The Volunteers of America Southwest building in San Diego / Photo by Adriana Heldiz

The Department of Veterans Affairs is pulling almost $2 million worth of grants to the Volunteers of America Southwest following fraud allegations reported earlier this month by Voice of San Diego. 

In a letter obtained by Will Huntsberry, the VA said it has already identified $87,000 in fraudulent spending by the nonprofit, money that was supposed to help homeless veterans. 

According to multiple witnesses and a San Diego County audit, Volunteers of America Southwest’s chief financial officer funneled money into companies controlled by his sisters-in-law, who also worked for the charitable organization, and in some cases they charged far above market-rate for goods and services. 

Two other employees said they tried to blow the whistle and were fired for it. 

The VA also said the charitable organization did not inform officials of the county’s audit or a lawsuit filed by the would-be whistleblowers, as required by its contract. The VA’s funding represents about 8 percent of the charitable organization’s total. 

The Volunteers of America network has provided literacy programs, food and housing, and treatment for addiction for much of its history. 

Housing Commission Broker Invested in Hotel Before Negotiating Purchase

Last year, the San Diego Housing Commission hired a real estate broker to help find and negotiate the purchase of hotels that would be used to house the homeless during the pandemic.

But according to an internal Housing Commission document reviewed by Voice of San Diego, sometime between being hired and closing the deal, the broker purchased 40,000 shares in a company that owned one of the hotels the commission ultimately bought.

It is, Andrew Keatts reports, a potential criminal violation that further complicates a hotel purchase that had already been scrutinized as too expensive. 

In a memo sent to the Housing Commission board and City Council, a Housing Commission lawyer wrote that the broker’s contract capped his pay at $250,000 but he managed to negotiate a payout nearly twice that amount in the end. The lawyer also estimated that the broker stood to make several hundred thousand dollars off the stock he’d quietly bought.

He denied wrongdoing and said the memo contained inaccuracies but didn’t elaborate.

The Union-Tribune reported earlier this year that the Housing Commission’s purchase of two hotels were the highest per-room costs of any hotels sold in the county last year. In response, the Housing Commission said the valuations had been supported by independent appraisals. 

But that’s not all … 

In a follow-up, Keatts writes that two members of the board overseeing the Housing Commission disavowed the commission’s response to his original story. A spokesperson declined to answer questions before the original story ran, then defended the sale. 

Scott Marshall, argued that the sole issue on the table was whether the broker would be required to reimburse the commission for his payout from the sale. The chair of the Housing Commission and another board member disagreed. 

Keatts and Scott Lewis shared a few more thoughts on the Housing Commission mess in the Politics Report and a bunch of other topics. 

The president of the San Diego Unified School District implied that City Councilwoman Monica Montgomery’s recent open letter, laying out concerns over Lincoln High School, were out of line. Patrick Soon-Shiong, the owner of the Los Angeles Times and Union-Tribune, resisted pressure to block the sale of Tribune Publishing to a hedge fund known for doing what hedge funds do — ruthlessly gut the companies they buy, in this case a group of major metropolitan newspapers. 

Reminder, y’all … The Politics Report is no longer free. Only Voice of San Diego members who’ve already subscribed will continue to get it every Saturday. Donate to keep receiving the hottest Gen X and End of History-type takes on local policy and policymakers. It’s like being magically teleported to a rave in the 1990s! 

These Bills Have Been Killed

Last week saw one of the biggest days in the California Legislature — the day when a select group of lawmakers, including Assemblywoman Lorena Gonzalez, sifted through the “suspense file.” That’s where bills with a price tag of $250,000 get extra scrutiny. Some survive, some don’t. Sara Libby has a roundup in the Sacramento Report.

Jesse Marx and Lisa Halverstadt also took a closer look at the city and county of San Diego’s lobbying activities. Yes, it’s a thing: governments hire people to influence other governments. And their priorities change with new administrations and officials.

Earlier this year, for instance, the Board of Supervisors rewrote its legislative policies to include principles like the rights of workers to organize. When pushing for the changes, Chairman Nathan Fletcher said the previous policies were “outdated” and didn’t reflect the ideologies of the new Democrat-majority in power. 

In Other News

The Morning Report was written by Jesse Marx, and edited by Sara Libby.

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