Barrett Newkirk, and Brett Kelman

The Desert Sun

For two years while serving as mayor of Palm Springs, Steve Pougnet accepted bribes from local real-estate developers in exchange for favorable decisions from behind the City Council dais, prosecutors alleged in a criminal complaint listing 21 felony charges against him.

Pougnet, a two-term mayor and former Democratic candidate for Congress, is charged with nine counts of receiving bribes, eight counts of conflict of interest as a public official and three counts of perjury.

Also charged were businessmen John Wessman and Richard Meaney. Each is charged with nine counts of offering a bribe. All three men face an additional charge of conspiracy to commit bribery.

The Riverside County District Attorney's Office alleged in a criminal complaint filed Thursday that Pougnet was paid $375,000 between September 2012 and September 2014 through a scheme in which Wessman paid Meaney who then directed money to Pougnet. The complaint lists nine payments to Pougnet and 11 votes Pougnet cast benefiting Wessman and Meaney.

"Richard Meaney and John Wessman were working together to bribe the mayor, so the money was obviously traveling from the developers to the mayor,” District Attorney Mike Hestrin said. "This is a large amount of money that was paid to the mayor for his influence on the City Council."

"The mayor is very influential and these individuals had a lot to gain," he continued. "It's pretty brazen and pretty obvious once you scratch the surface."

Hestrin said the message of the investigation and charges is that "everybody deserves fair, open and honest government."

The case presents problems for the development of downtown Palm Springs, because convictions of conflict of interest could void development contracts between the city and Wessman.

"There's going to be some complexities that come out of this," Hestrin said. "The sort of unintended consequences of these filings is that some of these deals may have to be unwound and undone."

"If there’s a conflict of interest… you can’t even take part in the discussion," he explained. "We’re talking about multiple land deals, development deals."

DOWNTOWN: Wessman bribery charge endangers downtown Palm Springs project

If convicted of all the charges, Pougnet, 53,would be barred for life from holding public office and face a potential maximum sentence of 19 years in state prison, the DA's Office said.Meaney, 51, and Wessman, 78, would face a potential 12 years in state prison. All three men are expected to surrender to the court in the next few days. Bail was set at $25,000 for each of them, according to court records.

Wessman is set to appear in a Riverside courtroom on March 16 for his arraignment, a hearing where a defendant enters an initial plea. Initial court appearances for Pougnet and Meaney had not been set as of Thursday.

Attempts to contact Meaney, Pougnet and their attorneys were unsuccessful Thursday.

The charges come 17 months after a law enforcement raid on Palm Springs City Hall. The investigation was prompted by The Desert Sun's reporting on Pougnet’s ties to Meaney beginning almost two years ago. Over the course of several months in 2015, the newspaper investigated how Pougnet reported being paid more than $200,000 from Meaney's company Union Abbey for unspecified consulting work and examined possible conflicts of interest as Meaney sought city approval for development projects. Amid the scrutiny, Pougnet announced he would not seek re-election. He left office in December 2015.

Hestrin credited The Desert Sun for its role in bringing the scandal to the attention of the public.

"After the publication of the first of those articles, we began to get a lot of phone calls," he said. "Citizens' complaints, coming forward and saying, 'You should look into this.' … So that began the process of getting the investigation going."

Wessman, the city’s most prominent developer, has been building in Palm Springs since the 1960s. His namesake company is the city’s partner on an incomplete plan to dramatically reshape downtown, expected to cost between $300 million and $400 million. The project is now among those with uncertain futures.

Meaney was known as an executive at the Orange County firm Nexus Development that also had significant plans in Palm Springs. He and Wessman worked together on some projects.

The 12-page criminal complaint gives a timeline of payments going from Wessman to Meaney and Meaney to Pougnet as both developers took projects before the City Council. Stephen Mitchell, another developer whom Pougnet had said he once worked for, also paid Pougnet while receiving money from Meaney. According to the complaint, Mitchell told an investigator in August 2015 that he paid Pougnet about $75,000 to "curry favor" with the mayor. Mitchell has not been charged with a crime.

A receptionist at Wessman'sPalm Springs office said Thursday morning she didn't know anything about the charges and that there was no one at the location who did. No one at an address affiliated with Wessman would answer the door Thursday.

Michael Braun, Wessman's son-in-law and a senior vice president at Wessman's company, said in a brief email to The Desert Sun that he intended to finish the ongoing downtown project. Braun is mentioned in the criminal complaint as having accepted invoices from Meaney and was not charged with a crime.

A statement Braun released Thursday afternoon said Wessman denied any wrongdoing, vowed vigorous defense and announced he was stepping down. His companies are working to ensure that all projects proceed in a timely manner, the statement said.

"In light of these events, John Wessman has formally retired and is no longer involved in the management or in the day to day operations of Wessman Development, Wessman Holdings, or other related entities. This includes all existing projects, including those currently in the planning and/or construction stages, such as the Downtown Palm Springs Project," according to the statement.

Hestrin said the charges announced Thursday were the culmination of the investigation, but he noted more charges could come if new evidence is uncovered.

"I am pretty confident that these are the three main players,” he said.

Hestrin said the money from the developers to the mayor was “absolutely” buying more than votes.

“It's influence in the sense that the mayor is going to make things happen,” he said.

Among the actions alleged in the complaint:

In October 2012, Wessman paid Union Abbey $26,360 about two weeks before Pougnet voted to approve changes to the financing agreement for Wessman's downtown project.

In November 2012, Meaney paid Mitchell $25,100 and Mitchell paid Pougnet $24,690 around the same time Pougnet voted to approve changes to a real-estate project called Vivante involving Meaney and Nexus Development.

Over the course of a few days in December 2012, approximately $24,000 went from Wessman to Meaney and from Meaney to Mitchell's wife, Nancy. On Dec. 19, Pougnet voted to approve Wessman's plans for the downtown development. The next day he accepted a check from the Mitchells' company for $25,620.

In May 2013, Wessman signed a check to Union Abby for $100,000. Soon after, Meaney sent a check to Pougnet for $75,000. The next month, Pougnet voted to approve the Dakota condominium project in which both Wessman and Meaney were involved. Meaney then sent another check to Pougnet in November for $25,000. Then in December, Meaney sent Pougnet yet another check for $50,000 days before Wessman sent Meaney a check for the same amount.

On Sept. 3, 2014, Pougnet voted to approve changes to Wessman's downtown plans. Later that month, Meaney paid Pougnet $75,000. Before the end of the year, Pougnet voted on two other projects involving Meaney and Wessman.

Palm Springs officials and members of the city council were in closed session Thursday morning as the details of the complaint became public. Staff searched for copies of the complaint while others turned on a TV to watch the DA’s press conference, commenting quietly among themselves.

Barely an hour after Hestrin's press conference, Mayor Robert Moon and other council members assured the community they were committed to transparency and had fully cooperated with the investigation.

Moon, flanked by council members Ginny Foat, J.R. Roberts and Geoff Kors, City Manager David Ready, City Attorney Doug Holland and Assistant City Manager Marcus Fuller, said there were more questions than answers and the city would not be able to provide much information to the public right away.

“These are business partnerships, and they are complex, but we will get back to you,” Ready said.

MEASURE J: $43M in Measure J funds tied up in troubled downtown plan

The complaint said an investigator spoke with George Marantz, president of Palm Springs-based G&M Construction, on Jan. 10, 2017. Marantz said Pougnet regularly solicited money from him and that Pougnet voted favorably on plans benefiting Marantz. No dollar amount was included in the complaint, but it lists one criminal charge against Pougnet for a vote on Dec. 19, 2012, giving Marantz's construction company an additional $10,773 for a new bridge on Belardo Road completed that year. Marantz has not been charged. A dispatcher with G&M Construction said Thursday that Marantz was away from the office and not immediately reachable.

On the day of the raid, Sept. 1, 2015, agents from the FBI, IRS and Riverside County District Attorney’s Office confiscated documents and equipment from City Hall and Pougnet’s Palm Springs home. The corruption probe was a jolt to this desert tourist destination that is heavily dependent on private investment for new hotels and restaurants. As mayor, Pougnet cheered on the post-recession boom in new construction.

CORRUPTION INVESTIGATION: Palm Springs one year after the FBI raid on City Hall

Following the raid, the corruption investigation withdrew behind the scenes. As the one-year anniversary came and went, the lack of action or prosecution led some to wonder if the probe had come up empty-handed. Investigators, however, maintained they were still working. The criminal complaints provide some answers for the question of what, if anything, the FBI found and a further indication that questions over possible corruption were not an unfounded attempt to hobble Pougnet in the run up to a city election, as he and some of his supporters had argued.

In a statement issued the day of the raid, Pougnet promised cooperation and cautioned against allowing the investigation to “sidetrack our efforts to make the future even brighter.”

The next day, Pougnet told the audience at a City Council meeting not to speculate about where it might lead.

“This investigation will be thorough, and we’ll all live by the conclusion,” he said. By that time, Pougnet had already said he would be leaving the City Council later that year.

The initial details of Pougnet’s work for Meaney came from annual financial interest forms required of elected officials. Pougnet twice reported being a paid consultant for a company called Union Abbey, earning more than $100,000 in 2013 and again in 2014. State records show Meaney created Union Abbey in 2004 but the company left almost no corporate footprint and the nature of the business was unclear. In April 2015, when The Desert Sun first asked Pougnet about his consulting work, the state said Union Abbey had been suspended for six years and owed $47,435.28 in unpaid taxes.

The exact amount of money Pougnet earned through Union Abbey was unknown because the disclosure forms allow officials to report incomes in broad ranges. For both annual reports he checked a box saying he was paid "over $100,000." Pougnet declined The Desert Sun's request that he provide more documentation of his consulting work.

The three perjury charges against Pougnet are the result of false statements prosecutors said he knowingly made on his financial disclosure documents — known as Forms 700 — in 2013, 2014 and 2015.

FROM APRIL 2015: Palm Springs mayor's consulting job tied to developer

Pougnet, who also earned money consulting for the Palm Springs International Film Festival, initially said he was consulting on projects away from the Palm Springs area. Later, when he announced he was ending his relationship with the company, Pougnet said he helped Meaney understand the city’s economic development efforts so that they could be replicated in other locations. Pougnet sat out of some City Council decisions tied to Meaney without giving a public explanation.

While mayor, Pougnet split his time between Palm Springs and Colorado, where his husband and two children lived. He indicated he was looking forward to joining his family full time after leaving office and has since disappeared from public life in Palm Springs. No one answered the door at his Denver home late Wednesday and Thursday.

At his final council meeting, Pougnet didn’t bring up the ongoing investigation but told a packed chamber he enjoyed “every minute” of his time in office.

“I’m certainly not perfect,” Pougnet said. “But trust me. I gave my all to make the right decisions with this council to move this city forward.”

From foes to partners

The city and Wessman have been seen as partners on the downtown project, even as details like building heights riled some residents. But Wessman wasn’t always in the good graces of city leaders. When negotiations broke down in January 2011 over the city’s purchase of the vacant downtown mall, Wessman and Pougnet each blamed the other.

Frustrated by the years of stagnation at the Desert Fashion Plaza, the city proposed buying the property from Wessman for $18 million. Wessman rejected the offer and said Pougnet was making it difficult to move forward with plans for the site. “I’m not going to go quietly into the night,” Wessman told The Desert Sun at the time.

Pougnet countered, telling the paper, “It’s been him who has not been able to deliver for years.”

Then the dynamic suddenly changed. Pougnet shocked many residents that February when he announced at his State of the City address that a meeting with Wessman had resulted in a new partnership meant to make downtown bustle again.

“I think they went up to John’s house and drank a couple bottles of wine, or something like that,” John Raymond, the city’s former director of economic and community development, said in an October interview. “And they came out of that saying, ‘You know what, we’re going to work together.’”

The improved relationship, which seemed to kill any threat of eminent domain, may have been aided by the fact that the city didn’t have $18 million laying around, Raymond said.

Agreeing to work together on downtown, he said, “turned Steve from being the biggest antagonist into being the biggest cheerleader, like overnight.”

Within a year, the City Council and Wessman were toasting champagne as the mall’s demolition got underway.

INVESTIGATION OF CITY HALL: FBI looking into City Council deal with Wessman

Raymond told The Desert Sun he had one brief interaction with investigators and that he was unaware of Pougnet’s business arrangement with Meaney.

A key piece of the downtown strategy was a 1 percent sales-tax hike 58 percent of city voters approved in November 2011. The city earmarked $43 million raised from the tax, known as Measure J, for downtown demolition and rebuilding.

Wessman gave more than $95,000 to the vote yes campaign, while the city spent nearly $53,000 in tax money on its Measure J “educational campaign.” Since taking effect in April 2012, the tax has raised around $12 million each year for a long list of civic improvements.

People involved in the downtown project have said a series of lawsuits were partly to blame for the slow progress downtown. Much of the construction still needs to happen, and so far only one new business has opened on the project site — a West Elm furnishings store that Pougnet announced with a flourish at what turned out to be his last State of the City speech. The store officially opened last Sept. 1, exactly one year after the raid at City Hall.

Friends and associates

Pougnet and Meaney's ties went beyond Union Abbey. Projects Meaney helped steer through the city-approval process as Pougnet sat in the mayor's chair further linked the two long-time friends.

That friendship preceded Pougnet’s time in city government. Amid the spotlight placed on their relationship in 2015, Meaney and his wife, Heidi, released an open letter saying the couple had known Pougnet more than a decade. They attended the christening of Pougnet’s children, and Pougnet officiated the Meaneys’ wedding. When Pougnet wanted to sell a home in Palm Springs in 2012, records show he enlisted the help of Heidi Meaney and her husband’s employer, Nexus Development.

“It's sad that a handful of people are unhappy with the most productive Mayor this valley has ever seen and feel that it's ok to drag both of us through the mud in an effort to unseat him,” the Meaneys wrote.

In December 2014, while Pougnet was a paid private consultant for Meaney’s Union Abbey, the mayor voted along with the rest of the City Council to sell Meaney and a business partner, Yokang Zhou, a piece of vacant land on a prime commercial corridor. After The Desert Sun asked about the vote, the mayor said he mistakenly neglected to recuse himself from the largely procedural vote. Little is known about Zhou and attempts to contract him were unsuccessful.

A subsequent investigation by the newspaper found that the process the city used to sell the property and others did not involve appraisals or open bidding, making it possible for land to be sold for far under fair-market value.

PALM SPRINGS: City land sale to Richard Meaney raises questions

The process allowed Meaney and Zhou to purchase the small vacant lot for $195,561 a few months after Meaney purchased a similar adjacent lot for $1 million.

The city rescinded the sale offer and commissioned an outside firm to evaluate the process. The review found the city violated legal requirements for the sale of land once owned by its Redevelopment Agency. No one else has come forward to buy the land Meaney once coveted, but Meaney has put a portion of the block he already owns up for sale with his wife as the agent.

Then there was the Hacienda, a failed restaurant and poolside hangout spot Richard and Heidi Meaney opened in 2014 with the help of a $250,000 city economic development grant. Pougnet did not participate in the vote approving the grant. The Hacienda is not part of the DA's criminal complaint.

After the Hacienda closed, an outside review found the city was lax in its recordkeeping around the grant program. The city sued Meaney to recoup some of the grant, and the site is now slated to become a hotel. The suit is currently stayed now that a new developer, Chris Pardo, has agreed to repay the grant if his business there fails. Pardo said Thursday plans for the 66-room hotel were on course.

Wessman controls the lease of the land the Hacienda occupies, and Meaney’s wife Heidi has marketed homes in The Dakota, a nearby Wessman housing project. Votes involving the Dakota are part of prosecutors' case against Pougnet.

Other projects with Meaney ties include the Aberdeen, a block-sized project downtown proposed by Nexus Development while Meaney was a principal at the firm. Nexus had fought preservationists to demolish a row of 1970s-era office buildings as part of Aberdeen, but any talk of Nexus continuing with Aberdeen has stopped since Pougnet left office. Since the project died, the buildings have undergone a careful restoration and are ready for new tenants. Pougnet's interest in property included in that project are part of the case against him.Nexus executives did not respond to phone messages and emails Thursday.

Meaney’s name also surfaced in connection to a 2012 City Council vote benefiting Wessman Development. When another developer, Dennis Cunningham, failed to make progress on a condominium project on the city’s north side and lost the land to a bank, Wessman purchased the land and requested council members recall bonds Cunningham had secured so Wessman could use the proceeds to see the project to completion.

That property, known as Pedregal, is included in prosecutors' case against Pougnet.

Pougnet aggressively supported the request, which passed the council 3-2. The deal led to a lawsuit against the city and a $1. 4 million settlement paid by Cunningham and another developer. With the connection between Pougnet and Meaney raising questions about the vote, those developers filed lawsuits in December against Meaney, the city and Wessman’s companies in an attempt to get their money back. Cunningham said in 2015 that he’d taken his story to the FBI.

Cunningham said in 2015 that he believed Pougnet “ramrodded” the decision on Pedregal. After news of the criminal charges came out Thursday, Cunningham kept his comments more reserved.

“Unfortunately, we are in a lawsuit with the city and I can’t say anything beyond I feel better about our situation at this point. And I feel bad for the city,” Cunningham said.

A mayor’s rise and fall

Pougnet’s announcement in 2015 that he would not seek a third term was an abrupt end to a political career that almost reached the halls of Congress.

He was elected to the Palm Springs City Council in 2003 as still something of a newcomer to the city. Four years later, he became mayor. In the job, Pougnet became known as one of Palm Springs’ biggest promoters, focusing on building the city’s reputation as friendly to businesses, tourists and LGBT people.

Pougnet married his partner, Christopher Green, at City Hall in 2008 and seemed to relish the opportunity to officiate other gay weddings in the window before Proposition 8 temporarily ended them in California starting in 2008.

In 2010, he unsuccessfully challenged Republican incumbent Mary Bono for a seat in the U.S. House of Representatives. He then came back a year later to win the support of 70 percent of voters for another four years as mayor.

STEVE POUGNET: Palm Springs mayor leaves office under cloud

That same year, Pougnet led the campaign to get city voters to approve the Measure J sales tax increase that benefited Wessman’s downtown plans.

When he announced he would not campaign again, Pougnet dismissed any role the scrutiny over his work with Meaney played in his decision. During a council meeting in May 2015, he said he made up his mind “a long time” ago. However, emails from two months earlier obtained by The Desert Sun showed Pougnet laying groundwork for a re-election campaign with consultants and city staff.

With the sitting mayor out of the race, the election for the city's next top elected official largely became a fight between Councilwoman Ginny Foat, a Pougnet ally, and challenger Robert Moon, who campaigned saying he would be a “full-time mayor” and not take on side jobs or consulting work.

Following the City Hall raid, Foat and other council members sought to minimize any blow back, but Moon seized the chance to raise questions about wider corruption – even wearing an FBI uniform during Halloween revelry downtown days before the election.

"It is not a council member's responsibility to keep track of the conflicts of interest of everyone sitting on the council," Foat said during her campaign.

She lost her mayoral bid but retained a seat on the council. Councilman Paul Lewin was voted out in the same election.

The night he was elected mayor, Moon said, “I think people want to be proud of their city government again."

Reporters Skip Descant, Corinne Kennedy and Jesse Marx contributed to this story. Barrett Newkirk can be reached at barrett.newkirk@desertsun.com. Brett Kelman can be reached at brett.kelman@desertsun.com.