SEDC refuses public records requests

SEDC Won't Produce Documents
August 29, 2008
Voice of San Diego
by Will Carless

The Southeastern Economic Development Corp. has, for almost two months, refused to provide documents and information that would shed light on when and how its various clandestine bonus programs were introduced.

SEDC President Carolyn Y. Smith has consistently claimed that the bonus programs pre-date her arrival at SEDC, and that she was merely following agency protocol when she approved hundreds of thousands of dollars in bonuses for herself and her staff.

But the agency has repeatedly declined to provide any documentation that would prove such claims. And a story in The San Diego Union-Tribune earlier this month quoted Smith’s three predecessors at the agency as saying that they do not remember any such bonus programs being in place during their tenure...

Is the CCDC a charitable organization for San Diego developers?

By Ian Trowbridge, Mission Hills
Voice of San Diego
August 29, 2008

On Tuesday, the mayor will ask the City Council to confirm his reappointments of three CCDC Board members, Fred Maas, Kim Kilkenny and Robert McNeely whose terms have expired even as several investigations of CCDC are underway and it is important to know whether any of these board members are implicated in the growing scandal at CCDC. With the collusion of Council President Scott Peters, these reappointments have been placed on the consent calendar.

..Maas is a Republican political operative turned developer and a confidante of Nancy Graham -- meeting with her according to her calendar for the whole of Wednesday mornings for weeks.

As befits a political operative, he currently has the role of distancing the CCDC Board from Graham even though they appointed her, gave her a $65,000 bonus for unknown services, and allowed her to run CCDC as if it were a charitable organization for downtown developers.

Maas refuses to release documents detailing the goals set for Graham and how she achieved them to warrant the $65,000 bonus even though the board violated the Ralph M. Brown Act (Government Code Section 54957) in conducting and voting on her compensation in closed session. Kilkenny is an executive of a major developer of Otay Ranch who seems to have little concept that he is supposed to protect the public interest. McNeely was on the selection committee that chose Nancy Graham...

CCDC Attorney Resigns

CCDC Attorney Resigns
Voice of San Diego
By Rob Davis
Aug. 29, 2008

Helen Holmes Peak, the corporate counsel for the Centre City Development Corp., has resigned, citing concerns about a potential conflict of interest.

Peak, who is a partner with Lounsbery Ferguson Altona & Peak LLP, an Escondido law firm, participated in discussions about the proposed Ballpark Village from 2005 to 2007, while one of her partners represented Lennar Corp., one of the project's developers.

She did not disclose the relationship on her statements of economic interest until 2007. Even when she did report it, she did not recuse herself from meetings and discussions about Ballpark Village, a massive mixed-use project proposed by JMI Realty and Lennar.

Peak disclosed receiving more than $10,000 from Lennar in 2007, according to her annual conflict-of-interest disclosure forms. But she didn't subsequently recuse herself from discussions about Ballpark Village, saying that she didn't know Lennar was involved.

Lennar is essentially a silent partner in the project; it is part owner of the underlying land but is not listed documentation submitted about the project...

Courts shouldn't have to depend on the memories and truthfulness of board members--Brown Act requires closed sessions be recorded

It appears to me that many, if not most, unlawful strategies are decided by public entities during closed sessions in board meetings.

Good for Briggs and Trowbridge, who are working to bring those discussions to light.

Lawyer to SEDC: Record Meeting

Cory Briggs, a local attorney who filed a lawsuit last week against the Southeastern Economic Development Corp., has written a letter to the agency's corporate counsel, Regina Petty, asking her to ensure that the closed session of SEDC's board meeting tomorrow is recorded.

Briggs' letter says his client, activist Ian Trowbridge, wants the meeting recorded because the closed session discussion could become evidence in his lawsuit against the agency. That lawsuit alleges that SEDC's board violated state open meetings law, known as the Brown Act, when it voted in closed session last month to pay outgoing SEDC President Carolyn Y. Smith a $100,350 severance payment.

The Brown Act forbids the board from discussing a termination payment in private... the open session discussion is preceded by a closed session item that's listed on the meeting agenda as "Public Employee PerformanceEvaluation/ Discipline/ Dismissal/ Release."

Briggs' letter reads:

"The need for a neutral, objective record of tomorrow’s closed-session discussions should be obvious at this point. The discussions are likely to be evidence in the above-referenced matter and may become evidence in other proceedings. The best protection for my client, your client, and especially the public is for there to be a clear record of what is discussed -- one that doesn’t rely on the memories or truthfulness of persons accused of breaking the law -- in the event that the discussions become relevant at a later date...

"[N]ot preserving a contemporaneous record of the discussions could constitute the spoliation of evidence and subject your client (and possibly even you) to sanctions."...

by WILL CARLESS
August 26, 2008

Shocking! Nancy Graham lied to the press!

Voice of San Diego reports: "When she resigned July 24, [CCDC'S Nancy]Graham said she was in Tennessee, caring for her elderly mother..."

The Palm Beach Post reports:

"Her 83-year-old mom, Virginia Roskan, has Parkinson's. But when Page Two called Roskan's home Thursday, Graham's sister said she had no idea where Graham was.

"'She's not here right now, and I have no idea where Nancy is,' Kay Smith said from Lebanon, Tenn. 'She's been traveling a lot. I haven't seen her in a while...'"

Half the SEDC board supports Artie

These people won't quit! It seems they have no shame. It appears that Charles Simpson, Sharon Whitehurst-Payne, Randy Jones and Kea Hagan really believe that it's okay to use tax dollars for insiders, and leave the public good out of the equation. Even after large secret bonuses and the chairman's profits from a deal with SEDC have been exposed, they want to continue business as usual.

SEDC keeps Owen as chairman
By Helen Gao
UNION-TRIBUNE STAFF WRITER
August 13, 2008

"Southeastern Economic Development Corp. Chairman Artie “Chip” Owen survived an attempt on his leadership position Wednesday night, as a board vote to oust him failed.

"The board voted 5-4 to keep Owen in place. His land deals and connections to a developer with SEDC business have come under fire.

“I feel we need to be a little more proactive than we have been,” said board member Richard Geisler, who made a motion to remove Owen.
"
The quasi-independent nonprofit city agency guides redevelopment on 7.2 square miles east of downtown, and has been under fire for budget and pay anomalies. The board fired president Carolyn Smith last month, with 90 days' notice.

"Geisler was supported by board members Cruz Gonzalez, Karen L. Howard and Derryl Williams. They were outnumbered by votes from Owen, Charles Simpson, Sharon Whitehurst-Payne, Randy Jones and Kea Hagan..."



After the above vote, mayor Jerry Sanders appointed new members to fill the seats of all but one of the board members who voted to keep Owen (including Owen himself). Unfortunately, Sharon Whitehurst-Payne remains on the SEDC board.

Who is Chula Vista's city attorney?

Who exactly is the city attorney that Cheryl Cox wants the City Manager to coordinate with? It's not Ann Y. Moore, even though Moore is still listed on the city's website.


The National Law Journal wrote on June 2, 2008:

"Chula Vista City Attorney Ann Y. Moore is retiring on Thursday and will join San Diego's Norton Moore as a senior partner, the San Diego Union-Tribune reported. Moore began as an assistant city attorney in 1995 and was appointed city attorney in 2003. The move comes before a ballot initiative that would make the city attorney elected, rather than appointed, if passed. The city council hasn't named a replacement for Moore, the Union-Tribune reported."

What's going on, Mayor Cox? Who prepared that letter for Mr. Garcia? Why the secrecy?

Chula Vista Mayor Cheryl Cox had problems in her earlier job

Recently two employees reported that Chula Vista City Manager David Garcia was looking at inappropriate images on his laptop, and Mayor Cheryl Cox hired an investigator to look into the report. On May 28 she wrote a memo saying the City Council disapproved of Garcia's Internet conduct.

This is a far cry from Cox's behavior as a board member of Chula Vista Elementary School District.

In 2001, two employees at CVESD reported that they feared that a fellow teacher would kill them. This sounds a little more serious that downloading images on a laptop, doesn't it?

Cheryl Cox and her fellow board members never investigated.

Why not? Partly because she knew the report was false. But more importantly, she knew that the two teachers from Castle Park Elementary made the report to coverup criminal wrongdoing by the teachers.

Cheryl also wanted to coverup that wrongdoing. Castle Park Elementary has been a mess ever since, going through 11 principals in 11 years.

It looks like Cheryl wants to make a mess out of Chula Vista, too. Can we look forward to 11 city managers in 11 years, Cheryl?

FEMA and Sanders got together after the fires, now taxpayers pay inflated bills

Jeanne Fowler couldn't could not figure out why A.J. Diani Construction Co. removed so much cement from her property. Her property had a lot of concrete, she said, but her driveway and pathways were not destroyed. Now she knows: the contractors were paid by the pound.

Diani removed 305 tons of concrete, 372 tons of ash and trash, and 11 tons of metal from the remains of Fowler's home, according to invoices. The company charged $164,789; her insurance company agreed to pay $57,779.

Who pays the difference? Taxpayers.

Watsonville-based Granite Construction Company also participated in the clean-up.

Complaints over debris cleanup tab unanswered
By Dana Wilkie
U-T WASHINGTON BUREAU
August 10, 2008

"Mayor Jerry Sanders... was told in the spring that homeowners were outraged by the program's high costs...At the same time, Sanders' spokesman acknowledged, the mayor heard from homeowners who were getting “fairly elevated invoices.”

"Spokesman Fred Sainz said the mayor “immediately inquired” about the high bills, and though he wasn't wholly satisfied with the explanations from city staff members, Sanders “took their answers at face value.”

"Sanders has been unwilling to comment on the debris-removal program before or since The San Diego Union-Tribune reported Aug. 3 that city-hired contractors charged much more than private contractors to clear similar home sites and often hauled away far more debris than what private companies took from comparable lots.

"The city assured homeowners that they would be charged no more than their insurance allowed for demolition, which means most of the costs of the $9.4 million program will be borne by federal, state and local taxpayers..."

Mike Aguirre continues to win against firms involved in pension mess

Voice of San Diego
by DAVID WASHBURN
July 29, 2008

San Diego City Attorney Michael Aguirre has settled another of his lawsuits against firms retained by the city before and during the pension meltdown.

Orrick, Herrington & Sutcliffe, the city's former bond counsel, has agreed to pay $2.88 million to settle a case filed by Aguirre in 2005, which alleged that the San Francisco-based firm failed the city by not discovering problems with the pension fund sooner.

The city will net $1.88 million from the settlement after paying expenses and a contingency fee to outside lawyers Bryan Vess and Dan Stanford, who assisted in the case, Aguirre said...

To date, Aguirre said he has recovered a net of more than $9 million from outside lawyers, accountants and consultants somehow involved in the pension crisis.

SEDC board member Chip Owen bilked taxpayers

Owen got $500,000 before joining board
By Jeff McDonald and Helen Gao
San Diego Union Tribune
July 22, 2008

"Three years before he joined the board of the Southeastern Economic Development Corp., Artie “Chip” Owen and a company he managed bought 4.4 acres that they instantly sold to the government agency for a $500,000 profit, records show.

"Caravan Properties LLC bought the property on Market Street near 54th Street in San Diego from Federated Industries Inc. of Chicago for $1.8 million on May 1, 2000.
The transaction was time-stamped 10:59 a.m., the same minute Caravan filed a quitclaim deed transferring ownership to the company and Owen. The subsequent sale from Caravan and Owen to SEDC for $2.3 million also was time-stamped 10:59 a.m.

The transaction was first reported by San Diego blogger and real estate broker Pat Flannery.

Records obtained by The San Diego Union-Tribune show SEDC entered into a purchase and sale agreement with Caravan Properties in April 2000 – before Caravan bought the land from Federated Industries.

Critics questioned the sale. Owen “knew the land and bought it,” said Kathleen MacLeod, who volunteers for a number of community groups. “Why didn't SEDC buy it for $500,000 less?”

Owen... was appointed to the board in February 2003 by then-Mayor Dick Murphy. He currently is the chairman.

The Market Street deal was not his first with the SEDC...

Dealings of former president Nancy Graham of CCDC to be examined

See all posts re Nancy Graham.

CCDC Chairman Fred Maas wants to conduct an investigation into the business connections of former CCDC president Nancy Graham (left), who resigned on July 24, 2008.

ROB DAVIS of Voice of San Diego wrote on July 25, 2008:

"Fred Maas, the chairman of the Centre City Development Corp.'s board of directors, said today he will seek a "fact-finding mission" to examine the circumstances surrounding former CCDC President Nancy Graham's involvement in the development project at 7th Avenue and Market Street downtown...

"Graham, who resigned Thursday, had previously been a business partner with a sister company of the 7th and Market developer, Related of California. The company, along with CityLink Investment Corp., is leading efforts to build the 41-story, $409-million downtown skyscraper. Under the current terms of the deal, which has not been finalized, the city of San Diego via CCDC will give the developers an $8.7 million subsidy to construct affordable housing in the building...

"Graham's resignation comes eight months after signing a three-year contract with CCDC. She does not get a severance and walks away from more than $496,000 in salary, as the contract set her annual pay at $248,000."

Carolyn Smith of SEDC out

By WILL CARLESS
Voice of San Diego
July 24, 2008

...Carolyn Y. Smith, the embattled president of the Southeastern Economic Development Corp., was forced out of the office she has held for more than 14 years by a unanimous decision of her board Wednesday night.

In a nearly six-hour board meeting that drew dozens of community members and many supporters of Smith, the SEDC trustees ultimately decided to grant Smith a severance package of $100,350 and to bring an end to a tenure that, while supported by some in the community, has been marred by scandal of late.

Smith has been at the center of a maelstrom of publicity since a voiceofsandiego.org story two weeks ago revealed a system of hidden bonuses and extra compensation under which she has paid herself and her staff more than $1 million over the last five years...

Chip Owen and welfare for the rich

By ANDREW DONOHUE
Voice of San Diego
July 24, 2008

Months after Artie M. "Chip" Owen, now the chairman of the Southeastern Economic Development Corp., earned $500,000 by flipping a piece of property to the agency, he signed over $400,000 of that money to another developer doing business with the agency.

Owen, who joined SEDC's board three years after the land transaction, was listed in public documents and discussion as the sole businessman involved in the land sale and as the manager of the corporation that exacted it, Caravan Properties LLC.

However, shortly after the deal finalized, the lion's share of the earnings shifted to Santa Monica-based Pacific Development Partners LLC, according to documents on file with the County Registrar's Office and SEDC...

San Diego demonstrates how to win an award for excellence in accounting

David Washburn of Voice of San Diego find that Enron by the Sea made the New York Times again, in an article about "skim funds."

"New Jersey and San Diego had versions of skim funds, and won "excellence in accounting" awards from the Government Finance Officers Association for many years while operating them. Each ended up with far less money in its pension fund than its books showed. The Securities and Exchange Commission found that San Diego had committed securities fraud by overstating the soundness of its pension fund; it is still investigating New Jersey."

SD City unions prefer secret pension deals; Mike Aguirre opposes them

San Diego City Attorney Mike Aguirre

Metropolitan Employees Association duo Ann Smith-Judie Italiano continue their odd alliances with Republican judges. The alliance began with the billion-dollar pension deal supported by the MEA bosses and former San Diego mayor Dick Murphy. And it continues with Judie/Ann's newly-forged alliance with Jan Goldsmith.

The bizarre alliance is apparently built on the expectation that San Diegans will continue to sacrifice their own well-being and that of their city, and will go back to using the City Attorney's office to cover-up wrongdoing in city government, in order to keep Judie/Ann in power.

And it involves a major flip-flop on the party of candidate Goldsmith. Scott Lewis explains:


The Union Pawns
By Scott Lewis
July 9, 2008

Voice of San Diego

It was rather amusing to see Judge Jan Goldsmith tout his endorsement from the San Diego Municipal Employees Association...

The best radio ad of the campaign season was Mr. Goldsmith's very own takedown of his rivals. Remember, he used a circus theme to paint City Hall as a mess...

[Quote from Jan Goldsmith's radio ad:]
In ring two, see Scott "the wonder pony" Peters jump through hoops, straddle fences and juggle important city issues all to please his labor union handlers.

Now that Goldsmith is the preferred choice of the firefighters union, the police union, and the white-collar City Hall workers, is it no longer so bad to be associated with unions?

How come people cheat and at the same time claim the moral high ground?

Newsweek's Sharon Begley explains:
"...In a new study that will not exactly restore your faith in human nature, psychologists David DeSteno and Piercarlo Valdesolo of Northeastern University instructed 94 people to assign themselves and a stranger one of two tasks: an easy one, looking for hidden images in a photo, or a hard one, solving math and logic problems...Then everyone was asked, how fairly did you act?, from "extremely unfairly" (1) to "extremely fairly" (7). Next they watched someone else make the assignments, and judged that person's ethics. Selflessness was a virtual no-show: 87 out of 94 people opted for the easy task and gave the next guy the onerous one. Hypocrisy, however, showed up with bells on: every single person who made the selfish choice judged his own behavior more leniently—on average, 4.5 vs. 3.1—than that of someone else who grabbed the easy task for himself...

"...DeSteno said, it may be because "we have this automatic, gut-level instinct to preserve our self-image. In our heart, maybe we're just not as sensitive to our own transgressions." Adds Dan Batson of the University of Kansas, a pioneer in hypocrisy studies, "people have learned that it pays to seem moral, since it lets you avoid censure and guilt. But even better is appearing moral without having to pay the cost of actually being moral"—such as assigning yourself the tough job....

""Since it's a cognitive process, we have volitional control over it," argues DeSteno. That matters because of another nasty aspect of hypocrisy: we apply the same moral relativism when judging the actions of people like ourselves. When "people like us" torture, it's justified; when people unlike us do, it's an atrocity..."

Public Entities fleecing taxpayers to avoid responsibility for wrongdoing

From Voice of San Diego
Letters
All Those Legal Bills
By Tom Adler, San Diego
Tuesday, June 24, 2008

I was delighted to read that the city council has finally come to their senses and has begun to balk about paying for outside consultants.

It does seem a bit ironic however.

During their pension dustup the council members couldn't get enough of them. Council member Jim Madaffer, for instance, had no trouble at all in March 2006 requesting that the taxpayers of this city pay his personal attorney a sum of $327,231. These attorney fees were supposedly incurred to enable Mr. Madaffer to get advice from an attorney as to whether he had violated any laws in regard to the pension debacle. In more than 30 years as a lawyer, I never knew anyone who paid this amount to get advice from an attorney as to whether they had broken the law. He wasn't the only city councilperson to request these outrageous fees. Councilman Brian Maienschein requested $345,000. Councilwoman Toni Atkins requested $365,696.

The other councilpersons were close behind with their requests with the exception of Councilwoman Donna Frye, who not only refused to take taxpayer money but also paid her own attorney fees which amounted to $5,000.

I wonder if a private citizen could have paid these fees, which to this date have been unaccounted for due to the refusal of the city council and mayor to release the records necessary for a full accounting. In any event, the council approved these fees and also fees for the representation of any other city employee who was to be interviewed or deposed. It didn't matter whether or not any of them had been sued or even suspected of wrongdoing. They all received counsel from private attorneys at the taxpayers' expense. At last count, the fees paid for these counseling attorneys was in excess of $3 million.

Maybe if the city had competent council members and skilled employees there would be less need for this continual army of experts who troop through City Hall with their main strength being how to bill.

Judie Italiano announces that she's MEA's executive-for-life

The San Diego Union Tribune quotes Metropolitan Employees Association general manager Judie Italiano as saying:

"MEA is never, ever, as long as I can draw a breath, endorsing Mike Aguirre."

Well, that's pretty clear. But MEA's lawyer Ann Smith has made it clear that she and former president Judie Italiano are a package deal. Ann Smith "threatened" to resign if Judie were not named general manager.

Judie and Ann are perfect duplicates of California Teachers Association's controlling couple, Carolyn Doggett and Beverly Tucker, the CTA executive director and her lawyer, who also seem to be a package deal.

Well, San Diego, it seems we're in for a long ride with JudieAnn Italismith. We'll have their billion-dollar budget-busting noses in faces, making demands for some time.

Aguirre has recovered $10 million, more than he's spent in pension lawsuits

Mike Aguirre's campaign for reelection just got a big shot in the arm. His accusers must now admit that his aggressive pursuit of those who defrauded San Diego in the pension scam and related investigations has paid off for the city.

$4.35 million settlement in pension lawsuit
Law firm represented city before the SEC

By Craig Gustafson
San Diego Union Tribune
June 14, 2008

Vinson & Elkins, the Houston-based law firm whose two-year investigation into San Diego's finances was criticized as a whitewash, has agreed to settle with the city for $4.35 million.

The firm would be the fourth to settle lawsuits related to financial and legal troubles from the city practice of increasing employee pension benefits while cutting funding for them.

Settlements
Pension-related settlements:

July 2006: Two auditing firms, Caporicci & Larson and Calderon, Jaham & Osborn, paid $1.65 million total to the city. Calderon conducted the city's annual financial audits, which were later found to contain million of dollars in errors. Caporicci, of Costa Mesa, later bought the firm and denied any wrongdoing by itself or Calderon.

November 2006: San Francisco-based Callan Associates, a pension consultant that advised San Diego's retirement system, agreed to pay $4.5 million to the city. City Attorney Michael Aguirre accused them of faulty investment advice. The firm admitted to no wrongdoing.


City Attorney Michael Aguirre classified the settlement as a victory for his pension-related lawsuits, even though he had sought $10 million.

Vinson & Elkins, which also represented Enron, admitted no wrongdoing but agreed to pay back $3.25 million to the city and forgive $1.1 million in outstanding bills, Aguirre said. The City Council will vote Tuesday on the settlement...