Southern California Public Employee Union Sues Ex-Official for Stealing $700K+

It would be an understatement to say that relations between the San Bernardino Public Employees Association (SBPEA) and its former general manager, Robert Blough, have been a lot better. On October 17, the independent union, which represents about 11,000 of 23,000 San Bernardino County, Calif. employees, filed a civil suit against Blough, alleging that he had stolen or misspent more than $700,000. The suit, filed in County Superior Court, seeks to recoup the missing money, plus associated costs. The action came two weeks after the union delivered the information to the district attorney, requesting an investigation and, if necessary, a criminal prosecution. Blough is hardly in a mood to settle. On November 20, he filed a response alleging the union was complicit in any and all illicit activity.

The San Bernardino-based SBPEA would appear to have a winnable case. In 2013, the union hired a new auditing firm. Subsequently, in the union’s words, the auditors “discovered that there was a large disparity in the amount of SBPEA’s recorded cash receipts and the amount of deposits made to SBPEA’s bank account at Security Bank of California.” The audit also found that union credit cards, including those in Blough’s name, had numerous charges that “appeared to be personal in nature.” The auditors calculated that during July 1, 2011-June 30, 2013 the union was short by $595,444.82 in cash. In addition, it had $108,345.12 in unauthorized expenditures. Reviewing the evidence, the SBPEA executive board accused Blough, who had assumed his general manager post in December 2005, of stealing the funds and falsifying union records. On June 21, 2013, the board placed Blough on administrative leave, and then, that August 13, fired him, along with his assistant, Jeannie Marquez; the latter was not named as a defendant.

The union insists Blough is an embezzler and is seeking a criminal investigation on top of its civil suit. On October 15, San Bernardino Public Employees Association President Ron Dunn issued the following statement:

The SBPEA Board of Directors has requested that District Attorney Mike Ramos investigate funds that are missing from the San Bernardino Public Employees Association.

This request was made after SBPEA completed an internal investigation of Association finances. A key component of that investigation was a special audit. SBPEA tasked an independent auditor with reviewing financial irregularities that had come to light at the end of the tenure of former SBPEA General Manager Bob Blough.

Mr. Blough had been terminated for, among other things, refusing to allow SBPEA’s auditing firm to conduct the annual audit of the Association’s finances.

The special audit ordered by the SBPEA Board of Directors revealed that Association money was unaccounted for and that there had been several unauthorized expenditures.

Blough, a resident of Calimesa (Riverside County), Calif., denies the allegations. In a 10-page response filed on November 20 in San Bernardino County Superior Court, he alleged the union had “unclean hands” and was complicit in the alleged wrongdoing. The SBPEA, wrote Blough, in failing to take action to identify and recover missing funds, effectively has waived “any and all its claims” against him. He is seeking $520,000 in general damages, plus compensation for punitive damages and attorney’s costs. This is a rather unpleasant divorce even by union standards.