative team from NBC-11 has been gathering information for a television news story alleging that District has engaged in questionable and potentially illegal accounting and financial practices. They began their inquiry under false pretenses, stating only that they wanted to do a story on the financial challenges facing the agency, but as their inquiries continued, it became evident they are relying on false allegations by two disgruntled ex-employees.
Yesterday, seven weeks after their initial request, Mike Scanlon sat for an on-camera interview with reporter Vicky Nguyen, who repeated the allegations, and described the information provided by these two sources as “a pattern of fraud.”

Mike categorically denied the allegations for the simple reason that they are not true. There is no evidence of misappropriation of funds of any kind because no misappropriations have taken place. There is no pattern of fraud.

A story on the same subject appeared in today’s editions of the San Mateo Daily Journal.

As the Daily Journal story reported and as we have repeatedly told NBC-11, these allegations were made initially by an employee, recently dismissed for cause, and were fully investigated by independent investigators. The investigators interviewed everyone involved, including the employee, and concluded these accusations were without merit. We provided those documents, along with dozens of others, to NBC-11. Nonetheless, it is evident that NBC-11 is going to proceed with its story.

There are a handful of accounting oversights that occurred over a three-year period among literally hundreds of thousands of transactions processed by the three agencies of the District. When we learned of these, we notified our auditor, who reported that while the oversights should be fixed, they do not rise to the level that is characterized as material.

The accounting oversights amount to a total of about $300,000 over three years in a District with combined annual budgets of more than $500 million.

NBC-11 is prepared to air interviews with individuals they described as experts in public finance accounting who undoubtedly will call into question our practices, based on an erroneous description provided and characterized by NBC-11. They will air an interview with a former SamTrans accountant, who will allege that he made the accounting entries in question at the direction of his superiors. This is simply not true. They also are likely to air an interview with the employee, who recently lost her appeal of a dismissal for cause and is now an ex-employee, and she will make similar claims. They have not identified this individual directly. Again, these claims are false.

The interview was characterized by extremely aggressive behavior by Ms. Nguyen, who frequently interrupted Mike and wouldn’t let him complete answers to her questions. Despite these obstacles, Mike stated repeatedly stated that he has the highest confidence in the integrity and ethical standards of the employees at this agency. He noted that we are the object of independent audits by a firm we hire as well as by state and federal regulators and that we regularly receive a clean bill of health from all audits. He noted that our accounting documents have repeatedly won awards for their quality and depth. He said repeatedly the allegations are false; in fact, he called them delusional.

It is has been profoundly frustrating to attempt to work with NBC-11 as they have pursued this story. We believe that transparency is our best response to the false allegations and we have provided dozens of documents to their reporter and devoted significant time and resources to responding to them. But when an organization is determined to proceed despite the extensive information we have provided them and without independent verification of allegations by disgruntled ex-employees, it is difficult to receive fair treatment. In fact, we fully expect we will not.

After we met with NBC-11, and in the spirit of encouraging transparency, we conducted an interview with a reporter from the San Mateo Daily Journal, who had inquired weeks ago on the same subject. That story is in today’s newspaper.

We have worked hard in the past several weeks to defend and protect the reputation of the people at this agency, whose work we hold in the highest regard, and with good cause, based on their adherence to the highest ethical standards, as affirmed by the countless awards they have received from the accounting industry. That we were unsuccessful in preventing a false story from being aired is of considerable disappointment. When the story airs, we will consider how best to respond, both publicly and legally.

We don’t know when the NBC-11 story will air, but we wanted you to know everything we know prior to the story.

As we discussed at our most recent staff meeting, these are difficult times to be at a public agency, but what will see us through is the continuing quality and integrity of the work done here every day.


Mark Simon
Executive Officer for Public Affairs"






Added to the calendar on Sunday Sep 29th, 2013 1:29 PM

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§SamTrans Board Chair Carol Groom
by Stop Workplace Bullying Group Sunday Sep 29th, 2013 1:29 PM
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SamTrans Board of Directors Carol Groom and other board members refuse to properly investigate and stop the rampant corruption and malfeasance at this publicly funded agency. Instead they have supported the bullying and retaliation against public workers who have blown the whistle on the systemic corruption at the agency.

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Who Is Mark Simon And Who Does He Represent? "I think you are completely disingenuous."

Mark Simon
Executive Officer, Public Affairs
San Francisco Bay AreaTransportation/Trucking/Railroad
Current
San Mateo County Transit District (SamTrans), SamTrans, Caltrain
Previous
San Mateo County Transit District, San Francisco Chronicle, Peninsula Times Tribune
Education
San Jose State University

THURSDAY, OCTOBER 21, 2010


Letter to Mark Simon of SamTrans regarding Pico
The Pico Boulevard situation continues.

Mark Simon of SamTrans sent out this note.


Thank you for your correspondence regarding the closure to through traffic of Pico Boulevard in San Carlos .

Last December, out of concerns that automobile, cycling and pedestrian traffic on Pico Boulevard presented a significant safety hazard, San Mateo County Transit District (SamTrans) staff closed the east-end gate, thereby blocking access to through traffic.

This decision was prompted by several near-collisions between buses and automobiles, cyclists and pedestrians. Pico Boulevard is the only access road to the SamTrans South Base and it is used throughout the day by hundreds of buses.

In the intervening months, SamTrans, as the lessee and principal user of the road, conducted a safety review of the street. A copy of the safety review is attached.

That review is complete and a report concerning that review was provided to the SamTrans Board of Directors at its regularly scheduled meeting on October 13.

As part of that report, staff indicated that the road as currently configured does not meet District safety standards. Therefore, the east gate will remain closed as a continuing safety measure, while further options are explored.

Here are the principal findings of the review:

n Pico Boulevard is an unimproved, privately owned road that is the sole access to South Base for the hundreds of buses that travel in and out of the base every weekday.
n The road is used, additionally, to provide parking for base personnel.
n As an unimproved road, Pico Boulevard is neither designed nor configured to meet California Highway Patrol definitional requirements as a publicly accessible highway appropriate for through-passage use by automobiles, cyclists and pedestrians in traffic interaction with buses.
n Specifically, the road:
o Is not engineered for public usage to accommodate through traffic of any kind, including pedestrians, bicycles and pedestrians;
o Is of insufficient width to support mixed traffic, particularly mixed traffic that could include two buses traveling side-by-side and additional automobiles or bicycles;
o Lacks appropriate safety signage, including speed limit signs and signs designating Pico Boulevard as a private roadway;
o Lacks sufficient lighting. Current lighting on Pico Boulevard is designed and installed to provide minimal safety and security features for the SamTrans base, not vehicular, pedestrian and bicycle traffic in darkness;
o Is not subject to consistent maintenance of the roadway to ensure safe operation of vehicles for the purposes of accommodating through traffic.
n A formal traffic engineering study is necessary to determine what changes and improvements would be required to bring Pico Boulevard to an acceptable standard of safety and to ensure that public access to the roadway would not compromise security and safety at the SamTrans base.
n A determination will have to be made whether such a safety review is warranted and, as lessee of the property, whether an investment of public funds is warranted to improve a privately held roadway;
n In the interim, the gate will remain closed.

In the report to the Board, it was noted that a number of comments were received from cyclists who expressed concern that the alternative to Pico Boulevard , Redwood Shores Parkway is significantly more hazardous for cyclists.

We do not have the expertise to judge the relative safety of one road over another.

We are particularly alarmed, however, that a public thoroughfare designed to be used by bikes and including a well-marked bike lane, is considered unsafe and significantly more hazardous than an unimproved, private roadway that is used by hundreds of buses every day.

We are prepared to assist in facilitating a meeting between cyclists and the City of Redwood City to determine what steps may be taken to improve the safety of Redwood Shores Parkway, which is already designated and designed for pedestrian, bicycle and vehicular traffic. When such a meeting is scheduled, we will notify you.

We believe the city is in the best position to provide, legitimate, safe passage on public roadways and we are prepared to work with the city and cyclists to assure that the right conditions exist for Redwood Shores Parkway .

We understand and sympathize with those who have been frustrated by the decision to close the gate. Our concern for safety – including the safety of bicyclists – must be the paramount concern. We would prefer to have cyclists alive, well, and angry at the agency, than any of the alternatives that might arise due to unsafe conditions.

Sincerely,


Mark Simon


I wrote this letter.

Mr. Simon -

I just read this snippet from a mail you sent out about Pico Blvd and Redwood Shores.

"We are particularly alarmed, however, that a public thoroughfare designed to be used by bikes and including a well-marked bike lane, is considered unsafe and significantly more hazardous than an unimproved, private roadway that is used by hundreds of buses every day."

Words fail to describe my anger at this statement. Redwood Shores was designed to be used by cars - not by bicycles. Just because they slap down some paint on the road that says "BIKE LANE" does not mean the roadway was designed to be used by bikes.

A well marked bike lane on the right side of the road is of no use to a cyclist needing to merge across three lanes of high speed traffic in order to make a left turn. The majority of people using Pico Boulevard were doing so in order to accomplish exactly that - by crossing Redwood Shores using the traffic light, they were able to remove the procedure of merging across three lanes of traffic to get to the left turn lane. Incidentally, the left turn light from Redwood Shores to Shoreway does not trigger for bicycles, so in addition to the hazardous merging situation, cyclists are forced to wait for the rare instance of a car turning left onto Shoreway in order to get a green arrow - the result being that most of them simply run the red light to their own peril.

If this description was not clear to SamTrans, then your review was worthless.

Pico Boulevard is used by hundreds of buses every day. Redwood Shores is used by hundreds of cars EVERY FIVE MINUTES.

The situation is broken. Samtrans has within its control the ability to make a broken situation better. Instead you appear content to pass the buck to Redwood City and San Carlos. You should know full well that any solution that mitigates this on the roadway would be years until fruition - and more likely is simply impossible. Any solution that provides a safe merge across three high speed traffic lanes for cyclists would be met with howls of protests from the drivers who use that roadway currently - it would involve changing light cycles and potentially removing a lane.

If you had simply said "We're scared to death of the liability issue so we aren't opening the roadway", I'd think SamTrans was gutless. Instead I think you are completely disingenuous.

Sincerely

John Murphy


Simon's reply

We do not think the road meets our safety standards. We have said so repeatedly.


Mark Simon
Executive Officer
SamTrans
Caltrain
SMCTA


Remember this part from his first letter...

We understand and sympathize with those who have been frustrated by the decision to close the gate. Our concern for safety – including the safety of bicyclists – must be the paramount concern. We would prefer to have cyclists alive, well, and angry at the agency, than any of the alternatives that might arise due to unsafe conditions.


I'm not sure how closing an "unsafe" road and forcing people onto a "more unsafe" road accomplishes that aim.
POSTED BY MURPHSTAHOE AT 12:23 PM
3 COMMENTS:

Bryn said...
Your letter mirrors the points and arguments I made in my letter to Mark Simons in September. It is clear that Mark is being intentionally obtuse because he's already made up his mind to protect the liability of SamTrans over greater public safety.

He makes a big deal about the hundreds of buses on this road, but fails to mention that 100% of that bus traffic must traverse the Redwood Shores Parkway/Shoreway intersection because that is the only route.

Maybe we should harness some of our anger to get Redwood City to fix the light sensors so they detect bicycles.

OCTOBER 21, 2010 AT 1:37 PM
295bus said...
No point in arguing with this doofus; we need to go over his head, and complain to the SM Co supes and RWC council. I live here, and have some experience in angry letter writing; I'll fire some off.

OCTOBER 22, 2010 AT 6:52 AM
Andy Chow said...
You should actually go to the SamTrans Board of Directors and the San Mateo County Transportation Authority (which can program funds to provide any improvements necessary.) Before that you can address to the SamTrans and TA CACs.

I think it would be a good idea to invite them and the council members of Redwood City for a bike ride in the area. Let them see for themselves which route is safer.

A few signs should be sufficient to warn bicyclists of high bus traffic in the area.

OCTOBER 22, 2010 AT 11:53 AM
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mark_simon_the_game_tv_sh...

Mark Simon PR Flack And TV "Journalist" With "The Game" On The Public Does Damage Control For Cronyism and Corruption At SamTrans
New Councilmen Olbert and Collins on Peninsula TV
http://sancarlos.patch.com/groups/politics-and-elections/p/mmm-4659a61c
The new members of the council join members of the Millbrae and Foster City council to discuss why they ran, and what they expect.
Posted by Kenny Porpora , January 30, 2012 at 07:33 AM
Comment Recommend

Newly elected San Carlos City Councilmen Mark Olbert and Ron Collins were on a recent edition of"The Game" hosted by Mark Simon and Kevin Sullivan of Peninsula Television, to discuss the current state of local politics.

Joined by their constituents from nearby Peninsula towns - Councilman Wayne Lee of Millbrae, and Councilmen Steve Okamoto and Herb Perez of Foster City - the five new members of the local political structure discussed why they ran for office, and what they expect.

Check out the full video of the show here.
No mention of corruption on this show since PR Flack Simon is involved 24/7 in covering it up including on his tv show