The former chief of staff of San Diego City Councilman Stephen Whitburn, Jesus Cardenas, along with his sister, Chula Vista City Councilwoman Andrea Cardenas, are facing multiple felony charges from San Diego District Attorney Summer Stephan.
Stephan’s office announced Wednesday that it would prosecute the Cardenas siblings, who operate a political consulting firm together, for “false pretense, grand theft, conspiracy to commit money laundering, money laundering (and) failure to file tax returns.”
The two have long been in the middle of controversy, usually due to questions about how they balance their private consulting clients with their public responsibilities as leaders in the city of San Diego and city of Chula Vista. Jesus Cardenas felt obligated to resign from his role on Whitburn’s staff in April after the U-T revealed that their firm, Grassroots Resources, had collected $200,000 in fees despite being suspended for not filing taxes.
But these new charges related to the federal COVID relief funds Grassroots Resources collected.
The complaint, in short: The DA alleges Jesus Cardenas claimed he had 34 employees when he applied for a Paycheck Protection Program (PPP) loan from the federal government during the COVID pandemic. The loans were popular and forgivable – if companies continued to pay their employees, they would not have to pay back the loans. They say he used the money for personal expenses, not employees.
Prosecutors also said Jesus Cardenas lied about it not being a political consulting firm and failed to disclose the employees claimed were actually employees of a cannabis distributor. Selling cannabis is still illegal on the federal level and that would have made the application for the loan not valid. They say Andrea Cardenas helped Jesus Cardenas with the loan application and they both laundered money.
In February, La Prensa first reported on the questionable PPP loan.
How Imperial Valley Spends San Diego Water Money
San Diego gets roughly 40 percent of its water supply from a purchase agreement it made with Imperial Valley. Even though much of the valley is a desert, the farmers there have more rights to Colorado River water than any other jurisdiction in California. That’s the same water San Diego, in turn, buys.
As a result, San Diego pumps cash into Imperial Valley. Last year, we bought $148 million of water from the Imperial Irrigation District.
Environment reporter MacKenzie Elmer recently traveled there to see what all that money actually buys. She visited a newly-built reservoir designed to store water and, ultimately, make farming practices in Imperial Valley more efficient.
While Imperial Valley is able to better conserve water with San Diego’s cash, San Diego has a slightly different problem. Because San Diegans have learned to conserve so well over the past decade and because we purchased such a large share of water rights, our arid landscape has a glut of water.
Local leaders don’t want to give up those water rights, because they’re somewhat cheaper than the other investments we would have to make to get water if and when we need it. They’d like to sell off our excess Colorado River water to others, but currently that’s not allowed.
“So, for now,” Elmer writes, “San Diego will trade cash for water supplies at a high price. It’s a very lucrative arbitrage for Imperial County. Imperial Valley farmers pay some of the cheapest prices for Colorado River water, around $20 an acre foot. San Diego pays the Imperial Irrigation District $730.10 for that same acre foot of water.”
Palomar Health Is Getting Sued by a Board Member
A director on Palomar Health’s board is suing Palomar Health, and Voice of San Diego is at the center of it.
Laurie Edwards-Tate, an elected board member of public health care district Palomar Health, is suing the district after Palomar Health’s attorneys told her she was being investigated because of a comment she made to Voice.
Experts said that was likely a violation of state law because Palomar Health is a public institution.
The board member is now suing Palomar Health for violating her First Amendment rights.
North County Report: Controversial Housing Rules, Rising Costs of Water and A New Partnership
The past few weeks have brought some significant policy proposals and decisions from North County’s city and health care leaders.
That includes a potential new safe parking lot, proposed water rate increases, a controversial housing decision and a major announcement from two hospital systems.
Our Tigist Layne is breaking down what you need to know and the upcoming developments to keep an eye out for.
In Other News
- A proposed community development plan would allow developers to build up to 30 stories tall in Hillcrest. (Worth it just to see the hilarious rendering.) (NBC 7)
- A home in Del Mar sold for just over $44 million. That’s the most expensive home sale in San Diego County’s history. (FOX 5)
- The San Diego Padres had to take out a $50 million loan towards the end of the season, partly to cover payroll, despite having record breaking attendance. (Union-Tribune)
The Morning Report was written by Will Huntsberry and edited by Scott Lewis.