Monday, Nov. 17, 2008 | On a sweltering evening in late July, the Southeastern Economic Development Corp.’s board of directors considered the fate of SEDC President Carolyn Y. Smith, who had recently been exposed for paying herself and her staff more than $1 million in hidden bonuses over the course of the last five years.
As the audience sweated in the evening heat, several members of the local community stood before the board and offered emotional statements in defense of Smith, who had been called on by the mayor and three City Council members to resign. Last in the long line of speakers was Angela Harris, whose speech brought the crowd’s indignation to its zenith.
“This is a travesty, it’s a campaign against Carolyn Smith, a woman of stellar, impeccable morals, abilities, capacity,” Harris said, her voice rising with every word. “To Carolyn Smith, I love you. You are a phenomenal woman, you have done a phenomenal job and the City Council and mayor can go to hell.”
What Harris didn’t say, and what at least three SEDC board members didn’t know, was that for at least the last eight years Harris had received no-bid consulting contracts from Smith that had paid her more than $350,000. Minutes of SEDC board meetings dating back to 2003 make no mention of those contracts being disclosed to the board, as they are required to be under SEDC policy.
Since 2000, the public agency has paid Harris between $40,000 and $50,000 a year under those contracts for consulting and outreach services. However, an investigation of the last eight years’ worth of invoices Harris filed for that work revealed that she billed SEDC for scores of hours of training, workshops and meetings that the people she claimed to be helping said never took place.
And, at the same time she was on the SEDC payroll, Harris attended public meetings to speak in support of SEDC proposals or Smith specifically without disclosing her role as a consultant. During the same time period, she was also awarded a coveted price-controlled home overseen by SEDC.
Those in and around the agency say she was more of a lobbyist for Smith than a legitimate community consultant. Harris’ undisclosed contracts and the questions about her work as a consultant add to the troubled legacy of Smith’s 14-year tenure at SEDC’s helm, a period in which the agency’s rules were frequently ignored and significant budget information was kept from the board of directors, at times to the benefit of Smith or those close to her.
“She was hired because she was a friend of Carolyn’s, simple,” said Herb Cawthorne, a former SEDC vice president who was once Harris’ direct supervisor but was fired in 2006. “She was a political hack who was working for Carolyn, rounding people up on buses to support her at the Planning Commission or the City Council.”
Smith has since been fired in the fallout over the bonus scandal, and the FBI recently seized SEDC computers and has interviewed at least two board members.
Smith and Harris refused to be interviewed for this story. Harris provided a brief e-mail statement that partially addressed her work for the agency and said her contract with SEDC ended on June 30 at her request; she refused to provide the names of any people or organizations she had worked with on behalf of SEDC beyond those few listed on her invoices.
SEDC is a city of San Diego agency responsible for revitalizing some of the city’s poorest neighborhoods. Harris’ contracts state that she was hired to provide SEDC with “multi-family housing outreach consulting services,” to create a series of workshops for property managers in the agency’s sphere of influence, and to provide “general outreach services for various redevelopment activities on an as-needed basis.”
The vast majority of hours Harris billed SEDC for provide a simple description of work done for unnamed clients, displaced residents or property managers. The MAAC Project, a nonprofit organization that provides social services for low- and moderate-income families in San Diego, is one of only four organizations named in Harris’ invoices for the last two years.
Between Oct. 1, 2007 and April 30, 2008, Harris billed SEDC for 163 hours of workshops and staff training that she claimed to have completed for the MAAC Project, charging the agency $50 an hour, or $8,150 for the work.
But Arnulfo Manriquez, the organization’s chief operating officer, said Harris hasn’t provided training for the group for years, if ever. He was perplexed by the invoices and Harris’ claims that she had worked with his organization.
“She’s been over here for lunch, once, since the beginning of the year,” he said. “She certainly never did any training or anything like that.”
Harris e-mailed a statement to voiceofsandiego.org regarding the MAAC Project billing. “The Harris Consulting Group is not in receipt of any notification from SEDC regarding incomplete tasks,” it states.
Manriquez said Harris last performed a service for the MAAC Project in late 2006, when she convened two meetings for residents at the President John Adams Apartments, a housing project managed by the organization, after there was a shooting at the property.
Harris’ invoices show she billed SEDC for a total of 26 hours, or $1,300, for arranging meetings related to the shooting. But Manriquez pointed out that Harris also sent the MAAC Project a $1,500 bill for setting up the same meetings.
Harris’ e-mail states that she split the invoice for the meetings between SEDC and the MAAC Project. But Manriquez said there was no indication from Harris that anyone other than the MAAC Project was paying for her services. He said his staff didn’t know that Harris was being paid by SEDC for the meetings.
Manriquez said that in recent days, after Harris was contacted for this story, she began showing up at one of his projects and that in the last few days she convened a resident meeting at the project without his organization’s permission. “My staff almost had to intervene,” he said.
Harris also billed SEDC for several meetings with the southeastern division of the San Diego Police Department during the last eight years, including a recent meeting at which she claimed to have discussed issues with the current southeastern division captain, Tony McElroy.
McElroy said he’s seen Harris at public meetings, but couldn’t remember ever meeting with her personally. McElroy’s predecessor, Cesar Solis, who served as the southeastern division captain between 2006 and 2008, said he had no idea who Harris was.
And Harris also billed SEDC for dozens of meetings with clients of the Urban League of San Diego County, another local community group, between November 2006 and May of this year.
Ray King, president and CEO of the group, said he could find no record of the Urban League having any relationship with SEDC for consulting work done by Harris. But King pointed out that between Sept. 2007 and Oct. 31, 2008, Harris was employed full-time by the Urban League as its vice president of housing and community development.
“Before that, she was some kind of consultant,” King said.
A recent audit of SEDC by Macias Consulting Group said the agency “does not adequately justify and document its selection of consultants, which may contribute to an appearance of impropriety about the consultant selection process.”
Under SEDC’s rules, Smith had authority to enter into contracts worth less than $50,000, the audit states. But she was required to immediately disclose such contracts to the board, and the auditors found no evidence that Smith did so.
Additionally, any contract above $50,000 had to be approved by the full board. However, another SEDC consultant, Herman Collins, has received at least five contracts worth more than $50,000 since 2004. Records from the last five years of SEDC board meetings indicate that only one of those contracts was approved by the board.
Those board meeting records also make no mention of Harris, though she signed at least four contracts with the agency in the last five years. Cruz Gonzalez, the current SEDC board chairman, who has sat on the board for almost two years, said he doesn’t remember Harris’ role at the agency ever being discussed, and that he has never understood why she’s employed by the agency.
Rich Geisler, who joined the board in January 2007, knew Harris from her regular speeches at SEDC board meetings, but didn’t know she had a contractual relationship with the agency.
“I didn’t even know she was a consultant of ours,” he said.
Cawthorne, the former SEDC vice president, said Smith unilaterally drew up Harris’ contracts. He said he and SEDC finance employees raised questions about Harris’ billing records and asked why she was employed by the agency, but those questions fell on deaf ears.
“There was legitimate, serious concern on my part and on (Finance Director Dante) Dayacap’s part that she wasn’t doing the work, that she was used as a political flak, and paid for such, and that the invoices were to be paid without comment,” Cawthorne said. “When it was brought up that there were problems, it was ignored.”
Harris has been visible in one area: She often shows up at public meetings and speaks in support of Smith or SEDC initiatives, though she doesn’t disclose that she’s paid by the agency.
At a Dec. 6, 2007 Planning Commission hearing, Harris spoke in favor of a controversial SEDC proposal to rezone the Valencia Business Park, a move that had the potential to significantly boost the value of the land for an SEDC-chosen developer.
She represented herself as a community resident and said she’d collected 238 signatures in the community supporting the rezone.
But Harris didn’t say she was a paid SEDC consultant. Nor did she mention that a home she had purchased in the area was a price-controlled unit subsidized by SEDC in 2004 meant for low and moderate income residents. The City Attorney’s Office later found that the awarding of the home to Harris created the appearance of favoritism and that there was no record that SEDC or the project’s developer ever analyzed whether Harris was financially eligible to purchase income restricted housing.
Harris also launched a recall effort against Councilman Tony Young, whose district houses much of the area influenced by SEDC, after he called on Smith to resign in the wake of the bonus scandal. Harris held a press conference to announce the recall effort, and worked to drum up support in the community for dropping Young.
At no point in the process did Harris disclose that she had earned hundreds of thousands of dollars in contracts agreed unilaterally by Smith, something Young said does not befit a publicly paid consultant.
“I think it’s pretty clear that there’s a conflict there,” Young said. “People could see it more as her being more interested in protecting her contract, and many people did see it that way.”
Please contact Will Carless directly at will.carless@voiceofsandiego.org with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.