An elected board director of a regional water agency, his wife and a board director of another water agency have pled not guilty to felony corruption charges, including embezzlement and conflict of interest, filed last week by the Los Angeles County District Attorney’s (DA) office.
Robert Katherman, 68, a former lobbyist and aide for a Los Angeles city councilmember and a Division 2 board director for the Water Replenishment District of Southern California (WRD), and his wife, Marilyn Katherman, 65, surrendered last Tuesday, Aug. 5 after being charged with “an elaborate embezzlement scheme” to help Ron Smith, 55, a board director and former treasurer of another water agency, pay about $20,000 in personal expenses, according DA officials.
Smith and the Kathermans are due back in Los Angeles Superior Court in Department 4 in Torrance on Aug. 27 for a preliminary trial-setting hearing. Deputy District Attorney Alison Matsumoto Estrada, with the public integrity division, is assigned to the case.
Prosecutors said that the embezzlement scheme occurred after Smith got the West Basin board to make “multiple contributions to help sponsor the Adopt A Storm Drain Foundation, a nonprofit educational foundation to promote water conservation, run by the Kathermans,” according to a statement from the LA DA’s office.
The contributions occurred over a three-year period, beginning in August 2010.
During the same time period, Smith also contributed money from his district outreach fund that did not need board approval, prosecutors said.
Shortly after receiving the West Basin donations, prosecutors allege that the Kathermans began writing checks from foundation accounts to schools and organizations that had no connection to the foundation.
The checks allegedly covered school and college tuition and paid for tennis and dance lessons for Smith’s children. Adopt A Storm Drain checks also allegedly paid for repairs to Smith’s boat and his rent. Smith also allegedly wrote checks from his West Basin discretionary account to pay various school expenses for his children. In all, about $20,000 was stolen, prosecutors said.
If convicted, Smith faces up to nine years in state prison. The Kathermans each face up to four years in state prison if convicted as charged. The case remains under investigation by the Torrance Police Department.
On Monday, Aug. 4, the day before charges were filed against him, Robert Katherman resigned from his position as deputy chief of staff for Los Angeles City Councilmember Curren Price, Jr., confirmed Connie Llanos, spokesperson for Price’s office. She said Katherman had worked for the councilmember since July 1, 2013.
The WRD issued a statement regarding the charges, stating that the “allegations are not related to WRD or its operations and the District will continue our steadfast commitment to provide safe, reliable and affordable drinking water to the district’s four million residents.” The water agency added, “WRD has earned a reputation for public transparency and sound fiscal operations as reflected by our national awards for financial accountability and for innovative groundwater projects.”
Pete Brown, spokesperson for WRD, said in an email that Katherman “continues to serve in his elected position.” Division 2 covers an area that includes territories such as El Sugundo, Rancho Palos Verdes and San Pedro.
In a phone interview with the Signal Tribune, Katherman said he is innocent and the allegations that have been brought against him and his wife are “inaccurate” and “unfounded.”
“Checks were written, that is true, to various charities with the intent to donate to those charities for water-education programs,” he said.
Katherman said Cathy Beauregard, a bookkeeper and a co-founder of the Adopt A Storm Drain nonprofit, brought the charges to the DA as a way to retaliate against not being elected president of the nonprofit’s three-member board, which consisted of the Kathermans and Beauregard.
“I have several hundred emails she has sent my wife and I, proving that she resigned because I would not make her president,” he said. “She felt this was her nonprofit in spite of the fact that I was the one that paid the attorney and organized, did all the paperwork and followed up and that she had rights to it after I was no longer president of the board.”
Beauregard, however, said in a phone interview with the Signal Tribune that she started confronting Katherman in 2010 about checks that he was writing and wasn’t properly accounting for them in the books. She eventually resigned from the nonprofit at the advice of her attorney.
“I thought if they’re going to use the board for illegal purposes then I didn’t feel comfortable being executive director of the board,” she said. “For every single penny I spent in that nonprofit, I told Rob about what I was spending it on. There was not one penny in which Rob did not get a phone call or email telling him what I was spending that money on. Rob was continuing to write checks and do things without notifying me.”
Katherman said he was “shocked” and “dismayed” to learn from the DA’s investigation about what had happened with the checks, adding, “I just couldn’t believe it.”
Katherman said he had sent checks to Marymount College and Palos Verdes High School but learned Smith used the money for his rent. Still, Katherman said it must have been a “misunderstanding.”
“Basically, that was a misunderstanding between he and I,” Katherman said. “We thought it was going to be used for rent for part of the garage for some of our tools and equipment.”
Katherman added that he wrote checks to an organization to provide money for a “boating and water-shed education experience for kids” but recently learned that the money was used to repair Smith’s boat instead. Smith could not be reached for comment before the Signal Tribune’s deadline.
During a special meeting on Tuesday, Aug. 5, the West Basin Board of Directors voted unanimously to remove Smith as treasurer and assigned the responsibilities to West Basin’s Chief Financial Officer Margaret Moggia. The board also directed staff to implement a combined forensic and financial audit of the outreach and sponsorship funds and any other relevant programs. An external, independent auditing firm will conduct the audit. The board also directed staff to report all findings and any associated recommendations upon completion of the audit.
“I fully support the immediacy of the Board’s actions today to address the serious nature of the alleged charges against Ronald C. Smith. The Board and staff remain fully committed to continuing to meet the mission of the District,” West Basin Board President Donald Dear said in a statement.
As first reported by the Signal Tribune, Katherman is listed in records as the principal officer of Coalition for Clean Affordable Water, a political-action committee that funded campaign mailers in an attempt to unseat longtime Signal Hill city councilmembers in an election in 2013.
Signal Hill city officials called the mailers “hit pieces” and “smear tactics” and claimed the mailers, funded by WRD lobbyists, attorneys and consultants, according to records, were a blatant attempt to influence the local election with outside money, connecting the campaign to retaliation for an ongoing legal battle between the City and WRD over allegedly failing to follow state law for raising water replenishment assessment rates.