Emails show $2.4M Barstow hotel tax-break probed by FBI. Mayor calls claims 'ridiculous'

The FBI began probing allegations of corruption in Barstow at least 10 months ago, according to an email exchange between an agent and one witness dating to May 2022.

While the FBI says it can’t “confirm or deny the existence of ongoing investigations,“ several sources, including former Councilman Tim Silva, say the agency has visited Barstow City Hall at least once since December.

The emails reviewed by the Daily Press show communications between FBI special agent Steve Gale and John Garner, a former Barstow resident who recently moved to Apple Valley.

The exchange began with Gale reaching out to Garner regarding a 24-page complaint he’d filed more than eight months earlier, on Sept. 10, 2021. One specific issue piqued the agent’s interest, Garner now recalls from an interview at a Victorville FBI office: A $2.4 million subsidy the Barstow City Council locked taxpayers into giving San Diego-based Hotel Investment Group, since proven to have been sold to the public on false grounds.

After the Daily Press left a voicemail with Gale, the FBI’s Los Angeles office followed up to confirm the agent had received the inquiry as to “whether there is an ongoing investigation into the mayor’s office in Barstow.”

“We can’t confirm or deny the existence of ongoing investigations,” FBI spokesperson Laura Eimiller said on the call. “That is our policy.”

Eimiller added that, speaking generally, when the FBI arrests someone or serves a search warrant in an investigation, “that’s typically when there’s public information that does confirm it.”

‘With change, there comes turbulence’

Garner’s complaint outlines corruption allegations that have hounded first-term Barstow Mayor Paul Courtney since the 2020 election. He opened by writing about the council’s split approval of the $2.4 million tax-break for an in-the-works Marriott hotel’s first five years operating near The Outlets at Barstow.

He separately detailed allegations also lodged in lawsuits by former officials, and city-council reprimands of the mayor such as a ban from city hall and a private-investigation referral to San Bernardino County District Attorney Jason Anderson’s Public Integrity Unit.

It’s unclear how expansive the FBI’s scope has become in relation to Barstow since it followed up on Garner’s complaint or on whom it may be focusing its investigation.

The mayor, when asked about local rumors that the FBI is investigating him, told the Daily Press in a recent interview he knew of no validity to such claims.

“I’ve been hearing something about an FBI investigation, a DA investigation, a Homeland Security ―it just goes on and on and on,” Courtney said. “It’s probably been a year or so, I spoke directly to [Barstow Police Chief Andrew Espinoza], and he was not aware of any active or inactive FBI investigation etcetera, etcetera. I mean, how ridiculous.”

Courtney compared the idea to many allegations and council-ordered restrictions against him after two years in elected office, which he argues are driven by distortions or outright lies from the old guard of Barstow that he ran against on a pitch of new commercial growth in his campaign.

“Just because there’s a change now in our town,” the mayor said. “It’s about time that we have change, and with change, there comes turbulence. With change, there comes resistance. With change, there comes progress. So yes, Barstow has arrived.”

FBI interest

Garner says he filed numerous complaints against Courtney during his first year as mayor to the county DA’s Public Integrity Unit, which prosecutes political crimes, with no success eliciting responses beyond “insufficient evidence.”

He provided the Daily Press copies of those complaints as verification, along with various separate letters to county and federal representatives and major media outlets that he says also met no response.

So, in September 2021, Garner merged everything he’d given the county DA with outside sources such as a Daily Press article, Barstow Police records and social-media screenshots into one complaint, and sent it to the FBI.

Garner’s ability to fill 24 pages in the FBI complaint ties into a Facebook page called Barstow Citizens, which he ran from December 2020 – after the swearing-in of Courtney and two new councilwomen, Barbara Rose and Marilyn Dyer-Kruse – until retiring it when he moved this year. He built more than 1,200 followers on the page, including some city insiders, with sprawling posts lambasting the new regime and sleuthing any outside materials he could obtain to back his cases.

But after eight months of radio silence, Garner assumed his plea to the feds had failed.

Then came a message from Gale on May 20, 2022, identified in his email signature as an FBI special agent based in Riverside.

“I have some follow-up questions about a complaint you submitted,” Gale wrote. “Is there a day and time we can meet in person or talk by phone? I could do 5/23 or 5/24 next week in person (at your home or in our Victorville office or another location is preferred). I can make almost anytime work by phone. My phone number is below.”

Garner suggested they meet in Barstow or talk by phone. He followed a few hours later to say he’d prefer an in-person talk.

“This is important,” Garner wrote, suggesting they meet May 24 at the Black Bear Diner along Lenwood Road, part of Barstow’s consumer-spending hub for Mojave Desert truckers and travelers.

“That works for me,” Gale wrote back.

Three days later, Gale followed up to say they should “meet at a less public place,“ offering “the FBI Victorville office“ or “one of the Barstow police stations.“

Garner chose the FBI office, according to him and two people he tapped to go with him for their own local-level knowledge, both of whom personally confirmed they joined the FBI interview to the Daily Press on condition of anonymity due to personal-safety fears.

The three interviewees met Gale at an FBI office in a suite at 13911 Park Ave. in Victorville, per the address the agent emailed Garner for directions the day before their interview.

The meeting lasted nearly 45 minutes, according to Garner.

“[Gale] had another agent in the office with him, but he took voluminous notes,” Garner says. “I mean he was writing crazy. I’m surprised he didn’t record it, but I mean, he took a ton of notes. And it was all about the Marriott, about what happened with the Marriott.”

What happened with the Marriott?

That’s a reference to a pair of May 2021 votes on what remains a political hotrod two years later: A subsidy that will come in the form of HIG, the San Diego investor, keeping up to $2.4 million of so-called “transient occupancy tax” it would normally owe over its first five years operating a planned dual-branded Marriott — a ceiling it’s highly likely to hit, according to financial projections the city and HIG produced at the time. It will give a unique benefit to the Marriott on lucrative Interstate 15 real estate, as all existing hotels pay this tax to Barstow in full.

The Marriott remains in a partly-built state of construction. It’s behind schedule: Barstow’s 2021 fiscal report touted the hotel as “expected to open in July, 2022,” but the term “Marriott” appears nowhere in the city’s latest report; a banner that hung at the site last October gave a more recent target – “opening late Fall 2022,” it read – which has also expired, the banner itself no longer present almost six months later.

The city and HIG executives haven’t responded to inquiries about the project.

The tax-break passed 3-2 in a controversial second-effort pitch led by HIG chief executive Darshan Patel at a special city-council meeting called on short notice May 27, 2021. The voters who dissented were Silva, the former 16-year councilman who chose not to seek reelection in 2022, and Rose, a first-term councilwoman who has gone from ally to opponent of the mayor.

Ten days prior, the council voted 4-1 to reject what ultimately amounts to the same subsidy of $2.4 million with a different structure of city-tax refunds, Courtney being the lone dissenter to vote in favor of both HIG proposals.

Mayor Pro Tem James Noble and Councilwoman Marilyn Dyer-Kruse flipped their votes to join the mayor in HIG’s do-over pitch. Yet, Noble said in a pre-election interview last November that if he’d known what the public has since learned, “it would have probably changed my vote.”

The primary sticking point is that Patel’s pitch centered on a claim that a loan HIG needed to finance the Marriott hinged on this $2.4 million tax-break. In reality, HIG had already secured that loan weeks prior, the Daily Press previously reported.

“When they were inquiring about the Marriott,” Garner says of the FBI agents, “I felt like maybe they had uncovered information that I was not able to uncover myself. He never revealed what he knew but based on the questions asked, I had a sense that he kind of already knew the answer.”

FBI in city hall

Rumors of an FBI investigation tied to Courtney have floated among in-the-know people who have opposed him for months. Silva, speaking openly after his council retirement, said in a late-February interview he knew of three city staffers whom the agency had interviewed.

“It’s a fact that they’ve been to city hall,” Silva said, adding he thinks an explanation is owed. “When the FBI is in your city hall, the citizens have a right to know why.”

City leaders publicly discussed the idea of a looming indictment against Courtney while avoiding specifics when debating a no-confidence vote against the mayor last December. They specifically opted against the formal reprimand to avoid potential interference in a future criminal case.

“If this moves forward [to a no-confidence vote], and it’s deemed that he doesn’t get a fair trial if there are criminal charges, I would rather him be nailed for the criminal charges,” Rose said from the council dais at the Dec. 19 meeting.

Charlie McGee covers California’s High Desert for the Daily Press, focusing on the city of Barstow and its surrounding communities. He is also a Report for America corps member with The GroundTruth Project, an independent, nonpartisan, nonprofit news organization dedicated to supporting the next generation of journalists in the U.S. and around the world. McGee may be reached at 760-955-5341 or cmcgee@gannett.com. Follow him on Twitter @bycharliemcgee.

This article originally appeared on Victorville Daily Press: Emails: FBI probe of Barstow, $2.4M tax-break at least 10 months old