Westlands is the nation's largest public irrigation agency, selling water to agricultural operations in a district that covers nearly 1,000 square miles in Fresno and Kings counties. The district came under federal scrutiny in March, when regulators levied a $125,000 penalty against it over bookkeeping that Westlands General Manager Tom Birmingham had described as "a little Enron accounting."
The Securities and Exchange Commission had concluded Westlands misled bond investors about its financial condition.
A heavyweight in California water politics, Westlands currently is negotiating two multibillion-dollar deals with local, state and federal agencies that would reshape water distribution in California, the country's agriculture leader.
Peltier described the loan from Westland's reserve funds as a good deal for the water agency and for him.
"It was what was attractive to me, and I guess it worked for them relative to where their reserves were," said Peltier. He has since bought an additional house at the Monterey County golf resort of Pebble Beach while his loan to Westlands for his home, on the Sacramento River near the town of Walnut Grove, has remained unpaid.
Governance experts say public agencies sometimes provide home loans to help recruit executives, but say Peltier's appears unusual because it was extended for years at a fraction of the interest rates of commercial mortgages, the district's various actions on the loan were not disclosed publicly although Peltier is a public official, and the loan will continue for years after he stopped working at Westlands.
"Each of the individual features is a bit unusual. Taken together these features are very unusual," Fred Whittlesey, a consultant on employee compensation based in Washington state, said of the loan.
"Free money is usually a great deal," Whittlesey said. "But it may not be appropriate in an employment arrangement."
The story on the loan is this, according to Peltier and records from Westlands and the U.S. Interior Department, where he worked before Westlands:
In March 2007, Peltier, whose Interior job included overseeing California water issues, notified the department he was looking for a job elsewhere. Two months later, he signed a $1.4 million purchase agreement for his home with a new "state of the art" $115,000 boat dock and a $100,000 swimming pool.
Peltier said he had already signed the paperwork before getting the Westlands job offer. Westlands hired Peltier June 25, 2007, as chief deputy general manager, and a short time later loaned him the full $1.4 million home price, agency records show.
Terms initially required Peltier to repay the money within a year, when he sold his old house in a Virginia suburb of Washington, D.C. But Peltier said the home didn't move after the 2007 housing crash, and records show he signed repeated one-year loan extensions.
In 2012, he and Westlands revamped their agreement, giving him until 2021 to pay off the loan, with a final payment of more than $1 million, according to district records. Peltier made monthly payments of about $5,000 from January 2013 to February 2015.
Peltier, whose salary was about $200,000 according to state records, finally sold the house back East in February 2014, and left Westlands for a job at an affiliated water agency in summer 2015, with the Westlands loan still unpaid.
Current Westlands Deputy General Manager Johnny Amaral defended the transaction.
"Unfortunately, Mr. Peltier, like millions of other Americans, was unable to sell his property in Virginia because of the collapse of the housing market, and the bridge loan was converted to a long-term loan," Amaral said in an email.
Westlands officials declined interviews.
The Associated Press had asked Westlands under open records laws to provide all documents on the loan, including any showing whether the district disclosed the deal publicly.
In response to written questions, Chief Operating Officer Dan Pope said the home loan was allowed under a district rule that gives officials the authority to set salaries. There was no public record of the district board's loan decision, Pope wrote, because it was made in a closed session.
The AP could find public mention of the loan only on the website of a federal agency that oversees municipal bonds. Posted there were Westlands' annual audits, which from 2010 on reported a $1.4 million loan to an unidentified management-level employee.
Peter Scheer, head of the California-based nonprofit First Amendment Coalition, said Westlands as a public agency should have disclosed all of its actions on Peltier's loan, noting that the public has a right to know those details. Scheer's group has been supported by donations from some news organizations, including the AP.
California law requires public officials like Peltier to file annual financial disclosure forms, which includes reporting some loans.
Peltier said he had begun reporting the loan in his most recent annual disclosures. However, his reports through 2015, obtained from the state, make no mention of an outstanding loan from Westlands.
Asked about the apparent discrepancy, Peltier said he thought he had included the information.
