An inquiry into a bizarre Indian landfill deal involving a former city of San Diego administrator found no evidence of fraud or wrongdoing, a city auditor said this week.

Investigator Al Allison looked into what city officials called an unauthorized partnership between the city and a private Indian company to bid on multiple landfills in Mumbai, India following our story on the deal. The story detailed no specific allegations of fraud, but City Attorney Jan Goldsmith referred the matter to the auditor for review.

Allison said he found no fraud or other wrongdoing, but would not reveal details of his investigation.

Typically, he said, investigations that result in no findings of fraud aren’t released. But he disclosed the inquiry’s outcome because of public interest in the issue.

The landfill deal appeared to partner the city of San Diego with an Indian company to provide technical support to build two landfills in Mumbai. In exchange, the city would receive a 26 percent stake in the first five years of the contract. The agreements didn’t specify how the city would have realized its return, but one landfill contract was awarded to a different Indian firm for the equivalent of $922 million.

City leaders have blamed a former city administrator, Elmer Heap, for agreeing to the partnership without proper approval and they have maintained the deals always were void.

Allison said his investigation wasn’t complete, but made the bulk of his findings by mid-June.

Meantime, in a May letter the city of Mumbai’s chief engineer asked San Diego officials to formally acknowledge the deals were void. The losing Indian company sued the city of Mumbai and the winning firm and the case is pending in Indian court. San Diego’s involvement in the deal is an issue in the suit.

In response to the letter, city Chief Operating Officer Jay Goldstone mailed Mumbai’s engineer a copy of previously revoked agreements between the city and the Indian company and a city attorney opinion outlining proper contracting procedures. (City Attorney Jan Goldsmith gave me the opinion when explaining why the agreements were void.)

“Aside from this correspondence and the enclosed documents, the City of San Diego does not intend to comment further on this matter at this time,” Goldstone wrote.


Dagny Salas was web editor at Voice of San Diego from 2010 to 2013. She was an investigative fellow at VOSD from 2009 to 2010.

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