California’s largest agricultural water district misled investors who bought $77 million of municipal bonds by using accounting tricks to mask how much its finances were being squeezed by a drought gripping the state, the U.S. Securities and Exchange Commission said.
Officials with the Westlands Water District, which serves the state’s Central Valley, hid a drop in the amount of money available to cover future debt service by reclassifying reserve funds as revenue, a technique that district general manager Thomas Birmingham referred to as “a little Enron accounting,” the SEC said in a statement. As a result, Westlands misled investors when it sold bonds in 2012, the agency said.
