Ex-Palm Springs mayor and 2 developers charged with corruption involving $375,000 in bribes

Reporting from Riverside —  As Palm Springs’ chief booster for nearly a decade, former Mayor Steve Pougnet came to define the city’s hunger for development and renewed prosperity. In recent years, the town, once a favorite desert watering hole that attracted visitors from around the globe, has boomed, with cranes dotting the skyline and the hum of construction competing with desert winds.

But some of that expansion may be tainted, said prosecutors, who on Thursday accused Pougnet of accepting $375,000 in bribes from two developers whose projects he promoted.

Pougnet, 53, and developers Richard Meaney, 51, and John Wessman, 78, were charged with a combined 30 felony counts of corruption, including paying and accepting bribes, conflict of interest, perjury and conspiracy to commit bribery. Pougnet served as mayor for eight years before stepping down in 2015.

Pougnet faces up to 19 years in state prison, while the two developers face up to 12 years each behind bars. The trio are expected to surrender to authorities within days.

“We simply cannot tolerate corruption in government at any level,” Dist. Atty. Mike Hestrin said at a news conference. “With all bribery, it was about buying influence.”

Wessman, the city’s biggest developer, along with Meaney paid bribes to gain influence in City Hall and beyond, Hestrin said.

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“This was a bribe and not just business,” the prosecutor said. “It was pretty brazen, and it was pretty obvious.”

Hestrin said money was funneled to the former mayor through a shell company from September 2012 to September 2014.

The charges come 17 months after investigators from the FBI and the Riverside County district attorney’s office seized documents from City Hall and the mayor’s home as part of a public corruption investigation.

City incentives in recent years have spurred hundreds of millions of dollars in investments that are transforming the landscape of the desert city in the heart of the Coachella Valley.

The investigation has already cast a shadow over a $300-million retail, restaurant, office and hotel project designed to reshape downtown Palm Springs. The city invested $43 million in the venture, which involves replacing a decaying mall. Wessman’s company and the city are partners in the project.

“Unfortunately for Palm Springs … there’s going to be some difficulties in untangling this,” Hestrin said.

Pougnet is charged with nine counts of receiving bribes, eight counts of conflict of interest as a public official and three counts of perjury, plus an allegation of conspiracy to commit bribery.

The ex-mayor received nine payments and cast 11 votes on projects connected to the developers that required City Council approval, prosecutors said.

Pougnet, prosecutors said, did not reveal the payments and connections on his annual conflict-of-interest forms as required by law.

“This is a large amount of money that was paid to the mayor for his influence on the City Council,” Hestrin said. “The mayor is very influential, and these individuals had a lot to gain.”

The Sept. 1, 2015, raids came after a series of articles in the Desert Sun newspaper showed that Pougnet, while mayor, worked as a consultant for Meaney during the same period he voted to sell city property to the developer and another investor.

After the Desert Sun in 2015 revealed that Pougnet received more than $200,000 — now alleged to be $375,000 — from firms run by Meaney, Pougnet claimed he’d been hired to educate the developer on local development laws.

In the wake of the public corruption probe, Pougnet said his vote to approve the sale to Meaney of a 29,185-square-foot property called Casa Del Camino was a mistake. Besides the property deal, Meaney also benefited from a $250,000 city economic development grant meant to help redevelop vacant properties — a vote from which Pougnet abstained, according to city records.

Neither Pougnet, Meaney nor Wessman could be reached for comment.

In a statement, Michael Braun, senior vice president of Wessman Development said that as of Wednesday, Wessman had retired from his position as president of the company and was no longer involved in management or day-to-day operations.

“While John Wessman denies all of the allegations of the complaint, which he will vigorously defend, the paramount concern of John Wessman, Michael Braun, all of the Wessman entities and the entirety of the staff, is to ensure that all projects proceed in a timely manner to completion,” Braun said.

Malcolm Segal, Pougnet’s attorney, said he had yet to examine specifics of the charges. But he said his client properly disclosed his income and is “really saddened” by the allegations.

“Steve Pougnet always did his best for the people of Palm Springs,” Segal said. “He made every financial disclosure required of him and did so truthfully. He worked very hard to bring downtown Palm Springs back during his years in office.”

The attorney said it would be a mistake to believe that Pougnet alone could steer City Council decisions. “He was just one vote of five on every decision by the City Council,” Segal said.

Pougnet first joined the council in 2003 and became mayor in 2007. After the 2015 raids, he declared, “I am happy to cooperate with the inquiry going on at City Hall, just as I have always been fully cooperative and open in all of my many years as an elected official in Palm Springs.”

Sorting out ongoing development projects will involve “a complex analysis by legal and business experts as to the best way to proceed with each of these properties,” a statement released by the City Council said.

The charges came as no surprise to some City Hall watchers who said developers wield too much influence over how public dollars are spent in the desert town, which was once a playground for Hollywood’s biggest celebrities.

“I am thankful they have finally brought the charges,” said Judy Deertrack, an attorney who works on development issues. “The city has been under a cloud of uncertainty for the last 17 months.”

richard.winton@latimes.com

Twitter: @lacrimes

Times staff writer Paloma Esquivel contributed to this report.

UPDATES:

7:05 p.m.: This article was updated with information from the City Council and comments from an official with Wessman Development.

2:45 p.m.: This article was updated with additional details about the corruption charges and investigation and comments from prosecutors and Pougnet’s attorney.

This article was originally published at 11:30 a.m.