How could an auditor pick up any red flags to this corruption case? Background

When I see the details of a fraud that has worked into the public eye, I sometimes look a little deeper for my learning.  I also wonder what could have been seen by an auditor.  What catches my interest today is the criminal indictment of the mayor of Upland, California, which is the city next door to where I live.

Today’s post will provide some background.  Discussion to follow later.

There are two particular businesses in Upland that had their licenses revoked by the city.  The FBI alleges the mayor had his buddies approach each of the businesses and ask for money.  In return, the FBI says the mayor offered to intervene with different city agencies to get the licenses back.  In 2007 and 2009, the FBI claims the two businesses paid $45,000 to the mayor’s helper.  Last week the mayor and his helper were indicted.

So here’s the question: is there anything in this corruption case that an auditor could have seen that would have hinted of the existence of the scheme?

All the background for my discussion can be found in the indictment and this article in the local paper.

According to the indictment, the only written documents in the case are a consulting contract from the businesses receiving the shakedown and a construction company owned by the mayor’s helper.  The consulting agreement said the construction company would help the business get its license back, according to the indictment.  Payments were made from the business to the construction company, so says the FBI.

Other than that, the only activity discussed in the indictment that would be visible is the mayor talking to city staff asking if they could help a business.  That is something that probably happens frequently and could easily be appropriate – one of the legitimate jobs of any mayor is to get business into the city.  Helping a constituent is what every politician wants to do, right?  Some politicians have staffers who spend all their time helping constituents.  Without any sarcasm at all, that is a legitimate task for elected officials.

Tomorrow Next post in the series, a discussion on what an auditor could have seen in the current situation.

Full disclosure: I met the new mayor of Upland when he was just starting in city politics and I have visited with him at business luncheons.  I have not talked to him (or anyone else) about anything related to this case and have no intention to do so.  Everything I know comes from what is available in the public arena.

If you are so inclined, please pray for the new mayor and the city council.  Also pray that our legal system will get to the truth of what are currently just allegations.

P.S. Just a little point of clarification.  About two weeks before his indictment, the mayor resigned his position.  One of the council members moved into the mayor’s position.  It is the *new* mayor that is my acquaintance.  I wish him well.