20 Years of Voice Impact: The Investigation into SEDC

20 Years of Impact: For our 20th anniversary, we’re revisiting our 20 stories that have had the biggest impact in the past two decades. Read more here.

We were not experts in investigative reporting when Voice of San Diego launched 20 years ago. We had some experience and we had mentors. We were experienced enough to do a good job, in other words, but not experienced enough to know what, if anything, we had to fear. 

And that turned out to be really valuable.  

Within a year, we had built enough trust with sources to get handed the tip that would change San Diego and the course of our news organization forever. And we learned the most important lesson we would carry forward for the next 19 years: Sometimes the first thing you publish in a major investigation is meaningless and has no impact.  

That was the case with our work investigating the Southeastern Economic Development Corp., or SEDC. A City Hall source had given us a tip that officials at the agency, responsible for spurring and subsidizing construction in a long-underserved community, had been involved in self-dealing, conflicts of interest and other messes. Powerful pillars of the community led SEDC and it felt, to many, like an untouchable entity.  

We were too oblivious to know that. We poked around and finally published a story in 2006 about how buyers of for-sale, affordable housing units the agency had subsidized were able to flip the properties for profits. An 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. 

That story was shocking to us, but didn’t make much of an impact on its own, besides leading us to other stories. We reported about more potential conflicts of interest and then discovered something strange.  

The city’s Independent Budget Analyst found SEDC was doing a 30-percent increase in salaries for employees and it “appears to be excessive.”  Smith said it was incorrect and the increase was only 4 percent. We did our own analysis and it still didn’t make sense.

Then we figured it out: On July 9, 2008, we published what remains our most impactful 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,” wrote Will Carless.  

The day the story published, the mayor sent a list of questions to the agency and demanded answers. Within a few months, the FBI had raided their offices.  

In 2011, then-State Attorney General Kamala Harris charged Smith and Dante Dayacap with embezzlement.  

It took those three years to finally get the details on how it all happened and they were shocking. An agency dedicated to help a community recover after years of neglect had itself been plundered.  

The big story caught the attention of The New York Times and, in November of 2008, the Times published a front-page story about our organization and its impact. That story brought us national attention and led to grants and growth that sustain us to this day. In fact, shortly after that Times story ran, we launched the Morning Report, still our most valued product.  

But perhaps a more important impact to us of the investigation was the lesson that sometimes the first story of an investigation doesn’t have any impact. Sometimes you just have to keep digging. And that lesson turned into dozens of other major stories we will be reviewing all year.