Tuesday, August 08, 2017

SEC Investigation Question for Former Los Osos CSD Director, and Current Iowa House Representative, Stan Gustafson

TO: Stan Gustafson (R), Representative, District 25, Iowa Legislature
DATE: August 8, 2017

Hello Representative Gustafson,

I'm a blogger in SLO County, and I'm researching a story involving a SEC investigation into the Los Osos Community Services District, and I just have a quick question for you involving a key piece of evidence in that investigation.

The evidence is the LOCSD's "Summer 2000" newsletter, that I have made available for public download at this link:

According to the newsletter, you were a LOCSD Director, and a member of its "Wastewater Standing Committee" at the time.

Here's the screenshot (hopefully you can view it):

Now, in that newsletter it describes (in detail) a sewer system that you, as a LOCSD Director and Wastewater Standing Committee member, had been developing (for the previous two years) for the community of Los Osos -- a so-called "STEP/STEG" collection system with a "70-acre" treatment facility in the middle of Los Osos, comprised of several large ponds.

Additionally, your "Summer 2000" newsletter goes on to describe the 70-acre ponding system as "on schedule."

The newsletter also states that for your "better, cheaper, faster" sewer project to move forward, that, "yes," a property tax assessment vote would need to be passed by Los Osos property owners, and then outlined a series of dire consequences that would result if the assessment did not pass.

The newsletter, along with a lot of other LOCSD marketing material during the run-up to the assessment election, did the trick, and, as you know, the assessment passed a few months later.

However, as my investigation into this story clearly shows, including at this link:

... a March 7, 2001, LOCSD report shows that the 70-acre ponding system that you, as a LOCSD Director and a member of its "Wastewater Standing Committee," told "the residents and property owners" of Los Osos was "on schedule" in "Summer 2000," had actually completely failed by February 2000.

I asked an attorney if the above-scenario -- where a government agency produces a newsletter that states that a public works project is "on schedule," when the agency's own documents show that the agency was fully aware that the project described in the newsletter (in detail) had completely failed some six months earlier (and, frankly, was never even close to being a feasible option in the first place) -- constitutes fraud, and he told me, "Yes."

Furthermore, the reason I am asking you this question today (well, OTHER than that whole 'SEC investigation' thing), is because, as you also know, that property tax assessment vote that the newsletter heavily promoted for a "yes" vote (an election violation, by the way), and that was eventually passed back in 2001 to fund a known-to-be-fake "project" (that never even came close to being built), allowed the LOCSD, with you as a Director in 2003, to sell nearly $18 million in municipal bonds, and, as you also know, those bonds are (present tense) 30-year bonds, that are secured by the roughly $1.2 million per year that is collected from about 4,200 Los Osos property owners (at about $250/year) due to that assessment, an assessment that doesn't expire until the year 2033, for a fraud-based "project," that will never exist, of course.

In other words, the LOCSD's completely fraudulent "Summer 2000" newsletter -- and I mean, like, every word in that newsletter is a complete, and easily documentable, lie, and it has your name all over it (and in really bad places, I will point out) -- and, as the evidence clearly shows, was produced solely to trick Los Osos property owners into passing the assessment -- is STILL 100-pecrent relevant today, and will continue to be 100-pecrent relevant, 100-percent in play, until the year 2033, and, frankly, beyond.

So, with all of that in mind, my question for you today is: Why?

Why, as a LOCSD Director, and a member of its "Wastewater Standing Committee, did you send out a newsletter, in the Summer of 2000, to all "the residents and property owners of Los Osos," telling them that your known-to-be-DOA, "better, cheaper, faster" sewer project was "on schedule," and that, "yes," the property owners would have to pass an assessment vote to fund it (again, an election violation), when you were fully aware that it had already officially failed some six months earlier, and, in reality, was never even a feasible option to begin with?

Or... repeat: OR, were you even aware that your fellow LOCSD Board Director, and Waste Committee member, Pandora Nash-Karner was going to produce, and then mail that newsletter, as she confesses to doing at this link:

... and when you first saw that newsletter -- a newsletter dedicated almost completely to advertising the long-failed 70-acre ponding system as "on schedule," and "better, cheaper, faster," and with your name all over it -- did your jaw hit your desk?

Which one of those two is it?

Finally, I want to point out that there is a gigantic stack of evidence that shows that the Karners would/did benefit financially from the passage of the LOCSD's 2001 wastewater assessment, so, it makes PERFECT sense why Pandora Nash-Karner would produce, and then mail, that fraudulent "Summer 2000" newsletter.

However, what I can't seem to find, is one shred of documentation that shows that YOU (or your other fellow board members [sans Nash-Karner]) benefited financially from the passage of that fraudulent assessment, which makes me think that, of those two options above, it was the latter: You (and your fellow board members, by the way) had no idea that Nash-Karner was producing and then mailing out that fraudulent OFFICIAL LOCSD newsletter, and when you first saw it -- AFTER it was mailed to "the residents and property owners" of Los Osos  -- your jaw hit your desk.

That's it, isn't it?


1)  Did you, like the Karners, benefit financially from the passage of the LOCSD's wastewater assessment, and therefore signed-off on that fraudulent newsletter BEFORE it went out?


2) Were you even aware that your fellow LOCSD Board member, Pandora Nash-Karner, was producing/mailing that "Summer 2000" newsletter, and when you first saw it -- AFTER it was mailed out -- your jaw hit your desk?  

Which one is it?

If you have any questions, please just ask.


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P.S. In my own, personal, and, yes, I will add, beautiful editorial policy of what I like to term "open source journalism," I have cc'd this email to numerous media-types (and others), and have also published it on my blog, at this link:

Thanks again.



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