Nancy Graham, the former Centre City Development Corp. president, was fined $32,000 Thursday by the San Diego Ethics Commission, ending a two-year saga that derailed nearly $2 billion in downtown projects, drew FBI attention and almost took down the city’s downtown redevelopment agency.
Graham, who didn’t attend the hearing, was penalized for failing to report some $3.5 million she received from a private business deal done in Florida before moving here in 2005. The commission found that she violated city ethics laws 18 times.
Her partners in that deal, which included the Lennar Corp., paid Graham while she was CCDC’s president. But she never reported that income on her annual conflict-of-interest disclosures. Without any stated conflict, she went on to negotiate the terms of a downtown hotel proposed on land Lennar owned near Petco Park.
The issue went unnoticed until I asked her about it in spring 2008.
She told me that the private deal was long in her past, that she hadn’t had any interest in the private deal for years. She said she’d sold her interests in N-K Ventures, the business she owned with her former husband.
“I have no interest in N-K or anything they do,” Graham told me in 2008. “It is a bullshit argument by either sour grapes losers or other people.”
That claim proved false.
In fact, it was Graham’s own testimony — this time under oath, not to me — that unraveled her changing story. We found a sworn deposition she’d given in 2007. In it, Graham acknowledged receiving $125,000 from the Lennar deal while she was CCDC’s president.
At the same time she was negotiating a deal with Lennar, the company was paying her profits from the old business deal.
That drew the Ethics Commission’s attention, prompting an investigation that started in the summer of 2008 and ended Thursday night.
A three-member panel of commissioners had proposed fining Graham $25,000. But two other commissioners, John O’Neill and Bud Wetzler, argued for more. O’Neill pointed to Graham’s public statements and called them disingenuous. He recalled a statement she made during a day-long ethics hearing in May when she claimed she didn’t know that building a hotel near Petco Park would be profitable to its developers.
O’Neill held up a blue post-it note he’d written in his notes about that claim. It simply said: “Absurd.”
“The record does show an attempt to deceive,” O’Neill said.
Wetzler said Graham’s actions, coming at the top levels of the organization, were “one of the most serious of all violations we could have.”
“I’m convinced,” he said, “that someplace along the line she shifted from accidental to intent.”
A $36,000 fine was entertained and rejected; the five commissioners had to unanimously agree, and two did not.
So they deliberated quietly and settled on $32,000 — less than the maximum $90,000 that could’ve been levied but more than originally proposed. The fine was unanimously approved.
Graham was fined $4,000 each on two violations: Preparing a staff report on the hotel project and discussing it at a CCDC board meeting. She was fined $1,500 apiece for 16 other violations, including sending e-mails and participating in negotiations about the project.
It’s the second-largest fine in the Ethics Commission’s nine-year history.
— ROB DAVIS