The scandal surrounding the decision by California's top parks officials to conceal millions of dollars in public funds -- even as they were asking the public to donate money to keep parks open -- had its roots in accounting errors made in the mid-1990s, according to a long-awaited investigative report released Friday.
State parks officials then covered up the mistakes for at least 15 years because they worried that they would be publicly embarrassed and the money would be taken away from their department to balance the wider state budget if word of the hidden funds got out, the investigation by the state Attorney General's Office found
The 140-page report contained no new bombshells. Investigators found that none of the money was stolen, only that it sat unspent. It appeared Friday that no one will be charged with a crime.
"Throughout this period of intentional nondisclosure, some parks employees consistently requested, without success, that their superiors address the issue," Deputy Attorney General Thomas Patton wrote in the report.
Many top parks officials over the past decade, including Michael Harris, a former No. 2 manager in the department, knew of the concealment, the investigation concluded.
Investigators did not produce conclusive evidence that former parks director Ruth Coleman knew of the concealment. But Coleman, who resigned in July when the funding controversy became public, was the only one of 40 witnesses who, on the advice of her lawyer, refused to agree to an interview with the attorney general's investigators. Harris, the former chief deputy director, was fired the same day in July that Coleman resigned.
In a related finding, the investigators concluded that the total amount of money hidden by park officials from the state Department of Finance was actually $20 million -- not $54 million, as state officials had announced in July.
That $20 million was left in an account known as the State Parks and Recreation Fund, the repository for entrance fees, camping fees and other revenue at California's 290 state parks.
The other $34 million that the state Natural Resources Agency had said in July was also hidden was in the Off-Highway Vehicle Fund, a fund that helps pay for motorcycle and dune buggy parks. But the attorney general's investigators found that the money there was not intentionally hidden. Rather, the balance of the fund varied because of complex accounting issues, including state lawmakers borrowing money from the fund to help balance the budget during the administration of former Gov. Arnold Schwarzenegger, and the incorrect depositing of some gasoline tax money into the fund.
The report did not conclude that any crimes were committed. It noted that the problem with the $20 million that was hidden from the state finance department "apparently began and grew as a result of unintended errors in calculating and reporting prior-year adjustment figures in annual budget reports between 1996 and 2002."
The parks department changed its budgeting process between 1995 and 2000, which may have caused the errors, the report found.
Last month, Gov. Jerry Brown hired a new state parks director, former Marine Corps Gen. Anthony Jackson.
In a statement issued Friday, state Natural Resources Secretary John Laird said: "It is now clear that this is a problem that could have been fixed by a simple correction years ago, instead of being unaddressed for so long that it turned into a significant blow to public trust in government. This report -- warts and all -- is an opportunity to enhance the public's understanding of the inherent complexities and challenges of running any large organization. New systems and people are in place to make sure this never happens again."
Asked in an interview if he expects criminal charges to be filed against any parks employee, Laird said: "That's up to law enforcement people. It's their call. But basically, this report lays it all out in a way that doesn't obviously point to that."
Lynda Gledhill, a spokeswoman for Attorney General Kamala Harris, would not elaborate on the report or make available for an interview Harris or other Department of Justice officials who worked on the investigation.
Gledhill said decisions about criminal prosecution would be made by the Sacramento County District Attorney's Office, adding that the state Attorney General's Office has not recommended any prosecutions.
Parks advocates say the incident has harmed the reputation of a venerable department once widely loved by Californians of all ideological stripes.
"The department is embarrassed, and the whole situation is awkward not only for the department but for everybody up the line. It's very clumsy and terrible," said Joseph Engbeck, a Berkeley historian and author of "State Parks of California: 1864 to Present."
Engbeck said state parks leaders over the past 20 years have done a poor job explaining to California lawmakers and the public the importance of parks. As a result, the department has not inspired confidence and support, as it did under former directors such as William Penn Mott, Jr., of Oakland, who served as state parks director under Gov. Ronald Reagan from 1967 to 1974, adding 24 new state parks and beaches.
The attorney general's investigation found the accounting errors began in the administration of Gov. Pete Wilson, around 1996, and that by 2002 top budget managers in the parks department knew about it. The report said "the evidence indicates" from witness testimony that Tom Domich, state parks assistant deputy director of administrative services from 1987 to 2004, "made the initial decision not to disclose the funds," although Domich denied to investigators that he was aware of the irregularities.
Paul Rogers covers resources and environmental issues. Contact him at 408-920-5045. Follow him at Twitter.com/PaulRogersSJMN
To see the full report, go to www.mercurynews.com/extra