Had the Southeastern Economic Development Corp’s board known then what it now knows about the conduct of former SEDC President Carolyn Y. Smith, it probably wouldn’t have offered her a lucrative severance package back in July, and may have fired her for cause, acting SEDC interim leader Brian Trotier told the agency’s board this evening.

“In my opinion, as your acting interim chief administrator, since that [severance] agreement was executed, sufficient information has come to the attention of the board to justify the board terminating the severance agreement,” Trotier said. “I believe, had the board been privy to this information, they likely would not have entered into the severance agreement and might have terminated Carolyn Smith for cause.”

At tonight’s board meeting, the SEDC board voted unanimously to nullify its previous action on July 23, when it voted in closed session to pay Smith $100,350 in severance pay.

The board voted to continue the matter to its Personnel and Budget Committee, which will further discuss the issue at its next meeting. That’s a significant move and marks a change of course for a board that has, until tonight, stood by the severance payment.

Trotier did not elaborate on the information he was referring to that might have changed the board members minds, but two months after Smith’s ouster from SEDC and the announcement of the payment in the wake of a voiceofsandiego.org investigation, an audit of the agency found that its compensation practices rose “to the level of fraud.”

Smith’s controversial severance payment, which came on the heels of her firing from the agency in the midst of a scandal over bonuses and extra compensation she approved for herself and her employees without the approval of the City Council or the agency’s board, has been challenged since it was first announced.

Local activist Ian Trowbridge challenged the board’s action in a lawsuit that claimed it violated the state’s open meetings law, known as the Brown Act. In November, a Superior Court judge issued a preliminary injunction to bar SEDC from issuing Smith a check.

Smith has appealed that decision and Trowbridge’s attorney, Cory Briggs, has repeatedly offered to drop the lawsuit if SEDC’s board discusses and votes on the payment in an open meeting, as he claims they should have done in the first place.

The board has already attempted once to cure the alleged violation.

Last September, the board voted, in open session, to pay Smith the severance package. But that vote was taken immediately after a closed session discussion, and Briggs successfully challenged its veracity in court, arguing that the board had merely rubber stamped a decision in open session that it had already made in the closed session.

Briggs told me earlier today that he expected the SEDC board to both discuss and approve the severance package in the open session of tonight’s meeting, something that he said would — finally — cure the board’s prior Brown Act violation.

Instead, by voting to nullify its previous action and by refusing to discuss or approve the severance payment in its open session, the board has sent a clear signal that it is reconsidering the merits of paying the money to Smith at all.


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