Sean Belk
-Staff Writer-
A preliminary hearing for an elected water-agency board director, his wife and another water-agency board director charged with carrying out “an elaborate embezzlement scheme” has been continued to Monday, Sept. 8.
All three defendants, who have pleaded not guilty to the felony corruption charges, are scheduled to appear in Los Angeles County Superior Court in Department 4 in Torrance, according to a spokesperson with the Los Angeles County District Attorney’s office (LADA).
Robert Katherman, Jr., 68, a former aide for Los Angeles City Councilmember Curren Price, Jr. and an elected board director of the Water Replenishment District of Southern California (WRD), and his wife, Marilyn Katherman, 65, are both charged with two felony counts of misappropriation of public funds, according to the LADA’s office.
Ronald Smith, 55, an elected board director of the West Basin Municipal Water District (West Basin), is being charged with seven felony counts, including two counts of misappropriation of public funds, four counts of perjury and one count of conflict of interest, the LADA states.
LADA prosecutors allege that the Kathermans wrote checks from the Adopt A Storm Drain Foundation, a nonprofit that the Kathermans co-founded to educate the public about water conservation, to help Smith pay about $20,000 in personal expenses.
Smith is currently in jail on $125,000 bail, according to West Basin officials. The Kathermans were released without bail.
According to the LADA, the embezzlement scheme occurred after Smith got the West Basin board to make “multiple contributions” throughout a three-year period, beginning in August 2010, to help sponsor the Adopt A Storm Drain Foundation.
During that time period, Smith also contributed money from his “district outreach fund” that did not need board approval, prosecutors allege.
Shortly after receiving the West Basin donations, the Kathermans began writing checks from foundation accounts to schools and organizations that “had no connection to the foundation,” according to prosecutors.
Prosecutors state that the checks covered school and college tuition and paid for tennis and dance lessons for Smith’s children. Adopt A Storm Drain checks also allegedly paid for repairs to Smith’s boat and his rent. In addition, Smith allegedly wrote checks from his West Basin discretionary account to pay various school expenses for his children. In all, about $20,000 was stolen, prosecutors said.
If convicted, Smith faces up to nine years in state prison while the Kathermans each face up to four years in state prison.
The case remains under investigation by the Torrance Police Department. Deputy District Attorney Alison Matsumoto Estrada, with the LADA’s public integrity division, is assigned to the case.
On Monday, Aug. 25, the West Basin Board of Directors voted unanimously to suspend the use of Smith’s outreach and sponsorship funds, pending the results of a “combined forensic and financial audit,” according to West Basin.
The action comes after the West Basin board stripped Smith of his treasurer position and removed him from all board committee leadership roles on Aug. 7, shortly after the DA filed charges.
The outreach and sponsorship funds will be one of several areas evaluated in an independent audit approved by the West Basin board, according to West Basin officials.
“This is another step to improve our transparency and is a renewed commitment to our communities and ratepayers that our board will take necessary actions to ensure sound financial resource management now and for the future,” said Donald Dear, president of the West Basin Board of Directors, in a prepared statement.
West Basin’s independent audit, which is expected to take four months (September through December) will involve “thoroughly reviewing West Basin’s code of conduct and interviewing key staff and district counsel to identify any potential areas of concern,” West Basin officials said.
The audit will also evaluate the use of director expenses that include “sponsorships, directors’ outreach funds and other related programs.” An auditing firm is expected to provide the West Basin Board of Directors with recommendations regarding possible amendments to the agency’s current code of conduct.
West Basin Board Vice President Gloria Gray said in a prepared statement that the board has directed staff to pursue obtaining a district transparency certificate of excellence, created by the Special District Leadership Foundation, to promote transparency in operations and governance for special districts.
“I believe these actions will help ensure the public’s trust,” Gray said.
Meanwhile, Robert Katherman continues to serve as WRD board director for Division 2, however he resigned from his position as deputy chief of staff for Los Angeles City Councilmember Price, who Katherman had worked for since July 1, 2013.
As previously reported by the Signal Tribune, Katherman, in a phone interview, denied any wrongdoing, stating that he is innocent and that the charges and the allegations brought against him and his wife are “inaccurate” and “unfounded.”
Katherman added that Cathy Beauregard, a bookkeeper and a co-founder of the Adopt A Storm Drain nonprofit, brought the charges to the DA as a way to retaliate against him because he didn’t elect her president of the nonprofit’s three-member board, which consisted of the Kathermans and Beauregard.
Katherman said he was “shocked” and “dismayed” to learn from the DA’s investigation that the checks funded Smith’s personal expenses, adding, “I just couldn’t believe it.”
Katherman said he had sent checks to Marymount College and Palos Verdes High School but learned through the investigation that Smith used the money for his rent. Katherman said it must have been a “misunderstanding.”
Katherman added that he wrote checks to an organization to provide money for a “boating and water-shed education experience for kids” but recently learned that the money was used to repair Smith’s boat.
Beauregard, however, said in a phone interview that she started confronting Katherman in 2010 about checks that he was writing and wasn’t properly accounting for them in the books. She eventually resigned from the nonprofit at the advice of her attorney. Beauregard stated that every check that she wrote from the nonprofit was accounted for and recorded.
Ron Wildermuth, spokesperson for West Basin, said in a phone interview last week that the West Basin board isn’t allowed to vote on whether to dismiss Smith from the board until a judgment is made in the case. If Smith is convicted, he would not be allowed to return to the board, Wildermuth said.
“If he’s found guilty of a felony, [Smith] cannot return to the board,” Wildermuth said, adding, although West Basin is not implicated in the case, the agency plans to have an attorney present during court proceedings.
Smith has not filed paperwork to run for his West Basin seat, which is up for election in November.
