County Officials Knew of Shirakawa’s Spending, 2009 Audit Shows

An attorney with the county counsel’s office has provided San Jose Inside with a third, previously unreported audit of Supervisor George Shirakawa’s county charge card, also known as a P-Card. The audit shows that county officials were aware of Shirakawa’s free spending and disregard for county rules related to P-Cards as early as November 2009 — yet did nothing to stop the violations.

Metro reported last month that Shirakawa, the top elected official in the county as president of the Board of Supervisors, used his P-Card to spend thousands of taxpayer dollars on $100 steaks and alcohol at restaurants, vacations to golf resorts and casinos, four-star hotels and luxury car rentals, as well as treat staff members, lobbyists and unwitting colleagues to lavish dinners. Shirakawa would then conveniently fail to submit itemized receipts—but not the signed summary copies—and fraudulently declare in memos that no alcohol was ever served and that every meeting was related to county business.

San Jose Police Chief Chris Moore has already publicly acknowledged that Shirakawa crashed a private dinner party and inappropriately expensed the meal to the county. Moore wrote a $400 reimbursement check and a letter to the county stating that he had no knowledge Shirakawa picked up part of the tab only to forward the bill to taxpayers.

The county’s latest audit to come to light, dated Nov. 12, 2009, shows that the Shirakawa—in his first year as a supervisor—consistently failed to file itemized receipts as well as missing receipt memos, in addition to buying an unauthorized high definition television from Best Buy. A closer examination of Shirakawa’s expense reports shows that in his first year as supervisor, he did not submit a single itemized receipt for any of the restaurants he visited.

However, the audit concluded that the “transactions audited for this period followed the policies and procedures set forth in the Procurement Card program.”

The counties’ other two audits of Shirakawa’s P-Card, conducted in February 2010 and July 2011, came to the same conclusions despite reporting that the supervisor consistently failed to follow P-Card policies on itemized receipts and using county contracted vendors.

In late September, Metro began making Public Records Act requests related to Shirakawa’s P-Card purchases. A few weeks later, the supervisor reimbursed the county for $2,387.41 in purchases that included an $869 rental car from Walnut Creek, a $469 Southwest Airlines airplane ticket and a $583 outing at The Revere Golf Club in Henderson, Nevada.

County officials are no longer commenting publicly about Metro’s reports on Shirakawa, which initially started when it was found that the supervisor had failed to file campaign disclosure forms the last four years. His 2008 campaign to become District 2’s supervisor ended with Shirakawa $110,000 in debt, and almost a third of that amount came from personal loans he made to the campaign.

The county Board of Supervisors discussed the P-Card program last Tuesday at its bi-weekly meeting. (Click on the “video” link for the Nov. 6 meeting and fast-forward to 2:00:40.) The discussion, initiated by County Executive Jeff Smith, danced around Shirakawa’s situation while never mentioning it specifically. The discussion stressed a need to streamline P-Card policies and procedures.

County Counsel Lori Pegg said it would be difficult to bring back recommendations on how to streamline the P-Card ordinance and policies by the Nov. 20 meeting, but Supervisor Ken Yeager pushed Pegg to have a report, even if just in initial stages, by then. The current county P-Card policy was revised as recently as last year.

Yeager specifically wanted to know if policies regarding county meal reimbursements and submitting itemized receipts would be consistent across the board for county employees. Pegg said they would. Yeager also called for “more robust audits” and making sure consistent procedure is applied to all county employees, “including elected officials and executive management.”

Yeager added: “Certainly, this has been brought up by the press. But I think I want to make sure we stay ahead of the game with other type or ordinances and other kinds of transactions, just so we don’t have this as a repeated problem.”

Dave Cortese was the only other supervisor to speak on the matter at the Nov. 6 meeting, which is remarkable because later that night, in an interview at the South Bay Labor Council’s election night party, Cortese told a reporter that he was completely unaware of Metro’s report regarding Shirakawa’s P-Card purchases and fraudulent expense reports.

Earlier that day, however, Cortese said at the supervisors’ meeting: “One thing I would suggest, and this is why I asked to speak, there are some things that have come up over the last couple weeks when you go back and look at the policy—what I call conflict in the policy—that could be cleared up real quickly.” He did not elaborate with specifics.

About a minute later, Shirakawa made his first comments on the matter by asking for the supervisors to approve of a report on P-Card policies. It received unanimous approval.

Josh Koehn is the news editor for San Jose Inside and Metro Newspaper. Email tips to josh@metronews.com or follow him on Twitter at @Josh_Koehn.

10 Comments

  1. Shirakawa is emblematic of the worst of our politicians.  “Glutton Gate” will eventually take him down, along with many of those who associate with him.  It’s my hope too that the crack audit team be terminated.

  2. Does seem like Yeager and Cortese are trying to lay the groundwork for some sort of defense based on confusion.  Normally that’d be a good defense for Shirakawa, but not in this case.  These people should be calling for his head, but they’re acting in a complicit manner.

    Are they expecting the Merc to be silent forever?  Hmmm, maybe they know more than they’re letting on.

  3. Interesting that the county counsel’s office played a role in all this.  Ann Ravel held the head position there from 1998 to 2009.

    She will be known to SJI readers because of her recent prominence as head of the state’s Fair Political Practices Commission when she filed suit just days before the November election against Arizona contributors opposing Proposition 30 and for Proposition 32.

    It is curious how quick she was to move against an Arizona organization, but how slow she was to establish adequate guidelines for Santa Clara County officials spending tax dollars.

    How many officials, former and present, will be drawn into the Shirakawa scandal?

  4. Once again, Metro, SJI, and Josh deserve credit for pursuing the exposing of this corruption. It’d be nice if Shirakawa suffered some consequence.
    But I guess in a city full of Democrats a Democrat has to do more than abuse his publicly funded credit card in order to warrant any interest- let alone outrage.

    Thanks again, Rich Robinson, for inflicting this creep on us.

  5. Ya except Chuck Reed pretty much the same thing – only difference is he didn’t use a credit card. Chuck bought tickets to sports events, paid for memberships to different organizations and made charitible donations, donations to PACs and made campaign donations out of his own pocket THEN reimbursed himself for his expense with TAXPAYER MONEY out of his office budget to the tune of $40k+/-.

    Chuck got caught with his hand in the cookie jar then quickly repaid what he stole and the whole thing was swept under the rug.

    My advice to Shirakawa would be to follow the “ethical” principles of Chuck Reed and figure out how much he spent in “error” or without “full understanding” of the County’s rules add 15% (call it a tip or interest or whatever), cut the county a check and promise to never do it again…

    …and move on.  Chuck did, San Jose did, the Merc did, the Metro did and SJI did and so can we.

  6. One of the faults with our Jacksonian hybrid civil service system is that some folks are protected (civil service/unionized) employees, and others are at will appointments subject to removal without cause.  Add partisan politics into that mix along with lean budgets and turf fighting and it gets weird really fast.

    So while I may understand and empathise with the neglicence of this auditor who discovered an ongoing pattern of abuse of public funds (she had to check with her boss whether brining this to light were affect the department budget) I have to also say they failed in their duty as a public servant and regardless of employement status (at-will or unionized) they should be dismissed with cause for failing to exercise care and diligence in their duties.  In terms of the HR fallout, there’s the reak of politics all over this, so its clear the systems of justice will be clogged with partisan arguements, pleas, delay tactics, etc.

    In reality, if your a fiscal watchdog, hired as an auditor to watch over the spending of other people’s money, you report problems (unless you work for ENRON or Bernie Madoff) and if your boss doesn’t want to hear it, you go outside normal channels and receive “whistleblower” protections.