This will be my main blogging page. After a period of time, I will move older blog entries to The Archive page. The SEDC Lame Ducks: Defiant Quacks! August 27, 2008. What is it about accountability to, and respect for taxpayers, that the board of directors at SEDC just doesn’t get? Mayor Jerry Sanders; the mayor’s Chief Operating Officer, Jay Goldstone; San Diego City Council members Tony Young and Jim Madaffer; City Attorney Mike Aguirre; and at least one attorney, who is suing the SEDC board for its misconduct, have all cautioned the board, in no uncertain terms, not to undertake any more binding business matters until four of the board members have been replaced! Yet the SEDC board went ahead and scheduled a meeting on Tuesday to discuss the renewal and letting of contracts valued in the millions of dollars. Voice of San Diego.org. The SEDC board also shows a sophomoric defiance by again scheduling a closed-door meeting today to discuss the terms for the departure and compensation of its president, Carolyn Smith. An earlier closed-door meeting, at which the board agreed to fire Ms. Smith, also resulted in a severance package that included a financial payment of over $100,000, a ninety day window to leave her job, and indemnification from lawsuits related to Ms. Smith’s misconduct. However, Obviously, these “runaway train” actions by the SEDC board are not sitting well at all with too many folks at City Hall. Separately, Jay Goldstone, Council member Madaffer and City Attorney Aguirre have sternly warned the SEDC board that first, any actions or decisions taken or made by the intransigent board members may end up being declared null and void and not honored by the City, and second, board members could face individual prosecution or sanctions for their unlawful actions. (All links, Voice of San Diego.org.) It’s about time someone read these SEDC board members the “riot act” and unequivocally demanded that they stop their continued misbehavior. So much of the board members’ defiance seems almost surreal in its brazenness. We now know that the weirdly-departed captain of CCDC, Nancy Graham, was even worse than her counterpart at SEDC, in that Graham brought her troubles with her from out-of-state. A nearly identical pattern of conflict of interest dogged Graham in After all of the sordid details of the malfeasance at SEDC, I called for the abolishment of that agency. I decried the lack of accountability that these quasi-independent, non-profit development “corporations” engender. I questioned the additional and unnecessary layer of bureaucracy that these agencies bring with their creation. Well, you know what, folks? We already have a Redevelopment Agency at the city, and it’s called the San Diego City Council. Since I recently called for the dissolution of these “development corporations”, not one single citizen or taxpayer that I have heard has stepped forward to oppose me. Not one! Mayor Sanders, I sincerely appreciate the overall job you are doing, trying to clean up the horrible mess you inherited at City Hall. Haven’t we all learned, though, that these duplicative agencies, which suffer from lack of accountability and drain the coffers of the City’s general fund, are no longer needed? Please, Mayor Sanders and City Council members, let’s stop the hemorrhaging and put an end to this insanity! As soon as is practicable, put CCDC and SEDC out of business, and return the management and oversight of redevelopment where it belongs: In the hands of officials who are directly accountable to voters and taxpayers.” First, I commend Ian Trowbridge and attorney Cory Briggs for their lawsuit against the SEDC board, seeking to reverse the illegal granting of an entirely undeserved financial severance package to departing agency president, Carolyn Smith. In general, I am not a fan of clogging the court system with wasteful and time-consuming litigation. However, the unlawful and unethical actions of Smith, finance director Dante Dayacap, board chairman Artie Owen, and most of the board members, cry out for judicial reversal and relief, since none of these individuals at SEDC seem capable of making proper decisions on their own. None of the SEDC malcontents appreciate that they are abusing and misusing taxpayer dollars. In the other related news of the day, we hear that Mayor Jerry Sanders is initially nominating four individuals to replace the four SEDC board members who seem to be the most clueless when it comes to being good stewards of the taxpayer dollars that fund the agency. This development was long overdue, but at least it’s finally getting done. However, I still stand by my belief that, in the end, SEDC needs to be eliminated, and its “redevelopment” duties returned to the San Diego City Council, for a number of reasons. First, the City Council already sits as the Redevelopment Agency for the city, so why not cut out the “middle man” that is the various “development corporations”, especially during these lean financial times for the City? Second, by leaving redevelopment policy and decisions with the City Council, it would be in the hands of office holders who are directly accountable to citizens and taxpayers, which the SEDC staff, in particular, has clearly demonstrated that it is not. At least with the City Council members, we have persons who can be recalled or not reelected if they fall seriously short in their duties. Finally, there is no other municipality in So, please, Mayor Sanders, go ahead and appoint replacement board members at SEDC, but “task” them with leading the agency to an eventual, orderly dissolution. The “DC” experiment has failed miserably.” We have also learned of an ineffectual board of directors at SEDC, which I contend did not perform the oversight and fiduciary duties expected of them in their role as stewards of taxpayer dollars. Oh, by the way, all of the board seats are long expired, yet these board members are still there at SEDC. Only in government and the public sector can these board members not only remain in their expired positions, but they vote to provide legal immunity to Carolyn Smith in the event she is sued (and should be) for her malfeasance and disregard for the value of taxpayer dollars. Now, we hear that, last night, the same SEDC board cannot even bring itself to remove Artie “Chip” Owen as the board chairman. The same Owen who, in the view of many, has a glaring conflict of interest in his role at SEDC, given the business that he has personally, financially benefited from in his time as chairman, to the tune of over $1 million. Like a lot of taxpayers in So, given the pattern of unlawful behavior of SEDC officials, and the failure of the board there to vote in ways that protect the sanctity of taxpayer dollars, I now call for Mayor Sanders and the City Council to abolish SEDC. I also call on the offices of the District Attorney, the U.S. Attorney and the Internal Revenue Service to finally step up to the plate and prosecute and punish the long history of obvious wrongdoing at SEDC. Until these actions and investigations are undertaken, the citizens and taxpayers of August 13, 2008. Just when you think things couldn’t get any worse, a new outrage emerges in the scandal involving Carolyn Smith, soon-to-be ex-president of Southeastern Economic Development Corporation (SEDC). Voice of San Diego.org reporter Will Carless now reports that, not only did the SEDC board members agree to provide a nice “golden parachute” severance of just over $100,000 and up to 90 days for president Carolyn Smith to leave the agency, they also granted her immunity from lawsuits that may arise from what I (and others) believe is malfeasance and lack of fiduciary duty on Smith’s part! This unbelievable information follows the news, and becomes relevant because of, a threat on the part of San Diego City Attorney Mike Aguirre to sue Ms. Smith personally to try to recoup some or all of her ill-gotten, taxpayer-funded, financial gains during her tenure at SEDC. If the clause in Carolyn Smith’s severance agreement related to protection from lawsuits is upheld, Smith would likely get off scot free in her raid of the public till at SEDC. But as I read the report, one very big, glaring thought and question came to my mind: The terms of the SEDC board members expired some time ago. That being the case, how can the board members vote on and enter into a legally binding agreement with Ms. Smith granting her immunity from lawsuits that would be based on malfeasance, fraud or lack of fiduciary duty, when the board members themselves are without portfolio? I fired off an email this morning to Will Carless of Voice of San Diego asking him to look into this question, regarding the power and authority of board members whose terms have expired. Let’s see what he (or Mike Aguirre?) comes up with… How Would You Like Your Steak, Ma’am? August 9, 2008. As Voice of San Diego.org and the San Diego Union-Tribune continue to investigate the years of corruption that were orchestrated at the Southeastern Economic Development Corporation (SEDC) by outbound president Carolyn Smith, the details of the many ways in which she abused taxpayer dollars sadly demonstrate her seeming contempt for those of us who are footing the bill. Consider: First, in October, 2007, SEDC very generously gave $3,000 in taxpayer funds to The Catfish Club, a “civic forum” best known for its weekly luncheons that regularly feature San Diego politicians and candidates as guests of honor. (In the interest of full disclosure, I was invited, as a City Council candidate earlier this year, to attend a Catfish Club luncheon event. As someone who is gainfully employed during regular business hours, though, including the lunch hour, I was not able to attend the event. I would have attended, however, if not for work obligations.) Putting aside, for the moment, that taxpayer dollars were used by Carolyn Smith for this “donation” to Catfish Club, there is one other especially pertinent consideration: Catfish Club is run by The Reverend George Walker Smith, the father of Carolyn Smith. Now that the word is out about such a highly inappropriate contribution, will The Reverend return the three-grand? Voice of San Diego.org. Next, Carolyn Smith definitely doesn’t believe in “brown bagging” it when it comes to eating or entertaining guests. Nope, she would rather that taxpayers pony up for things like filet mignon, New York strip steak, veal and other fine dishes at exclusive and upscale eateries, washed down with $4 cups of coffee. Ms. Smith is an exceptional tipper, too, sometimes at double the usual 15% rate most people use. Oh, and Smith’s top financial guy at SEDC, Dante Dayacap, demonstrated that imitation is the sincerest form of flattery by doing much the same thing as his boss, on his own gastronomical excursions. In Dayacap’s case, he says, basically, he splurged in the name of employee morale and team building. Heck, at most of the places I’ve worked, they settle for a couple of pizzas at the office to help boost your self-worth. San Diego Union-Tribune. Sigh!!! Under the terms of her termination, as per the SEDC board of directors (whose terms are expired, by the way), Carolyn Smith can remain there for another couple of months before she must finally depart. Hold on to your wallets, San Diego taxpayers! The pillaging may not be over yet… August 5, 2008. It is my intention to keep this blog focused on San Diego-related issues as much as possible, but governmental actions in To his credit, Governor Schwarzenegger finally, once and for all, wants to act decisively to address the structural problems that keep leading to the recurring deficits and financial crises that so pervade the operations of state government in Sacramento. And naturally, the Republicans and the Democrats in the legislature, for the most part, each have very different views on how to “solve” the structural deficit challenges. In the simplest of terms, the Democrats want to raise taxes, the Republicans want painful budget cuts, and the Governor proposes something more or less in between. Among the three sides – the Governor, the Republicans, and the Democrats – I applaud the Governor (for the most part; read on) and the Republicans for their tough resolve in seeking to restore financial discipline to the State budget. As for the Governor, I raucously commend him on his move to pay most State officials and employees the Federal minimum wage of $6.55 an hour until the budget stalemate is resolved. Is this a headline-grabbing stunt on the part of the governor to draw attention to the seriousness of the fiscal problems in On the other hand, though, I do not approve of the Governor’s proposal to enact a “temporary”, three-year increase in the state sales tax to help pay down the budget deficit. Why not? First, I believe the sales tax is the most regressive levy there is, and hits poor and working class citizens the hardest. Second, Finally, the Republicans in the legislature seem to be holding firm to their insistence that budget cutbacks be a major part of the financial turn-around of our often bloated and misappropriated state budgets. As they (and I) say, we don’t have a revenue problem, we have a spending problem. I hope the Republicans in July 31, 2008. Perhaps not surprisingly, the whole Southeastern Economic Development Corporation (SEDC) scandal just keeps spawning new controversies and outrages. The latest chapter involves the hypocrisy and gall of a so-called “consultant” to the SEDC, Angela Harris. In recent days, she is among the group of illustrious figures pushing for a possible recall election against San Diego City Councilman, Tony Young. While I was critical of what I perceived to be Councilmember Young’s complacency in literally calling the SEDC to account for its financial shenanigans, I do salute Young for finally calling for the termination of Carolyn Smith, the self-enriching president of the redevelopment agency. At a board meeting last week, Ms. Smith was indeed fired, albeit with a very generous “golden parachute” financial settlement. But, back to Ms. Harris, the supposed consultant to SEDC. Is she a hypocrite, as I contend? You decide: This is someone who, a few years ago, benefited from a questionable and poorly managed program that sold affordable homes to needy residents in the area served by SEDC. Voice of San Diego.org. In exchange for promising to remain in one of the affordable homes for ten years, SEDC offered low-income buyers the opportunity to acquire a home at a very attractive price. First, Angela Harris, as a contractor with lucrative ties to SEDC, hardly qualified as low income. And second, she easily refinanced the home, taking out equity, which could, in the end, really drive up the cost of the home if she decides to sell it. A home that was supposed to be “affordable” into the future would likely no longer be so. Again, I remind you, taxpayer dollars are involved in the support of these kinds of schemes. Then, at last week’s meeting of the SEDC board, called to decide the fate of Carolyn Smith, Angela Harris got up, during the public comment period, and told Smith’s critics that they could all “go to Hell!” Hmm. First, Ms. Harris benefits from an SEDC program that, as I and many others see it, she should not have. Then she has the audacity to get up and tell others where to go, as it were. Okay… Now, finally, Angela Harris is leading a purported effort calling for the removal of Tony Young from his Council seat, just because he ultimately called for the firing of Carolyn Smith. Councilmember Young really says it best in pointing out the shamelessness of such a recall effort, as led by Angela Smith: “Really, this is a good example of why we need to reform SEDC, because you have a person who’s benefited personally from SEDC when it comes to housing opportunities, who is making this effort. “(The recall effort) is not going to be supported. It’s just unfortunate because it detracts from the real work we have to do at SEDC.” Voice of San Diego.org. Well said, Tony Young. Very well said! The rank hypocrisy displayed by Angela Harris is both shameful and shameless, at the same time. July 30, 2008. A couple of weeks ago, a dog that served in the San Diego Police Department K9 unit died a horrible death, when the officer that the dog partnered with left the animal locked inside an unventilated vehicle at his home, and where the temperature reached over 100 degrees. Scott Lewis, Co-Executive Editor at one of my favorite online publications, Voice of San Diego.org, wrote a commentary that detailed the agonizing death of the dog, named Forrest. In his piece, Scott also related the tragic death of the dog with a favorable decision that K9 officers received that would allow this group of officers to receive extra compensation when they retire to help care for their K9 dogs. As with many other concerned and shocked readers, I made the following, initial response to Scott’s commentary: “The extra compensation Hubka [the officer involved] and other K9 officers will receive is almost – almost! – beside the point. Hubka, more than anyone else, should appreciate and practice the utmost humane treatment of his animal and “partner.” Now, he should just be deeply ashamed of himself. I hope this tragic event haunts Hubka the rest of his life! The gross negligence that killed the dog sickens and disgusts me. Finally, I hope Hubka is prosecuted to the full extent of the law, convicted, and booted off the police force, with no retirement benefits to come. Please, Scott Lewis and Voice, on behalf of concerned readers and citizens, follow this story as it unfolds, would you? I want to know what kind of justice, in the end, is meted out to Hubka.” In response to my comments, I was strongly admonished by another police officer, who said, “…You absolutely amaze me. You act as if Paul killed his partner on purpose. The City should punish him to the full extent of the Law? You of all people should believe in compassion and the spirit of the law, not just the letter of the law. Paul Hubka made a mistake and after the investigation is over, i [sic] am sure he will be disciplined. Paul deserves to have his impeccable record and tireless dedication to the citizens of this city recognized prior to determining what degree of discipline he receives. You have two-stepped your way around this issue in other venues but I believe the real R.E.L. is present here. The Discusting [sic] truth is quite evident here!” Okay, I will concede that a couple of my lines (“I hope this tragic event haunts Hubka the rest of his life! The gross negligence that killed the dog sickens and disgusts me.”) were said in a sort of “heat of the moment” anger, and were perhaps a little too harsh in the way in which I phrased them. However, I unequivocally stand by the underlying substance and intent of what I said in those two particular sentences. Officer Hubka is indeed entitled to have all mitigating facts and circumstances taken into consideration when he is punished for the death of the dog. But in the other officer’s remarks above, I’m not sure I understand what he means when he says about me, “You have two-stepped your way around this issue in other venues…” Perhaps he will elaborate and lend some clarification to what he is referring to. Then, yesterday, yet another police officer, Jeff Jordon, who is a member of the San Diego Police Officers Association Board of Directors, himself wrote a very long, scathing letter to the editor, blaming exhaustion on the part of Officer Hubka as the likely cause that led to the dog’s death. But Officer Jordon didn’t stop there in his letter, saying, “I blame and have a fair amount of disdain for community members and activists that demand everything from its public servants and want to pay nothing in return. You have your role in this tragedy as well. Paul [Hubka] should not take the blame of Forrest’s death alone. The resources available and the continued demands placed on the San Diego Police Department in its current state made this tragedy fated. Quite frankly, I expected it to happen long before now and I am truly sorry that it cost Forrest his life.” Hmmm, so essentially, all San Diegans are to blame for the death of the dog, Forrest. I felt that Officer Jordon was completely out of line in making such a broad-brush statement, to which I responded, “Officer Jordon: In this case, if the death had been that of a child of Hubka’s, and not a dog, would you still be spouting the same scattershot, “blame everyone in sight” nonsense you have published here? Fatigue? The dog’s death was inevitable? We “community members” have a role in the animal's death? You have disdain for US? If you really feel that way, Mr. Jordon, it’s time for you to go, too, and find another line of work. I agree that our public safety departments are badly understaffed, and that was something I continually addressed as a recent political candidate. But to go hysterical as you have in this letter does nothing to address the core issue: Officer Hubka’s gross negligence in the death of one of God’s creatures, over whom we, as humans, are called upon to be good stewards.” In a subsequent comment, I added, “Officer Jordon: I don't for a moment dispute that understaffing at PD leaves a lot of you absolutely exhausted. Your point on that is well taken, by me anyway, and I really, sincerely do appreciate the overall effort that you and your fellow officers put forth on our behalf. But I honestly, in my heart of hearts, cannot simply write off the death of Forrest to exhaustion. It was caused by one degree or another of negligence on the part of Officer Hubka, and that’s what makes it inexcusable. I have no doubt that Hubka is suffering over what happened. I have no doubt that he loved that dog. But as a K9 officer, Hubka has an extra level of care and duty that he owed to Forrest. Finally, Officer Jordon, you do yourself, Mr. Hubka and your PD colleagues no favor with the tone of your “blame everyone” letter!” Further on, Officer Jordon stated, “[C]itizens and politicians always just scapegoat the individual officer after a tragedy occurs…” Again, I felt Jordon was just reaching way too far, to which I replied, “The expectation of Justice and Accountability are not “scapegoating”, Officer Jordon. A shocking wrong was done here by someone who, above others, should know better. As for the issue of public safety personnel fatigue, my final thought here is that you are right, it is a public policy concern that needs to be addressed in this city, separate and distinct from the incident of the dead dog. If I could personally do something about it, I would. In the campaign, my support for Police and Fire was strong and unquestioned, and still is today. I met personally with some of your colleagues, including another officer who is posting on this topic today. But, over the years, so many city officials let this city go down the tubes in so many ways, the task ahead of rebuilding this city, including public safety, is massive.” I thought the comments by me, Jordon and other Voice readers had pretty well played themselves out, but it was not to be. The first officer that originally replied to my statement about Officer Hubka came back with this: “Look, I am not whining and either is Jeff [Jordon]. We are both asking all of you cop haters, city employee haters and just haters to take a look at yourself be[f]ore you pass the death penalty.” He continued, “Politics play more of a role in their [City officials’] decision making process, unless of course you are a good ole boy or the son or daughter of, or in some cases a minority. Officer Hubka is a white, heterosexual male, which by all indication, will not be any advantage for him.” That officer’s comment was just too much for me. I said in response, “I thought I was finished with my comments on here, but, seeing as how you and I have met and talked before, I am extremely disappointed that you are lumping me in with “cop haters, city employee haters and just haters”. I am none of the above; not even close! Nor have I asked for the “death penalty” or to “see blood”, as you would seem to deem any punishment that Officer Hubka may receive as a result of his clear negligence. Also, why the race and gender references, in relation to how Hubka may be dealt with? Please, sir, do not let yourself fall into the very hyperbole and over the top characterizations that you are accusing others of, just because we demand justice in this case!” The letter that invoked all of this fury was just published yesterday in Voice, so I’m afraid the responses to it will continue for a few more days to come. For my part, I will continue to respond if I feel like I need to, but I hope the hot rhetoric will die down. I will keep you up to date on this tragic story, and the obviously strong feelings it engenders. July 24, 2008. The news came very late in the evening last night, but the Board of Directors at Southeastern Economic Development Corporation (SEDC) apparently voted unanimously to give president Carolyn Smith her walking papers. Oh, and a $100 thousand going-away gift as well, to take the sting out of her forced departure. Jeez, even on her way out, she lards the pot with more green. At least she’s gone, though, and an inexcusable, but sad history at SEDC is now over. Indeed, Ms. Smith had the crocodile tears flowing at last evening’s meeting. More on Carolyn Smith in a moment. I would argue, though, that the housecleaning over at SEDC is only half-done, at best. I (and hopefully the taxpayers of San Diego, too) believe that the board chairman, Artie “Chip” Owen, should be swept out of SEDC as quickly as possible, given his track record of approving the sneaky bonuses for Carolyn Smith and others at the agency, along with his glaringly obvious conflicts (yes, plural, not singular) of interest in representing more than one developer with business ties to SEDC. As mentioned in previous posts, one of those developers, Pacific Development Partners (PDP), currently doing business with SEDC, was willing to pay Mr. Owen as much as $100,000 a year to, well, uh… You get the point. In my view, there is absolutely nothing wrong with anyone gaining personal wealth in the building and development industry, including through the performance of a government contract. This is Finally, as to Carolyn Smith, I’m not sure that her ouster closes the book on her conduct at SEDC. At a minimum, I would hope that the Internal Revenue Service takes a good, hard look at Ms. Smith’s compensation practices in recent years. As I’ve already suggested, I believe the District Attorney and/or the State Attorney General’s office should investigate the corrupt practices at SEDC. Then, Tony Young: Leader? Carolyn Smith: Scofflaw! July 16, 2008. Mayor Jerry Sanders and the City Comptroller, Greg Levin, have demanded an extensive and literal accounting of how funds are spread around at SEDC. Then the mayor, on Tuesday, slashed the funding of SEDC by two-thirds, to a level he and officials in his office determined would be just enough for the development agency to function pending the outcome of investigations into its financial practices. Following on the actions of the mayor’s office, comptroller Levin submitted a nearly thirty-page letter to SEDC Finance Director, Dante Dayacap, demanding extensive and detailed information on both payroll and administrative expenditures. Mr. Levin asserted in his letter to Dayacap that both sets of expenses, over the last four years, do not accord with generally accepted or expected financial standards for a nonprofit agency like SEDC. And Levin demands that the financial data, along with numerous other documents, such as tax forms and project expenditures, be provided by Dayacap and SEDC in just five business days! Good for Levin! At least he’s not messing around. And then there’s the underwhelming reaction of City Councilmember, Tony Young, in whose district the SEDC is charged with conducting most of its business. Despite the overwhelming (and growing) body of evidence of misspending of taxpayer funds at SEDC, Mr. Young is strangely content to sit back and let others do the heavy lifting of investigating the agency. Here’s what Mr. Young forgets in his haste to do nothing: The San Diego City Council, of which he is a member, directly governs the activities of the City’s Redevelopment Agency, which in turn is responsible for oversight of SEDC. What about that governing relationship does Tony Young not understand? Mr. Young, effective representation of the affairs of your district and of the city requires that you step up to the plate during the bad times and work to fix the problems that arise, especially when the scandal rears its ugly head in your backyard. Why leave your reputation and your legacy in the hands of others? Today, reporter Carless “co-hosted” the Voice of San Diego.org feature, “Cafe San Diego”, in which he sought to answer the concerns I raised in a “Letter to the Editor” yesterday regarding the questionable conduct of Carolyn Smith. But I felt like Carless’ Cafe San Diego responses today too easily accepted the explanations of Ms. Smith, along with those of the SEDC board chairman and the San Diego City Councilmembers, regarding the lucrative, taxpayer-financed bonuses. And I felt like the Will Carless of today seemed to be losing a lot of the zeal exhibited by investigator Carless of yesterday. Perhaps some of my responses to Carless’ Cafe comments were a little snarky or rhetorical, but again, it’s only because I truly feel like the sort of “entitlement” behavior exhibited by Ms. Smith is precisely what has gotten this city into the financial predicament it’s now in. Precious taxpayer dollars are wasted with this kind of conduct. Ethics and integrity are knowingly and willfully eroded by officials like Carolyn Smith of SEDC.
Completely Cooked
August 23, 2008. Well, it took longer to unfold, but the inherent weaknesses of the so-called “development corporations” in San Diego are causing another implosion, this time at Center City Development Corporation (CCDC). CCDC is charged with implementing and managing “redevelopment” in a wide area in and around downtown, including East Village and Little Italy. At CCDC, it was once again the agency president, Nancy Graham, whose dishonesty and misconduct demonstrates that the quasi-independent, nonprofit development corporation model is broken. These agencies escape the kind of direct oversight and accountability they should have, if they were under the control of the City’s already existing Redevelopment Agency, which is San Diego City Council.
And again, it was the fine reporters and staff at Voice of San Diego which have detailed the wrongdoing at CCDC. In the CCDC case, president Nancy Graham suddenly resigned a couple of weeks ago when the evidence began mounting that she had an unlawful conflict of interest with a developer who was awarded the contract to construct a massive building and public parking complex downtown, on Market Street. What is worse, in this case, is that her relationship with the developer, Related Co., followed her to San Diego from her previous post, in Florida. In Florida, Graham and her ex-husband netted millions of dollars by working with another subsidiary of Related Co. to build a project there. Apparently, Graham just couldn’t resist the temptation to continue her relationship with the California subsidiary of Related Co. But the conflict-of-interest laws for public servants and officeholders are pretty clear in this state, and Graham did not heed them. So, here is my latest letter to the editor at Voice of San Diego (presently unpublished) regarding the CCDC fiasco:
“Nearly two weeks ago, another writer submitted a letter to Voice about the mounting woes at Center City Development Corporation (CCDC). That letter was presciently entitled, “CCDC: The Slower-Cooking Scandal”. I contend that, not only is CCDC now completely “cooked,” it may not even be palatable any longer and needs to be thrown out. And again, as with its sister agency, Southeastern Economic Development Corporation (SEDC), you had a rogue president who tried to play fast and loose with the rules, and now the ship is sinking.
Band-Aid Solutions, For Now
August 19, 2008. The scandal at Southeastern Economic Development Corporation (SEDC) continues to plod along, with no real meaningful solutions at hand. As reported by Voice of San Diego.org, a couple of new actions are occurring:
First, Ian Trowbridge, a former academic researcher and a San Diego City Council candidate in 2005, has filed a lawsuit against SEDC, alleging a violation of the Brown Act, a state law which forbids government agencies from holding meetings behind closed doors without public notice of the items to be discussed. Voice of San Diego.org. At the notorious meeting in question, while the SEDC board of directors (all but one of whose terms is expired) voted to fire the embattled agency’s president, Carolyn Smith, they also agreed to provide her with $100,000 in severance pay! Along with an additional, dubious provision by the board members to indemnify Ms. Smith from potential litigation arising from her misconduct, it was the six-figure departure bonus that prompted Trowbridge to file his lawsuit.
In the other SEDC-related news of the day, Mayor Jerry Sanders began the process of replacing some of the expired board seats at the agency, with the nominations of four individuals. Voice of San Diego.org. While Mayor Sanders sees the replacement of SEDC board members as a “major step” toward reform of the agency, I respectfully disagree.
I personally like the mayor. I respect his long record of achievements during his career at the San Diego Police Department, and his periods of service thereafter at United Way and the Red Cross. This year, I voted to reelect Mayor Sanders. But I also strongly believe the “development corporation” model, as evidenced by SEDC, is a badly broken model. This core belief on my part prompted another letter to the editor today from me to Voice of San Diego:
“It is somewhat heartening to read in today’s Voice of San Diego of two positive developments – for now – in the ongoing scandal at Southeastern Economic Development Corporation (SEDC).
SEDC: Abolish It!
August 14, 2008. Those of you who have been following my thoughts on the unfolding scandal at Southeastern Economic Development Corporation (SEDC) know that I have been very critical of the obvious conflict of interest on the part of “Chip” Owen, the chairman of the SEDC board of directors. Last night, the board members (whose terms are all expired, remember) voted not to remove Mr. Owen as chairman. In my book, that breaks the camel’s back, so to speak, when the SEDC board cannot find the will to effectively fire Owen. This prompted the following letter from me, which I submitted to Voice of San Diego.org, the online newspaper that has heroically uncovered much of the misconduct at SEDC:
“Until now, I, as a concerned citizen and taxpayer, have practiced restraint as I have followed the reporting on the abuse of tax dollars at Southeastern Economic Development Corporation (SEDC). In Voice of San Diego and elsewhere, we have read reporting on: gross padding of base salaries by SEDC president Carolyn Smith, finance director Dante Dayacap, and others on staff, using taxpayer dollars; extravagant meals and other pricey perks that most working people do not enjoy or reasonably expect from their jobs, using taxpayer dollars; and a six-figure severance package for Carolyn Smith, allowing her to take up to 90 days to depart the job from which she was fired, using taxpayer dollars.
When You Get Behind Closed Doors
To the Guv: No! And, Yes!
Hell Hath No Fury Like a Hypocrite Scorned!
After a Dog’s Death: Us vs. Them?
One Down, (At Least) One to Go
July 18, 2008. Whew! Things are really moving fast and furious (in more than one way) now in the case of Carolyn Smith, the embattled president of SEDC, with new calls for her resignation following the revelations of huge sums of agency funds going into her pocket in recent years. Most importantly, San Diego City Councilman Tony Young has finally, in this particular case, demonstrated some leadership and political wisdom by joining the chorus of officials demanding that Ms. Smith step down immediately. Remember, SEDC performs most of its redevelopment work in Young’s Fourth Council District.
Today, Councilman Young added his name to the growing list of city officials and others who clearly see the likely unlawful misconduct of Carolyn Smith, along with SEDC finance director, Dante Dayacap, and board chairman, Artie “Chip” Owen. Indeed, City Attorney Mike Aguirre today announced that his office is assessing whether the “bonuses” and “acknowledgments” that went to Smith, Dayacap and others at SEDC were a misuse of public funds, i.e., tax dollars. In his statement, Councilman Young said, “...when the very existence of SEDC is threatened by a continuing barrage of allegations of questionable practices and lack of appropriate Board of Director oversight, it is clear to me that management and the Board must take a course of action that is in the best interest of the community.” Voice of San Diego.org.
In their memo, Mayor Sanders and Councilmembers Young, Donna Frye and Ben Hueso gave Carolyn Smith until 5:00pm today to submit her resignation. At the deadline, board chairman Owen stated that Smith would not resign, and that Smith’s employment status would be discussed at an already scheduled board meeting on Wednesday, July 23.
But think about that. What a tangled web! In my (and others) opinion, Owen is directly complicit in approving and granting the ill-gotten bonuses that Smith benefited from. And Owen himself has also received very large sums of money – as much as $100,000 per year – from a developer, Pacific Development Partners, with direct business ties to SEDC. Now Owen both “giveth” and “taketh away”: He gives Smith the covert bonuses and then smacks her down for taking them? How utterly unbelievable!
’It Hits the Fan: The Beginning
SEDC: The Fallout Continues
July 13, 2008. Continued praise to Voice of San Diego.org for unearthing more outrageous information on the Southeastern Economic Development Corporation (SEDC), its president, Carolyn Smith, and the board chairman, Chip Owen. What more have we learned?
First, Mr. Owen cannot credibly be said, with a straight face, to be objective in his dealings with SEDC. As Voice reporter Will Carless and Co-Executive Editor, Andrew Donohue, lay out in another story, Owen receives large amounts of cash himself, from principals at Pacific Development Partners (PDP), which is invested in the controversial Valencia Business Park, which in turn was initiated by SEDC. With me so far? Okay, how much cash? As much as $100,000 a year in the past few years. And why is the Valencia Business Park so controversial? Because PDP initially bid $1.5 million for the project, but then materially changed its plans for Valencia, and was sued (the case is still in mediation) for fraud and breach of contract by the landowner who sold the property to PDP.
The landowner had allegedly been led to believe that PDP was going to develop a less lucrative project, for which the landowner received a lower price. However, the City of San Diego would not rezone the property from industrial to commercial, so SEDC put the project out for a rebid. PDP ended up reacquiring the property for nearly $1 million less. So, how Owen can claim to be entirely impartial in his dealings with Carolyn Smith and SEDC does not, I believe, pass the “smell test.”
Next, we learn that San Diego City Councilmember, Kevin Faulconer, who chairs the Council’s Audit Committee, will eventually, in September – a month and a half from now – get around to questioning Carolyn Smith and the other individuals involved in the SEDC scandal. Or so he hopes. Well, okay, enjoy the lazy days of summer, Mr. Faulconer. The taxpayers of San Diego appreciate your diligence and sense of urgency in the matter.
Finally, coming as no surprise, SEDC could conceivably have its tax-exempt status yanked by the Internal Revenue Service (IRS) because of Ms. Smith’s lavishing of likely unlawful bonuses on herself and a top assistant. You see, IRS regulations require that cash bonuses for personnel working at a nonprofit entity can only be granted based on employee performance. Additionally, SEDC and Ms. Smith, individually, could face serious monetary sanctions from the IRS for misappropriation of tax-exempt funds.
So, with all of this in mind, here is the text of my latest “Letter to the Editor” to Voice of San Diego.org:
“A few follow-up points to my last letter, related to the mess at SEDC:
1. I’m glad to see that the City Council, which, as the Redevelopment Agency, is the ultimate oversight body in matters related to SEDC, has finally seen the light (or the darkness, as it were) and shifted into investigative mode. If this oversight had been undertaken long ago and in a meaningful, consistent way, Jim Madaffer and his colleagues would not now have to get “mad,” after the damage is already done.
I am disturbed, though, that Councilman Kevin Faulconer feels that it’s acceptable to wait a month and a half, until September, to really plow into the details of the SEDC scandal. As I pointed out before, the Council and its relevant committees meet just about every week throughout the year, and should have already unmasked the misbehavior at SEDC. Perhaps he and his colleagues are just too exhausted and bone-tired, and the Summer Break takes precedence over conscientious stewardship of taxpayer dollars.
2. I do commend Councilman Madaffer for suggesting that it is past time to shut down the SEDC. As some experts have been quoted in Voice of San Diego and elsewhere, San Diego is one of the very few cities in California that uses the quasi-independent, non-profit redevelopment agency model. I agree that the functions “tasked” to SEDC, for reasons of efficiency and accountability, should simply remain within the Redevelopment Agency, i.e., the City Council.
3. For reasons of both conflict of interest and incompetence (or worse), SEDC Board Chairman “Chip” Owen should resign. At this point in time, with all of the damage that’s been done at SEDC with taxpayer dollars, I feel it’s too late for Owen to promise recusal or some other means of distancing himself from the business of SEDC. As Voice reported, Mr. Owen receives very generous compensation from Pacific Development Partners, the developers of Valencia Business Park, which is overseen by SEDC. And given that, at a minimum, Owen was aware of the overly generous bonuses that Carolyn Smith, SEDC president, was giving herself and a top assistant, he has displayed a similar, callous disregard for the taxpayers of San Diego as Smith has.
4. I hope the Internal Revenue Service thoroughly investigates the SEDC’s abuse of its non-profit status and comes down hard on Carolyn Smith. As harsh as it may sound, sometimes we need examples to be made of scofflaws, like Ms. Smith, who abuse the law and the public trust for their own sneaky greed. Of course, Ms. Smith could redeem whatever shred of good that’s left in her reputation and resign. In my opinion, the truly hardworking taxpayers of San Diego deserve no less.”
Deja Vu, Part Deux...
July 9, 2008. Yesterday, Will Carless of Voice of San Diego.org wrote an investigative piece, “Without Oversight, SEDC Officials Award Themselves Bonuses”, that was both maddening and masterful. The article exposed what I consider to be the secretive and arrogant conduct of Carolyn Smith, president of Southeastern Economic Development Corporation (SEDC), a redevelopment agency of the City of San Diego. Remember, as a government entity, SEDC is funded with taxpayer dollars.
In the last couple of years, though, Ms. Smith has forgotten her duty to taxpayers and has shamelessly granted herself five-figure bonuses that grossly pad her base salary. To hide her misfeasance, Ms. Smith, in official financial reports, uses terms like “acknowledgment” to refer to these piggish bonuses. Then, when someone like a reporter or a San Diego City Councilmember wants an explanation of her behavior, Ms. Smith tries to obfuscate by claiming “privacy concerns.”
I responded to Carless’ Cafe comments: “Thank you, Will, for highlighting my letter regarding what I [s]till believe to be, even with your explanations above, the sneaky and contemptuous behavior of Carolyn Smith. First, you say Smith uses the cover of “privacy concerns” to withhold information about bonuses and extra compensation, disguised as “acknowledgments.” Umm, okay. But didn't the California Supreme Court address that very issue last year, in the Contra Costa Times v. City of Oakland case, that information on government employee compensation cannot be kept secret? Second, Smith is right that she “never overspends on its [SEDC] employees”. Yeah, because an unjustifiable and disproportionate amount of the budget went to her and her top assistant, Dayacap!!! Third, the fact that only SEDC board chairman, Owen, is seemingly aware of how much of the budget Smith is showering on herself and Dayacap means that he is complicit in hiding these details from the rest of the board, the City Council, and taxpayers. And if the other members of the SEDC board are not asking questions, what are they doing there? They’re not contributing anything toward accountability and transparency, that’s for sure! Fourth, Will, I feel like you’re going way too easy on the City Council members by saying, “But that budget only contains two small line items that are vaguely worded and could easily be overlooked. It’s not as if these bonuses are spelled out anywhere.” The Council members have weekly budgetary and oversight committee hearings throughout the year. They have the power – and the responsibility – to ask the probing questions in committee and during the meeting of the full Council each week. Sorry, but, in my book, the “[not] spelled out anywhere” excuse doesn't fly. Come on, Will, don't weaken your original investigation by going limp in the end!”
This kind of crappy stuff is what motivated me to run for City Council in the recent primary election. I said then and say now: Enough is enough!
Deja Vu, All Over Again!
July 8, 2008. Kudos to Voice of San Diego.org reporter Will Carless for his investigation of the suspect behavior of the president of the Southeastern Economic Development Corporation, Carolyn Smith, who runs the City agency charged with redevelopment of blighted areas in many of the neighborhoods of southeastern San Diego. Ms. Smith seems to have no qualms about giving huge, five-figure bonuses, at taxpayers’ expense, to herself and her top deputy, substantially inflating their annual, base compensation in recent years. And when she is asked by, oh, say, City Council members, for example, to detail and explain these grossly overgenerous gifts to herself, she basically tells them to take a hike.
I was outraged at what I read about Ms. Smith in Carless’ report, and submitted this “Letter to the Editor” to Voice of San Diego.org:
“Will Carless has done an outstanding job of investigative journalism regarding the secretive and excessive ladling out of dubious bonuses and other financial compensation at Southeastern Economic Development Corp. I have a few questions about how this can happen in the way it apparently has:
1. How is it possible that Carolyn Smith and an agency like the SEDC, which gets its funding from taxpayer dollars, can possibly contend that how she spreads around the bucks is, effectively, none of our business?
2. Why are the SEDC board members allowing Ms. Smith to get away with such a “mind your own business” attitude and practice?
3. Likewise, why is the City Council, as the city’s Redevelopment Agency, allowing Ms. Smith to snub their requests for salary and compensation details? In Carless’ article, Council Member Ben Hueso is quoted as conceding that the council members have been told to basically buzz off. Haven’t at least five of the council members – Scott Peters, Toni Atkins, Brian Maienschein, Donna Frye and Jim Madaffer – who were deemed “negligent” for not performing their fiduciary duties in the city employee pension scandal, learned their lesson about taking such a hands-off, “oh, well” stance when it comes to managing taxpayer dollars?
If Ms. Smith is unwilling to give a detailed accounting of how and where taxpayer dollars are going at SEDC, then I think it’s well past time for the District Attorney or the U.S. Attorney’s office to step in and “help” Ms. Smith with the task. These kinds of financial shenanigans must stop!”
It is exactly this kind of arrogant disregard for taxpayers on the part of some City of San Diego officials that motivated me to run for City Council. Today, Mayor Jerry Sanders also responded to the news of the financial misfeasance at SEDC, demanding answers from the board chairman, Chip Owen. I will continue to follow this unsettling story...