Ethics Commission Fines Graham $32,000

See all posts re Nancy Graham.

Ethics Commission Fines Graham $32,000
Former CCDC President Nancy Graham at an Ethics Commission hearing in May
By Rob Davis
Voice of San Diego
August 12, 2010

Nancy Graham, the former Centre City Development Corp. president, was fined $32,000 Thursday by the San Diego Ethics Commission, ending a two-year saga that derailed nearly $2 billion in downtown projects, drew FBI attention and almost took down the city's downtown redevelopment agency.

Graham, who didn't attend the hearing, was penalized for failing to report some $3.5 million she received from a private business deal done in Florida before moving here in 2005. The commission found that she violated city ethics laws 18 times.

Her partners in that deal, which included the Lennar Corp., paid Graham while she was CCDC's president. But she never reported that income on her annual conflict-of-interest disclosures. Without any stated conflict, she went on to negotiate the terms of a downtown hotel proposed on land Lennar owned near Petco Park.

The issue went unnoticed until I asked her about it in spring 2008.

She told me that the private deal was long in her past, that she hadn't had any interest in the private deal for years. She said she'd sold her interests in N-K Ventures, the business she owned with her former husband.

"I have no interest in N-K or anything they do," Graham told me in 2008. "It is a bullshit argument by either sour grapes losers or other people."

That claim proved false.

In fact, it was Graham's own testimony -- this time under oath, not to me -- that unraveled her changing story. We found a sworn deposition she'd given in 2007. In it, Graham acknowledged receiving $125,000 from the Lennar deal while she was CCDC's president.

At the same time she was negotiating a deal with Lennar, the company was paying her profits from the old business deal.

That drew the Ethics Commission's attention, prompting an investigation that started in the summer of 2008 and ended Thursday night.

A three-member panel of commissioners had proposed fining Graham $25,000. But two other commissioners, John O'Neill and Bud Wetzler, argued for more. O'Neill pointed to Graham's public statements and called them disingenuous. He recalled a statement she made during a day-long ethics hearing in May when she claimed she didn't know that building a hotel near Petco Park would be profitable to its developers.

O'Neill held up a blue post-it note he'd written in his notes about that claim. It simply said: "Absurd."

"The record does show an attempt to deceive," O'Neill said.

Wetzler said Graham's actions, coming at the top levels of the organization, were "one of the most serious of all violations we could have."

"I'm convinced," he said, "that someplace along the line she shifted from accidental to intent."

A $36,000 fine was entertained and rejected; the five commissioners had to unanimously agree, and two did not.

So they deliberated quietly and settled on $32,000 -- less than the maximum $90,000 that could've been levied but more than originally proposed. The fine was unanimously approved.

Graham was fined $4,000 each on two violations: Preparing a staff report on the hotel project and discussing it at a CCDC board meeting. She was fined $1,500 apiece for 16 other violations, including sending e-mails and participating in negotiations about the project.

It's the second-largest fine in the Ethics Commission's nine-year history



The Question on Nancy Graham: Why Was She Hired in the First Place?
By Don Bauder
July 26, 2008

Nancy Graham, who recently resigned as head of Centre City Development
Corp., has left the state, supposedly to be with her ill mother. The
city attorney's office has been investigating her for a month, and now
CCDC will hold its own investigation, supposedly by an outside lawyer.
Questions abound on whether she was at all influential in a developer
named the Related Group getting the nod on a planned CCDC project at
Seventh and Market.

Before CCDC hired her, it should have asked
questions. On Nov. 23 of 2005, I reported in a Reader column that
Graham's successor as mayor of West Palm Beach, Florida, had charged
that she was too cozy with Related Group. She didn't arrive in San
Diego until the following month.

While she was mayor, her signature project was done by Related.
Then she went into the private sector
with her husband (from whom she is now divorced), and did a project
with Related. I have subsequently learned that her ex-husband is still
owed money by Related.

On April 23 of this year, I wrote a column on
the Seventh and Market project; Karen-Huff-Willis, head of the Black
Historical Society of San Diego, and activist Ian Trowbridge,
questioned whether she had been involved in Related negotiations.

Graham told me she had been in some meetings in which an agreement had
not been reached reached, but she did not negotiate the deal. The CCDC
backed up her claim. Huff-Willis this week threatened to sue CCDC. She
says that under Section 1090 of state law, public officials must be
guided by the public interest, not personal interest...