The Fresno Police Department and Federal Bureau of Investigation are investigating the reported embezzlement of $1.5 million in Measure P funds from the Fresno Arts Council by a former employee.

Lt. Larry Bowlan, Fresno Police spokesman, said Monday that the department learned Friday about the embezzlement and launched the probe. The FBI is involved because Measure P revenues are raised through a 3/8ths of a cent sales tax in Fresno, he said.

City councilmembers were notified Friday in an email from city manager Georgeanne White of the theft of funds and that the city had sent a 14-day notice to the arts council to end its Measure P arts funds administrative contract, Councilmember Annalisa Perea said Monday.

The Fresno City Council has scheduled a special meeting for 10:15 a.m. Tuesday. Although the online agenda is not specific as to the potential litigation that will be discussed in closed session, Perea said council members will be discussing the theft.

She acknowledged that the investigation is in its early days but said the council will want to know how such a substantial amount of money could be misappropriated and over what time period.

Arts Council Alerted City, Police

Lilia Gonzalez Chavez, the arts council’s executive director, confirmed the theft in a news release late Friday. According to the release, the arts council was the “victim of unauthorized financial transactions resulting in the loss of agency funds,” and the theft had been reported to the city, law enforcement, and agency partners. Chavez termed it a “personnel issue that is currently under investigation.”

Measure P, which voters passed in 2018, designates sales tax revenues for arts and parks in the city. According to the 2023-24 fiscal year audit, overall Measure P revenues topped $45 million.

There was a tug of war in 2023 between the arts council and the city Parks, After School, Recreation and Community Service Department over the creation of a Cultural Arts Plan. Under Measure P, the Fresno Arts Council was designated to oversee the granting of arts funds to local organizations and has conducted numerous rounds of grant applications and awards.

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Last September the agency came under fire from arts agencies that claimed there was a lack of transparency in how and to which arts organizations Measure P funds were being allocated.

Omequetzal Lopez, who was among those criticizing the arts council last September, posted on Facebook a notice of an “emergency meeting” at 5:30 p.m. Monday at 1445 N. Van Ness Ave. “Dulce Upfront, alongside our community of artists and arts organizations, continues to demand transparency and equity in the distribution of arts-based city funding,” Lopez posted on Facebook. Lopez did not respond to a social media message seeking further comment Monday.

Arts Council ‘Lost the Trust’

Perea said she is hearing from arts organizations their disappointment over the embezzlement of tax revenues that were supposed to go to the arts.

“People are, I think, more so frustrated than anything else because the one organization that we all entrusted to oversee this program lost the trust of the entire community overnight,” she said. “I think the outcome of this investigation will be very telling in terms of what did this employee know and when and how long has this been happening. There are a lot of unanswered questions at this point.”

One big decision the council and city will need to make is who will take on the role that the arts council has had with regard to oversight of Measure P arts funding.

In the past, the community had made it clear that it did not want the city deciding how the arts grants would be awarded and to whom, Perea said.

“We definitely need to pivot at this point and find another organization who can take on this heavy lift,” she said.