From the daily archives: Tuesday, January 26, 2010

By Mario Conde

The County Board of Supervisors approved a resolution designating Imperial County as Federal Recovery Zone in order to be eligible for Federal Funding.

With this action the County intends to apply for money from the American Recovery and Reinvestment Act of 2009 for the purpose of issuing Recovery Zone Facility Bonds and Recovery Zone Economic Development Bonds. The County intends to get these bonds that are tax-exempt bonds that may be used by private businesses or non-profit organizations to finance a broad range of projects.

The federal government allocated $1.2 Billion in funds for cities and counties and these bonds must be issued before January 2011.

The County will seek Recovery Zone Economic Development bonds that allow States and local government to obtain lower cost borrowing cost through a new direct federal payment subsidy for 45% of the interest to finance a long range of Economic Development projects. This bond cannot be issued to private developers or businesses. IVEDC director Tim Kelley said that if the County is giving this grant the Imperial Valley could be more attractive to investors since they would promote for incentives for economic development.

Kelley said that Imperial Valley lacks of these incentives to bring new investments to the County and that is something that other entities provide to them.

In other news, the Board adopted the plans and specifications for Gateway of the Americas County Service Area Sewer Treatment Plan expansion as requested by the County Public Works director. The County approved an agreement with GSA for their east border stations facility connect their sewer system to the Gateway to the Americas sewer distribution system. In order to accommodate GSA proposed 15,000 gallon a day from east border station the plant must be upgraded to Phase II to increase sewer capacity from 31,000 to 100,000. GSA will pay $515, 757 for the cost of this project.



  • Brawley – 118 Main Street
  • Calexico – 400 Emerson Avenue, suite 4
  • El Centro – 3451 South Dogwood Road
  • El Centro Mall – 3451 S Dogwood Road
  • Yuma – 464 East 16th Street
  • Driscoll’s Sports:
    • El Centro – 1470 W State Street # 3
    • Imperial – 388 West Aten Road
    Imperial Valley Do It Centers:
    • Brawley – 415 W. Main Street
    • El Centro – 1041 N. Imperial Avenue
    • Holtville – 123 E. 5th Street
    Kennedys for Tires:
    • El Centro – 315 S 4th Street
    KGBA Radio:
    • El Centro – 605 State Street
    LaBrucherie Irrigation Supply
    • El Centro – 108 E. Ross Avenue
    Lucky Supermarket:
    • El Centro – 351 Wake Avenue
    Marriott- Fairfield Inn & Suites:
    • El Centro – 503 E. Danenberg Drive
    Packrats Mail N More:
    • Yuma – 11881 S Fortuna Road (Foothills)
    RDO Equipment:
    • Yuma – 3050 E Highway 95
    • El Centro – Street: 1470 W State St, #1
    Smart & Final:
    • El Centro – 1280 N Imperial Ave
    Torrence’s Farm Implements:
    • Brawley – 695 West Main Street
    • Heber – 190 East Hwy 86
    • Thermal – 54050 Hwy 86

    Imperial County District 5 Supervisor Wally Leimgruber has announced his intention to seek re-election.

    “The agenda of important Valley issues which need action remains full,” he said.  “My experience, research skills, and tenacity will assist in providing positive outcomes on those issues.”

    According to Leimgruber, those key issues include jobs, continued county fiscal responsibility, and keeping public lands accessible and clean.

    “The Board of Supervisors has had many positive accomplishments,” stated Leimgruber.  “I am extremely proud of the fact that despite the poor fiscal status of our state, Imperial County remains financially solid. Unlike many other areas in California, the county has had no employee layoffs or furloughs.  Also noteworthy was the board’s support of Measure D—the local transportation funding measure—and the retention of Skywest Airlines service to the Imperial County Airport.”

    As the state and nation move to cleaner, greener energy, Leimgruber believes that Imperial County—with vast solar and geothermal capabilities that can still be developed—is in a unique position to satisfy this highly anticipated demand.  “With the potential for up to 8,000 green energy jobs, I will work hard to assure that local renewable energy projects are encouraged, succeed, and thrive,” he said.  “We have the makings of a second gold rush, except this one will be a green rush with considerable economic benefits.”

    The importance to the Valley economy of off-road enthusiasts is well documented.  Leimgruber has worked hard at the state and federal levels to ensure that public lands remain open now and for future generations.  He was also instrumental in keeping trash collection at the dunes when the BLM indicated that this service would be discontinued.

    Leimgruber, a Holtville native and third-generation Imperial Valley farmer, has been a strong supporter of local agriculture, and an

    advocate for the preservation of prime farmland and with it the Valley’s rural way of life.

    He has distinguished himself on the board as being extremely well informed, a careful listener, plus a pragmatic decision maker. Leimgruber is considered a very steady performer by his fellow supervisors and county department heads alike.  He has also garnered an excellent reputation within District 5 as a consensus builder.

    With his wife Marjie, Leimgruber lives in rural Holtville.  His two children attended Holtville schools.

    Money exchanging hands over illustration of globe

    Last week, 22 business executives and employees were arrested and charged with attempting to win a contract to sell a variety of military and law enforcement products—everything from body armor and bullet-proof vests to M4 carbine rifles, tear gas grenades, and armored vehicles—by bribing overseas officials.

    It’s one of many cases under the Foreign Corrupt Practices Act of 1977 that the FBI has worked in recent years, in close cooperation with the Department of Justice. But this particular one is significant for two reasons. First, it’s the single largest investigation and prosecution in the history of the legislation. Second, it’s the first extensive use of an undercover operation in such a case.


    How sweeping was the case? Among those arrested were business owners, presidents, and CEOs from companies based in Arkansas, California, Florida, Georgia, Kentucky, Massachusetts, Pennsylvania, and Virginia—as well as in Israel and the U.K.

    Foreign Corrupt Practices Act

    The FCPA makes it unlawful to bribe foreign government officials to obtain or retain business.


    As a result of SEC investigations in the mid-1970’s, over 400 U.S. companies admitted making questionable or illegal payments in excess of $300 million to foreign government officials, politicians, and political parties.
    The abuses ran the gamut from bribery of high foreign officials to secure some type of favorable action by a foreign government to so-called facilitating payments that allegedly were made to ensure that government functionaries discharged certain ministerial or clerical duties.
    Congress enacted the FCPA to bring a halt to the bribery of foreign officials and to restore public confidence in the integrity of the American business system.

    Learn more in the Lay-Person’s Guide to the FCPA at

    More Recent FBI Cases

    Washington Field Office

    The arrests stemmed from the FBI undercover operation that focused on allegations of foreign bribery in the military and law enforcement products industry. During the operation, one of our investigators posed as a “sales agent” representing the defense minister of an African nation (that country was not actually involved, so it was unnamed in the indictment). A business associate of the subjects initially introduced them to the sales agent. The agent said he had been tasked with obtaining various defense-related articles for that nation’s presidential guard and was interested in doing business with them…for a price.

    In the indictment, the defendants allegedly agreed to pay a 20 percent commission to win a portion of a $15 million deal to outfit the presidential guard…with the understanding that 10 percent of that money would go directly to the defense minister and the other 10 percent would go to the sales agent (our agent) making the deal.

    From there, the ruse played out with all the intrigue of a spy novel. According to the indictment, the subjects in the case met with our undercover agent in luxury hotels and fancy restaurants in the nation’s capital and elsewhere. They e-mailed inflated price quotes to our agent and wired bribe money to his bank account. They drafted and mailed corrupt purchase agreements. They even sent their products for shipment to the African nation.

    And on January 18, 2010—on the eve of an industry convention in Las Vegas to which 21 of our subjects had traveled—we arrested them. The 22nd arrest was made the same day in Miami.


    The county has to notify the state treasurer’s office by Sunday if it intends to become a recovery zone.


    President Obama signed into law the “American Recovery and Reinvestment Tax Act of 2009” (the “Recovery Act”) on February 17, 2009. The Recovery Act creates a new category of bonds called Recovery Zone Bonds which are broken into two types.Recovery Economic Development Bonds and Recovery Zone Facility Bonds. Recovery Zone Bonds are intended to stimulate economic recovery in .recovery zones.. The Recovery Act provides that Recovery Zone Bonds may only be issued until December 31, 2010.

    Under the Recovery Act, the Federal government will allocate each category of Recovery Zone Bonds to the states based on each state.s decrease in employment compared to the national decrease in employment. Each state shall then allocate its allocation to counties and large municipalities (defined as having population in excess of 100,000) based on their decrease in employment compared to the state.s decrease in employment.+

    Recovery Zone – Definition

    A .recovery zone. is any area that has been designated by the county/large municipality as having significant poverty, unemployment, home foreclosure or general distress, or any area affected by military realignment, or any area that has been designated as an empowerment zone or a renewal community. States should be notified within a few weeks of their allocations for each category of Recovery Zone Bonds.

    Types of Recovery Zone


    Recovery Zone Economic Development Bonds

    The Recovery Act earmarks $10 billion of Recovery Zone Economic Development Bonds (“RZEDBs”). These are governmental bonds to be used for governmental purposes that will allow the county/large municipality to borrow on a lower cost than traditional tax-exempt financing. RZEDBs may be issued for purposes of promoting development or other economic activity, including public infrastructure and construction of public facilities or job training and educational facilities, in an area that has been designated by the county/large municipality as a .recovery zone. RZEDBs are taxable bonds (the interest earned by the holders of the bonds is subject to taxation and the rate of interest paid by the county/large municipality would presumably be higher than that on tax-exempt bonds). However, the federal government would reimburse the county/large municipality for 45% of the interest paid; thus making the true cost of the interest paid lower than that paid on tax-exempt bonds.

    Recovery Zone Facility Bonds

    The Recovery Act earmarks $15 billionof Recovery Zone Facility Bonds (“RZFBs”). RZFBs permit counties/large municipalities to provide tax-exempt financing for projects which historically would not qualify (e.g. large manufacturing plants, distribution centers, hotels, research parks, etc.). RZFBs are private activity bonds and are classified as “exempt facility bonds” for tax purposes. RZFBs may be issued for any depreciable property that (a) was acquired after the date of designation of a “recovery zone,” (b) the original use of which occurs in the recovery zone and (c) substantially all of the use of the property is in the active conduct of a “qualified business.” “Qualified business” is defined to include any trade or business except for residential rental facilities or other specifically listed “bad projects” (e.g. golf courses, massage parlors, gambling facilities, etc.). Volume Cap is not required for RZFBs, and there is no prohibition on acquiring existing property.

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