The Morning Report
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Friday, Aug. 22, 2008 | In 1996, Jack Kemp tried to make a point about fatherhood and families while he was running for vice president on former Sen. Bob Dole’s presidential ticket.
Kemp acknowledged that what he was about to say could get him in trouble if it was “taken out of context” but he said it anyway: He praised Nation of Islam leader Louis Farrakhan, whose self-help philosophy Kemp said was “wonderful.”
Farrakhan, of course, was also well known for other philosophies — including a touch of anti-Semitism. And so, rather predictably, Kemp’s remark provoked a firestorm and severe headache for the Dole-Kemp campaign.
Fred Maas — who now heads the board of directors of San Diego’s Centre City Development Corp. — was a top aide to Kemp then and it fell to him to help quell the controversy.
Now he’s got another problem on his hands. But Maas said the stress of that experience with Kemp dwarfs the pressure he’s felt in the last several weeks as revelation after revelation made it more and more clear that CCDC’s now-former president, Nancy Graham, deliberately misled the city about potential conflicts of interest she had with the developer of a major project planned for downtown San Diego.
The organization she led, and then fled, is in trouble. And it’s not just because of her. CCDC’s raison d’etre was already crumbling. Downtown has been built. In many people’s minds, it’s time for city leaders to unravel CCDC. It’s time for downtown to pay back the city that built it. It’s time to pay attention to the crumbling infrastructure in other neighborhoods.
If CCDC is to be saved from this sordid series of deceptions — and that should still be an “if” — it will have Fred Maas to thank.
Maas is scrambling to rescue CCDC in the midst of a blizzard of revelations about Graham, its leader of nearly three years. He’s doing a lot right. But he’s going to have to do everything right to succeed.
It started when investigative reporter Rob Davis took a look at whether Graham had a conflict of interest with regard to a major proposed development downtown at 7th and Market. It’s a 41-story condo and hotel project. At least it was.
Graham declared to Davis that not only did she not have a conflict of interest but that she had recused herself from dealing with the project in any form just to free herself from any whacky perception. This was fine until Davis revealed subsequently that if Graham “recused” herself, it was the kind of recusal where you keep working on whatever you supposedly recused yourself from. In other words, she was full of it. Then it turned out, as Davis revealed, that Graham had not only not recused herself, but she was actually quite active in negotiating the details of the project and she had indeed a financial interest in an affiliate of the firm that was building it.
Maas and his colleagues on CCDC’s board were Graham’s bosses. At first he stood behind her. After all, he had supported her hiring. He worked closely with her. You don’t want to believe that someone you helped hire would mislead you. He loyally declared that there was a “Chinese Wall” formed between Graham and the project and he trusted she was staying on her side.
Over time, as evidence emerged that she was involved in the project, Maas had a choice to make. He could feverishly back her and follow the tradition of local leaders trying to protect the reputation of their agencies by aggressively defending them against any and all critics. Or he could do something outside of the San Diego mold — he could say he was keeping an open mind and would listen to the criticisms that arose and see if they had merit.
He chose the latter. Right move.
Maas instigated an internal investigation to determine whether he had reason to stand behind Graham or whether he had reason to do something more.
And then, as more information came out, he had another choice. He could protect the massive condo/hotel project CCDC had supported — the one that Graham had now put her mark on — or he could put it on hold, if not scuttle it entirely, and send the message that even the perception of a conflict of interest would not be tolerated. The bidding, planning and approval might just have to begin again.
He chose, again, the latter. Right move. The builders will not be breaking ground any time soon.
Then, you might have noticed the other day, a headline that read “CCDC Suspends Investigation” regarding the probe into whether the former head of the Centre City Development Corp., Nancy Graham, had a conflict of interest.
At first, such a headline might give you the impression Ms. Graham no longer was in trouble. Truth is, of course, Davis’ continued revelations and the disclosures of documents by City Attorney Mike Aguirre made further probing unnecessary. Maas recognized he could save everyone time and money by pulling back the investigators. The conflict of interest was obvious — there was a smoking gun.
“There was no sense being stubborn in the face of what seemed like incontrovertible evidence,” Maas told me.
And then Thursday, as the realization set in that Graham’s efforts on behalf of the massive Ballpark Village development may seriously cripple it as well, Maas hired Bob Stern — considered the state’s foremost expert on government ethics — to try to help them wade through the next phase: what else could be in trouble because of Graham.
On this, Maas could have acted quicker. As Maas recognized in his discussion with me, this wasn’t like the more frequent type of conflicts we see here: the ones where one member of a large board should have stayed away from a vote in which they had some kind of interest.
This is bigger and more complicated. As the leader of CCDC, Graham touched everything — directed all. Maas will need to take his decisive approach to every single project CCDC touched during her tenure.
Perhaps he’s still uneasy with the task. It’s in San Diego’s blood to refuse to admit something’s true until someone holds up a document in your face that you may have actually wrote that says it’s true.
San Diego leaders have always had a fundamental problem with crisis management. Dick Murphy could still be mayor right now had he learned a simple lesson about managing scandal: Keep an open mind that you might be wrong and that your organization could, indeed, have done something wrong.
Murphy’s basic error — repeated over and over again in 2003, 2004 and 2005 — was that, in dealing with the now legendary pension crisis, he put up reason after reason why we shouldn’t worry about it. And when reporters found out that each of those reasons was hollow or worthless, it was a bigger story than it had to be because it directly contradicted what the mayor was claiming. This happened for months, until the mayor’s credibility was shot and he eventually had to resign.
Had he kept an open mind, been willing to admit error or misdirection, he may still be mayor.
Fred Maas is no miracle worker. But if CCDC survives this mess, it’ll be because of him. The next few weeks will judge his performance.
This could have been the death blow. When Nancy Graham, CCDC’s appointed leader, treated the city’s disclosure and conflict of interest laws like a welcome mat to wipe your shoes on, it could have been the last straw for a city just waiting for a reason to disband the agency.
Had Maas dug in, his credibility — like Murphy’s — would eventually have been shattered by the stream of stories proving him wrong. He hasn’t let that happen so far.
He’s now looking into every single thing Graham touched to see if it’s tainted.
Unfortunately for him and for CCDC, there’s a pretty good chance it is. And no matter how well you handle a flood, sometimes it’s just destined to drown you.
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