A recent state audit report that made allegations of illegal campaign contributions and corruption has been revised after it was revealed its conclusions were based solely on unsubstantiated rumors.

A new report by the Fiscal Crisis and Management Assistant Team (FCMAT), released Monday, June 8, now makes clear that the audit found no evidence to support the allegations related to campaign contributions.

The FCMAT audit conducted at the request of the San Diego County Office of Education was supposed to review recent fiscal irregularities at San Ysidro School District.

Instead, the report released on May 9th focused primarily on a solar energy project built at San Ysidro under a contract with a local energy company.

The report relied exclusively on unsubstantiated rumors to allege that the President of the energy company, Art Castañares, made illegal campaign contributions to school board members in exchange for support for the solar project. Castañares is also the Publisher of La Prensa San Diego.

None of the allegations were made under sworn statements or penalty of perjury, and none of the individuals provided any evidence to support their claims.

“FCMAT found no corroborating evidence that supports the allegations against Mr. Castanares, the board members or the [teachers’] association,” the new report states. “FCMAT does not accuse any vendor, individuals associated with vendors, SYEA or the board members of any wrongdoing with regard to any alleged contributions.”

The revised report clarified that the allegations were based solely on third-hand rumors from individuals and admitted that no evidence was found to corroborate the claims.

“This so-called audit took baseless rumors and used them to allege things that never happened,” Castañares said on Monday after the revised audit was released. “I contacted FCMAT eight weeks ago when their audit was released and challenged them to provide evidence, which, of course, doesn’t exist,” Castañares added.

Although FCMAT had no evidence to support the allegations, its May 9 report stated that “sufficient evidence to demonstrate that fraud, misappropriation of funds and/or assets, or other illegal fiscal activities may have occurred.”

The new audit released this week still contains the allegations about campaign contributions, but adds that Castañares, the board member, and the teachers union officials deny the claims.

Castañares wrote several emails to FCMAT starting on May 12 to express his concerns that the report made false and damaging allegations, and that he was not interviewed for the first report.

FCMAT staff finally interviewed Castañares one month later.

“FCMAT didn’t even interview me until a month after the first report was issued so they made no effort to corroborate the claims before they printed them” Castañares added. “When I was finally interviewed, I asked to review the statements made against me, but FCMAT staff said they destroyed their notes of those interviews,” he added.

Castañares contacted San Diego County Schools Superintendent Dr. Paul Gothold on May 15 to raise concerns about the report, and requested to meet. Gothold instead referred to request to Adrienne Konigar-Macklin, the outside lawyer for the SDCOE.

“I asked the San Diego County Office of Education (SDCOE) to investigate how these baseless rumors made it into the audit in the first place, but no one will name the individuals that lied,” Castañares added. “The report was requested by the County and presented to San Ysidro by Paul Gothold, so I put them on notice that it made baseless and false claims,” he added.

After more than six weeks had passed since the issuance of the report, Castañares attended a meeting of FCMAT’s Board of Directors, which was held in Squaw Valley near Lake Tahoe, to express his concerns with the allegations made in the report. Castañares spoke to the Board during its public comment period.

After the meeting, Castañares met with FCMAT’s CEO Michael Fine, as well as with Gothold, who serves on FCMAT’s Board of Directors.

The following week, FCMAT submitted the revised report to SDCOE for its review. SDCOE, under Gothold’s leadership, reviewed the report before its final release this week.

SDCOE’s lawyer confirmed that the County gave comments back to FCMAT before the release of the report this week, but the input was provided by telephone so no record exists of those comments.

“FCMAT should have removed the baseless statements from this final report because they are nothing more than rumors and lies,” Castañares said after reading the new report. “My concern is that FCMAT was careless by including them in the report in the first place, and now reiterating them in the revision, and that has caused irreparable damage to me and others,” Castañares added.

Castañares and the two San Ysidro Board members that the FCMAT report wrongly accused of bribery are weighing their options, including filing lawsuits against FCMAT, SDCOE, and San Ysidro School District for damages stemming from the false claims in the report.

“It’s unfortunate that a few individuals caused such a big problem by lying to state auditors,” Castañares added. “If the District Attorney doesn’t prosecute them for wasting taxpayer money on false investigations then I may sue them all for defamation and damages they caused me, and let them sort who is really behind the lies,” he concluded.

Gothold has 45 days to present the report to the San Diego County Board of Education, which then has 15 days to decide on what action, if any, to take on the report.