Santa Clara County Supervisor George Shirakawa racks up lavish expenses on public's dime
By Karen de Sá and Tracy Seipel
Mercury News
Posted: 11/18/2012 08:50:16 AM PST
Living the high life, Santa Clara County Board of Supervisors President George Shirakawa Jr. teed off at the Revere Golf Club last fall -- just minutes from the Las Vegas strip -- and charged the $583 bill.
When the burly, red-cheeked public official flew to the East Coast last year for a violence prevention forum, he upgraded to first class -- quadrupling his airfare to $2,605.
Shirakawa enjoyed these perks even though he didn't have a penny to his name, according to bankruptcy court filings. The veteran county leader declared personal bankruptcy in March 2011, despite his $143,031 salary. And the lavish expenses? County taxpayers picked up the cost.
Shirakawa may be broke, but the 50-year-old supervisor has a history of spending freely with taxpayer funds. And with lax county oversight, his constituents have no idea they've been paying as Shirakawa dines with his staff members and a who's who of San Jose leaders in what in many cases appears to be a violation of county policy and federal law.
Over the past four years, Shirakawa has gone on a free-wheeling $36,717 spending spree with his county-issued "P-card," dining out at least 180 times -- often in some of the region's most exclusive restaurants.
Shirakawa's spendthrift behavior as supervisor since 2009 is now the subject of an expanding criminal inquiry by local prosecutors. He is simultaneously under investigation by the state's political watchdog agency, and he is facing tens of thousands of dollars in fines for missing campaign finance reports from his 2008 run for office. Some of the abuses of the credit card and missing campaign finance reports first were reported in the weekly Metro newspaper.
Revelations of Shirakawa's lavish spending are forcing the county to tighten its policies governing how supervisors and other county executives with credit cards spend the public's dime. The board will discuss the expense cards at its meeting Tuesday.
But Shirakawa's scandalous expense account is adding to a series of questionable practices by this son of a respected San Jose politician; he has come under fire for such things as failing to pay income taxes and arranging for his friend to be his $90,000-a-year bodyguard.
Publicity of Shirakawa's latest troubles has angered many in his working-poor district.
"I'm offended that one of our elected officials would conduct his affairs in such a disgraceful manner," said former Supervisor Blanca Alvarado. "That he thinks he's above the law and uses his position for self-privilege -- it's shameful, it's disgraceful, it's very hurtful."
As president of the Board of Supervisors, Shirakawa oversees a $4.2 billion budget for a county whose voters just approved a 10-year tax hike after years of recession that obliterated a host of social services. Yet documents show he has managed his personal and professional life with, at the very least, careless disregard. At most, authorities note, his behavior could be criminal.
Local policies and federal law explicitly prohibit the use of public funds for alcohol, donations and pure entertainment -- all of which Shirakawa appears to have charged to taxpayers. County policy also limits what top officials can charge for meals -- $30 is the maximum for dinner, for instance -- and Shirakawa routinely blows through those limits. In all cases, itemized receipts are required.
But in Shirakawa's case, he has regularly been unable to provide the receipts. Instead, on almost 250 charges over the past four years he has filed dozens of far less detailed "Missing Receipt Memos," such as the one for a $548 dinner at the Fairmont Hotel with San Jose police Chief Chris Moore and his police command staff earlier this year. Moore told this newspaper he had no idea the dinner was being charged to the county. He has since reimbursed the county for $400.
Shirakawa and his top-level staff members have denied repeated interview requests, although he prepared a statement in September: "For 20 years, those I represent know that I've always been open and transparent about my public affairs." He takes his public duties seriously, he added, standing up for the most vulnerable and completing his administrative duties "in a timely manner."
To be sure, some of Shirakawa's questionable spending has alarmed county auditors and led to reimbursements. Mostly, he has had to mop up after county-funded trips to casinos, luxury resorts and golf courses. On at least 16 occasions over the past two years, Shirakawa has reimbursed the county for questionable expenses totaling almost $5,200 -- including a payment to the California Democratic Party of $195. Since 2009, Shirakawa has paid back what he described as "inadvertent" charges from the Rio resort in Las Vegas, Harveys Casino in Stateline, Nev., the Thunder Valley resort and casino in Lincoln, Calif., and Los Lagos Golf Course in San Jose. He also repaid the county for the $583.78 he spent at the desert canyon Revere Golf Club, where he stayed in early October 2011.
Shirakawa's troubles are not lost on colleagues of his late father, George Shirakawa Sr., who was highly regarded during his days as a San Jose councilman.
"My heart goes out to him -- it should not have gotten this far. Why, why George, why? I just can't come up with an answer," said Frank Fiscalini, a former City Council colleague who was a friend of his father's.
Meanwhile, his four board colleagues used their cards far more judiciously, public records reveal. At most the other supervisors charged only a handful of restaurant bills. Although Supervisor Dave Cortese spent slightly more than Shirakawa -- $41,893 over the past four years -- the charges were mostly for office supplies, parking and some airline travel.
Shirakawa went so far as to use his card for charitable contributions, such as $2,500 to a local school district education foundation, and to buy a $394.86 high-definition television and a classy $627.85 see-through fridge for his county office.
Perhaps more alarmingly, no one at the county tried hard to stop him.
"There's a clear violation of county policy here," said county Assessor Larry Stone, "and quite frankly I'm surprised more by the lack of enforcement of the county than I am with the people who are allowed to get away with it."
Annual audits by the county controller's office -- in 2009, 2010 and 2011 -- revealed minor discrepancies with Shirakawa's expenses, but overall gave his office a thumbs-up, calling his credit card transactions "well-organized and maintained."
"It's not an oversight problem, it's a problem with the policies and procedures," insisted county Executive Jeff Smith, who would not comment on Shirakawa's case. "I don't think the issue is enforcement. I think the policies were confusing."
Confused or not, Shirakawa has had difficulty managing his own money, let alone the taxpayers'. In March 2011, the supervisor voluntarily declared Chapter 13 in U.S. bankruptcy court. But even there, Shirakawa has performed poorly.
Months into the legal process, court records show he was unable to provide a government-issued photo ID, proof of a Social Security number and a copy of his most recently filed tax return. Court filings reveal he checked "none" on his cash on hand amount, and a checking account balance of $0, although he reported $1,000 in "various guns and firearms."
Shirakawa regularly treats his core seven-member staff to lavish meals. Last year, a Dec. 20 holiday lunch at the Fairmont cost taxpayers $451.79; a "staff retreat" on Oct. 13, 2011, dinged the public for a $217.98 bill at the Cheesecake Factory.
Earlier this year -- before this newspaper in June exposed that Shirakawa had arranged for the county to hire his friend Alex Flores as his bodyguard -- taxpayers paid for the two to dine together for $56 on Feb. 1 at Red Lobster.
And in at least one instance, Shirakawa also rang up alcohol bills on his county-issued credit card, a clear violation of both local and federal rules on use of public dollars. A Feb. 17 $97.15 dinner at P.F. Chang's China Bistro included two Stella Artois beers, a Devil's Canyon Amber draft and a piña colada. Shirakawa's guests included San Jose's deputy city manager, Norberto Dueñas, and City Councilman Xavier Campos.
Public records show Shirakawa has a history of missteps.
After his first marriage ended in 1985, he failed to make court-ordered child-support payments, for which he was prosecuted and convicted in 1987 on a misdemeanor charge.
Over the years, he has had four tax liens placed on his property for unpaid state and federal income taxes.
In 1994, when Shirakawa Jr. was being considered to succeed his father on the City Council, Alvarado presided over a community meeting at which numerous women came forward to protest that appointment because of Shirakawa's failure to pay child support. Now, years later, Alvarado is revisiting those early warning signs.
"It pains me deeply," she said, "that a man the public put a lot of trust in would be so indifferent to that public."
News researcher Leigh Poitinger contributed to this report. Contact Karen de Sá at kdesa@mercurynews.com and Tracy Seipel at tseipel@mercurynews.com.
Santa Clara County audit reveals Shirakawa must immediately reimburse $12,772 in credit card purchases
By Karen de Sá and Tracy Seipel
Staff writers
Posted: 12/03/2012 08:40:00 PM PST
Together with what the board president already has had to pay back, if Shirakawa complies with the latest crackdown, he will have had to return more than half of his 240 credit card charges totaling $36,837 for his four years as a supervisor.
The audit follows several reports in the media about Shirakawa's flagrant use of his "procurement card," designed for small-item purchases and county business trip expenses.
But Shirakawa, who filed for personal bankruptcy last year, appears to have used his P-card as if it were his own personal fund, charging his constituents for golf fees in Nevada, casino hotel stays and unauthorized rental car upgrades. Then, he failed to properly report his charges: County auditors found Shirakawa spent $10,354 in 174 visits to local restaurants for which he never filed the required itemized receipts, instead filing less detailed missing receipt memos. Although these same auditors have reviewed Shirakawa's use of the card three times since 2009, until the media exposure they never pointed out a pattern.
Auditors noted in Monday's report that while county policy allows for missing receipt memos "on
an exception basis," in Shirakawa's case "the exception became the norm." The strongly worded audit also said that on "several instances" the supervisor "did not comply with the County's policies for P-Card usage, procurement, travel, or local business meals," and auditors found "many irregularities in the examined P-Card usage."
In his three-page response to the audit, Shirakawa pointed to memos in 2009, 2010 and 2011 by the Controller-Treasurer Department that stated in part that the supervisor's credit card charges for all three years "followed the policies and procedures set forth in the Procurement Card program." Shirkawa's office declined to comment on the audit when contacted by a reporter.
He also highlighted statements in those memos that said Shirakawa's credit card records were "well-organized and maintained."
Yet Shirakawa appeared to agree with most of the audit's findings and said he would submit reimbursements -- or has already paid back -- many of the expenses within 30 days. He noted, for example, he has reimbursed the county for the $175 he charged for the Democratic Party state convention registration fee.
But he is disputing other charges that he is being asked to repay, such as $175 worth of gift cards to a community group and a $2,500 donation to the East Side Union School District. Shirakawa also is pushing back on returning funds for more than 50 staff lunches he paid for at a taxpayer cost of $4,758. He said those meals could be justified "on a case-by-case basis, if it is more efficient and productive to meet with individual staff members in the field, rather than return to the County Government Center, to prepare for upcoming meetings held in the community that same day."
Any disputed charges will be reviewed again by the county auditors and ultimately may have to be resolved by the full Board of Supervisors.
Shirakawa, who recently lashed out at media reports of his spending -- describing them as a "political lynching" -- said he will, however, reimburse the county $1,230.17 for meals related to "social functions."
It may be tougher to push back with two other authorities reviewing Shirakawa's accountability to constituents. The board president is under investigation by the Santa Clara County District Attorney's Office for possible criminal misuse of public funds, and the state's Fair Political Practices Commission is examining Shirakawa's failure to file campaign finance reports from his 2008 run for county supervisor. Failure to provide those key documents could cost the veteran politician tens of thousands of dollars in fines.
The county audit released Monday noted that Shirakawa did respond previously when red flags were raised, reimbursing the county $7,049 for "various personal charges." But the paybacks were far from timely. "Most of these reimbursements were made several months after the card was first charged," auditors noted, adding: "These personal purchases violated County policies and should never have been charged to the county-issued PCard in the first place."
County auditors say they are not done yet. The Controller-Treasurer will now audit all spending in Shirakawa's District 2, including his staffers' credit card transactions, many of which also include questionable meals and missing receipts, this newspaper found. County officials also vow to tighten up their policies and procedures "in order to avoid confusion and provide uniformity" in implementing county policies.
Details on the proposed credit card policy revisions are expected to be presented to the board at its Dec. 18 meeting.
Supervisor Ken Yeager is seeking to get ahead of the curve at the board's Tuesday meeting by recommending that all elected county officials who have county-issued credit cards submit a quarterly report of their credit card expenses to the board's agenda for public review. From now on, Yeager also wants all records of credit card charges by elected county officials to be routed to either the County Finance Department or County Executive's office for scrutiny.
After all, Yeager said, until the reports about the credit card abuses surfaced in the local media, "nobody had any idea what people were spending the money on."
"It's really important that there is full transparency about our expenditures," he said. "It's public money, and the best way to make sure we are all following the rules is to have us report out in an open meeting for everybody to see what we are doing."
Yeager, who in January will assume the board presidency after Shirakawa's troubled tenure in 2012, said it's time to "earn the public's trust back."
"Clearly there has not been enough oversight of these expenditures," Yeager said. "Even though we have many policies in place, often administrators don't know how to be critical of the expenditures by elected officials who in many instances might be their bosses."
Contact Karen de Sá at kdesa@mercurynews.com or 408-920-5781 and Tracy Seipel at tseipel@mercurynews.com or 408-275-0140.
Shirakawa ordered to pay back $12,772 in credit card purchases
The only thing that surprises me about this is the government want him to pay pack the money he stole from the taxpayers. Usually they come up with some lame excuse why our government masters should be allowed to keep the loot they stole from the taxpayers.
A scathing internal audit released Monday finds that Santa Clara County Board President George Shirakawa Jr. used his taxpayer-funded credit card to pay for his personal expenses and for items "strictly prohibited" since he took office in 2009 and demands the District 2 supervisor "immediately reimburse" $12,772.