Fresno again withholds records showing how the city lost $600,000 to scammers. Bee pushes back
The city of Fresno once again refused to release to The Bee elected officials’ emails discussing the 2020 loss of $600,000 to an online phishing scam.
The city lost over $600,000 in 2020 after an employee transferred money twice to an account listed on a fake invoice made to look like an invoice from a contractor working on the Fresno Police Department’s southeast substation. Fresno police launched an investigation, which later was handed over to the FBI.
The Bee received a tip about the fraud case in 2021 and submitted a public records request in December seeking “any communication between Fresno City Councilmembers and Mayor Jerry Dyer’s administration regarding wire fraud during the calendar year of 2021.” The city denied the request saying no responsive records were located.
However, a few months later, The Bee obtained emails between Councilmember Miguel Arias, former City Manager Thomas Esqueda, City Controller Michael Lima, and City Attorney Doug Sloan regarding the loss of money. City officials explained to The Bee that the records search turned up no responsive records because the emails did not contain the words “wire fraud.”
Dyer also said in a news conference that he was disappointed the information was leaked to The Bee because, Dyer said, news reports might jeopardize an FBI investigation into the scam. He said he would be more careful about the information he shared moving forward.
After The Bee broke the news about the phishing scam, a reporter submitted a new public records request seeking communications between Mayor Jerry Dyer’s administration and Fresno City Councilmembers regarding the lost money. The Bee also requested communication between city staff regarding the December records request.
The city attorney’s office on Monday denied The Bee’s second request, citing attorney-client privilege and an ongoing law enforcement investigation.
“The public interest served by not disclosing such information and/or records clearly outweighs the public interest served by disclosure of these records,” the response read.
The Bee’s attorney Karl Olson responded in a letter on Tuesday demanding the city reconsider its stance.
“While revelation of how the city got scammed ‘may cause discomfort or embarrassment’ to city officials, that is not grounds for withholding records which shed light on government financial matters,” Olson wrote, referencing a relevant supreme court case.
Gunita Singh, an attorney with the Reporters Committee for Freedom of the Press, said exemptions in California’s Public Records Act are written for situations such as this.
“There is clearly an exceptional public interest in records related to the city’s loss of such an exorbitant sum of taxpayer money,” she told The Bee via email. “Most of the California Public Records Act’s exemptions are discretionary, and the discretionary nature of those exemptions is precisely to account for situations like this—where a requester seeks records squarely within the public interest.”
Singh encouraged news agencies to make the case for disclosures.
“Oftentimes, agency personnel are simply unaware of the contours of the public records law they’re tasked with administering, so reminding them of their inherent discretion can be a valuable tool,” she said. “I do also believe there is space to work with public information officers to help cultivate a culture of transparency by encouraging them to bear in mind the fundamental principles undergirding open government laws like the Public Records Act.”
Dyer has said the city ruled out the possibility of an inside job but also said they had yet to discover how the scammers were able to replicate invoices from a company doing business with the city.
It’s unclear when — or if — Fresno taxpayers will learn how the system was hacked and what new protocols have been put in place to prevent future scams. The FBI has a longstanding policy of neither confirming nor denying investigations, so it’s also unclear when — or if — the case will formally conclude.
No arrests tied to the case have been reported, and city leaders have said they don’t expect to recover any more of the missing money as the law enforcement investigation enters its third year.
This story was originally published April 14, 2022 at 5:00 AM.