Last week prosecutors brought criminal embezzlement charges against the two former top officials of the Southeastern Economic Development Corp.
We first began investigating SEDC, a city of San Diego redevelopment agency, in 2006 and have looked at the agency’s affordable housing failures, contracting problems, curious land deals, broken promises and, most relevant to the criminal charges, its hidden bonuses.
Here’s a stroll through our archives for some highlights of our coverage, which has won the Society of Professional Journalists’ Sigma Delta Chi award and the Investigative Reporters and Editors’ award for online investigative reporting:
Affordable No More (Oct. 2, 2006)
The Village at Euclid project started off looking like an affordable housing dream. It ended up quietly unraveling, as the agency allowed the developer to forgo putting affordable housing restrictions on all but one of the 23 units despite the public’s investment. Homes were flipped for outsized profits. The employee who warned about it was fired for “continued insubordination.” And an SEDC consultant, a close ally of President Carolyn Y. Smith, received one of its sought-after homes in a different development.
A Trail of Broken Promises (Nov. 13, 2007)
A local small business claims Smith duped it into signing away its land rights, killing its plans for expansion on the industrial land and paving the way for a developer closely connected to SEDC’s board chairman to reap larger profits from the deal.
A Mundane Zoning Change, a Potential Boon (Jan. 2, 2008)
That developer, Pacific Development Partners, was poised to see the value of that land it purchased from the city and SEDC double or triple if a seemingly mundane zoning change passed the City Council. There was no indication that the sales price would be renegotiated or that the developers’ claims that there was a lack of interest in industrial land were supported. The development deal was later taken away from PDP after the bonus scandal hit and has been awarded to a local pastor.
The Budget with an Extra Pay Boost (July 27, 2007)
This is when we got the first whiff that something wasn’t adding up in how SEDC paid its employees. Our budget analysis showed that SEDC’s employee pay was primed to jump significantly more than had been represented in front of the City Council by Smith.
Without Oversight, SEDC Officials Award Themselves Bonuses (July 8, 2008)
From the story:
For several years, the president of the agency tasked with redeveloping some of San Diego’s most blighted neighborhoods has been paying herself and her top deputy tens of thousands of dollars in bonuses and extra compensation unbeknownst to members of the City Council or the agency’s board.
SEDC’s responses to the story didn’t add up; a city audit later said the bonuses rose to the level of fraud; Smith, financial director Dante Dayacap and a majority of board members were forced out and the agency has since sought to reinvent itself while struggling for survival.
Where SEDC’s Bonuses Came From (Sept. 12, 2008)
Before last week’s criminal charges dropped, we had sussed out how we thought SEDC was able to pay exorbitant bonuses while still remaining below its City Council-approved budget. In a story we published a few weeks after the bonus scandal broke, we laid out in detail how the agency had kept key positions open and used the savings from those positions to pay out lavish bonuses. Almost three years later, the state Attorney General’s Office came to the same conclusion.
How City Hall Ignored Warning Signs on SEDC (Aug. 21, 2008)
From the story:
A review of interviews, documents, official actions and public statements shows that, before the bonus scandal incited public outrage, few if any City Hall officials felt obligated to exercise oversight or conduct substantial questioning of SEDC, a nonprofit city redevelopment agency with an annual budget of about $50 million.
Consultant’s Contracts Not Disclosed, Work Not Evident (Nov. 17, 2008)
The agency paid a close associate of Smith, Angela Harris, more than $350,000 in no-bid consulting contracts over eight years, a relationship that didn’t appear to have been disclosed to the SEDC board. Our investigation showed that she billed for work that the people she claimed to be helping said never took place. People in and around the agency said Harris, the consultant who’d received the home in our first investigation, was more of a lobbyist for Smith than a legitimate community consultant.
‘We’re Going to Get our Money’ (May 3, 2011)
The embezzlement and misappropriation of public funds charges brought last week by the state Attorney General’s Office against Smith and Dayacap revealed extraordinary new details about the sometimes tense, sometimes tragic inner workings of the bonus scheme.
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