Breaking news from Fresnoland: City terminates Measure P contract with Fresno Arts Council; ex-employee is under investigation by police and FBI for embezzlement
Editor’s note: Fresnoland this morning is reporting a whopper of an arts story: An ex-Fresno Arts Council employee is under investigation in a $1.5 million embezzlement case, city sources say. The Munro Review is reposting the story here. We will be following up with more details as they become known.
By Omar S. Rashad, Fresnoland
The Fresno Police Department is investigating a report alleging that $1.5 million was reportedly embezzled by a now-former employee of the Fresno Arts Council, according to three high-ranking city sources.
The matter was reported to local authorities this week. On Friday, Fresno City Manager Georgeanne White sent a letter to the Fresno Arts Council, officially terminating the city’s contract with the nonprofit organization, which has been tasked with administering public Measure P grants.
Analysis from The Munro Review (updated Feb. 9): Doug Hoagland talks to the arts community and breaks down the Measure P scandal.
Fresno Arts Council Executive Director Lillia Chavez declined to comment. Chavez sent out a brief statement to local media around 10 p.m. Friday.
“The Fresno Arts Council has been the victim of unauthorized financial transactions resulting in the loss of agency funds,” the Fresno Arts Council statement said. “We have reported this to the proper authorities including the city, law enforcement, and agency partners. This is a personnel issue that is currently under investigation.”
According to city officials, who requested anonymity to discuss details about an ongoing police probe, the FBI is jointly investigating the report of embezzlement, alongside the Fresno Police Department.
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Spokespeople for the Fresno Police Department and the FBI did not immediately respond to Fresnoland’s request for comment Saturday.
It is unclear how much, or if any, of the $1.5 million under investigation consists of public money, or specifically Measure P funds. Approved at the ballot box by voters in 2018, Measure P is a three-eighths-cent local sales tax that generates funding for parks and the arts in Fresno.
Under the Expanded Access to Arts and Culture Program, 12% of Measure P revenue was set aside to be distributed to local arts organizations. In 2024, the Fresno Arts Council distributed $8.6 million in Measure P grants.
The Fresno Arts Council’s contract with the City of Fresno for administering Measure P funds will officially terminate on Feb. 20, according to White’s letter to the nonprofit organization. In the meantime, the Council is expected to return all Measure P funds to the City of Fresno, as well as all records and documents related to the Expanded Access to Arts and Culture Program.
Additionally, the Fresno Arts Council is expected to stop processing all transactions related to the program.
The very existence of an investigation into reported embezzlement at the agency in charge of administering public grants could crater public trust in the distribution of tax revenue that local arts organizations depend on.
Over the last two years, the Fresno Arts Council’s process was already fraught with confusion, frustration, criticism and controversy.
Last September, frustrations grew over the fact that the subcommittee in charge of recommending which organizations get Measure P grants — along with their amounts — would make those decisions in meetings closed to the public.
After local artists and advocates sounded the alarm on what they said should be a public process, the subcommittee opted to begin meeting in public.
Now that the Fresno Arts Council will no longer administer Measure P grants, it’s unclear who would take over that role — and whether the city’s administration could cede those powers in the aftermath of a scandal.
Fresnoland’s Julianna Morano contributed to this report.
dkzody
Heartbreaking news. What about the programs that have been funded through the Arts Council? Will those have to repay the money or will all funds be terminated if not already paid? What a quandary!
Steph
I was wondering the same. Because Measure P is unprecedented in the Valley, dealing with this boondoggle is also going to be unprecedented.
But I’ll tellya, the Feds don’t mess around. They really like their 95%-ish win rate.
Steph
A 10pm Friday press release?
Way to try and bury the story. They tried to embargo it til Monday but you can’t do that anymore in a 24hr news cycle.
Big Kudos to Fresnoland for breaking this local blockbuster.
But the city and FAC have no idea what they’re in for – they’ve stirred the Doug Hoagland investigative pot. And Doug is deep inside with his contacts regarding all things Measure P.
The worst part?
Now the City has just a month or two to start from scratch! They have to find a new FAC entity to handle the project and distribution.
What a terrible situation.
Sharon Robert
This is absolutely terrible news for those of us that are entities still awaiting our funds from the Measure P grant. We now have to rethink how we are going to replace those very much needed funds for our project.