There is a major scandal brewing at what Nancy Walsh likes to refer to as "The Cog." You know, the place that she informed us a week or so ago was having some sort of "internal conflict?" Well, that must be the civil way of phrasing it. Or perhaps it comes from the desire not to discuss the difficulties going on at our local 31 city so-called "regional government" in front of the hoi polloi. After all, the G4 City Council has some pretty strong ties there, and the last thing they'd want to do is invite the likes of us into what they might feel is a private conversation. The rumors of corruption there being none of our business.
And God bless us all, the bad news keeps piling up for the San Gabriel Valley Council of Governments. This is some serious stuff, with the makings of a true rip roaring scandal. With perp walks and everything. And I don't think we have done this story much justice here at The Tattler. Even though we've been griping about The COG for the last three years.
So today we're going to examine this matter a little more thoroughly. With the goal of asking if it is really a good idea for us to keep pumping our tax money into so ethically challenged an organization. That perhaps we should just do the right thing and get out.
The Pasadena Star News has run a series of articles on the SGVCOG Scandal, all written by staff writer Daniel Tedford. Who in my humble opinion should be considered for some sort of an award for his work here. By date, here is how these articles break down:
#1) Caltrans audit questions management practices of San Gabriel Valley Council of Governments (May 4) - A Caltrans audit alleges the San Gabriel Valley Council of Governments mismanaged a $245,130 Gold Line grant and improperly awarded contracts for consulting work. The COG is a joint powers authority of which 31 cities, three county supervisors and three water agencies are members. Its mission is to address issues that affect the entire San Gabriel Valley and give the region a greater voice in federal, state and county government.
Caltrans auditors also allege the COG, and its executive director Nick Conway, practiced poor bookkeeping, made overpayments, created overlapping billing times, and produced deviations from contracts.
Auditors also claimed Conway has a conflict of interest because his company, Arroyo Associates Inc., received a contract to act as staff for the COG. "By acting as the Executive Director ... the owner and President of (Arroyo) was making management decisions for SGVCOG that result in financial compensation (to Arroyo), and in turn, resulted in financial compensation to the Executive Director as the owner and President of (Arroyo)," auditors wrote.
That is quite a nifty operation Conway appears to have had going on here. You can't help but wonder if this is the only time such personally beneficial deals involving public money have been made at The COG. Are we talking exception or rule here? A question that just might get answered should the fellow discussed in the next article gets involved.
#2) D.A. receives complaint regarding COG's handling of Gold Line grant (May 5) - A prosecutor charged with rooting out public corruption said Thursday his office has received a complaint about the San Gabriel Valley Council of Governments. The complaint, which is under review, comes just days after Caltrans released a scathing audit of the agency. The 19-page audit alleges the Council of Governments (COG) and its executive director Nick Conway mismanaged a quarter-million dollar Gold Line grant.
At its heart, the current Caltrans audit alleges the COG mismanaged a $245,130 Gold Line grant and improperly awarded contracts for consulting work ... Caltrans auditors claimed Conway and the COG practiced poor bookkeeping, made overpayments, created overlapping billing times, and produced deviations from contracts. Additionally it implied that Conway has a conflict of interest as executive director because his company, Arroyo Associates, supplies the COG's staff.
So let's see if we have this straight. Nick Conway, who runs The COG, has a little side operation called Arroyo Associates. Which Nick hired to perform staff functions at the SGVCOG. And because of this nifty little arrangement Caltrans thinks Nick took some of their quarter million dollars and funneled it into his own backroom operation? Sweet!
So how do the folks at SGVCOG react to all this? It would appear that their lawyer has instructed them to dummy up about it.
#3) San Gabriel Valley Council of Government board members are closed lipped on Caltrans audit (May 11) - San Gabriel Valley Council of Government executive board members met behind closed doors on Wednesday to discuss a critical audit of the agency by Caltrans. While some board members walked out of the meeting visibly upset, no one talked about what was said in the small Alhambra conference room.
"Everything is confidential," said Monrovia Councilwoman Mary Ann Lutz, who is chairwoman of COG's Energy, Environment, and Natural Resources Committee. Lutz said a formal response will be made at a later date and otherwise had no comment on the scathing audit.
Caltrans 19-page audit alleges the COG and its executive director Nick Conway mismanaged a $250,000 grant for the Gold Line between 2006 and 2008. The audit also outlined Caltrans' belief that Conway has a conflict of interest because COG contracts his company, Arroyo Associates, to work as COG's paid staff.
As Gilman so eloquently pointed out, when a taxpayer supported organization gets caught with its ethical pants down, "the goings-on of our business are not confidential." But apparently those living behind The COG walls have been so entitled for so long, perhaps they really do believe that a corruption investigation is nobody else's business but their own. Which I guess means that they could be in for a rude surprise before too much longer.
And how are the member cities of The COG taking all of this bad news? If Baldwin Park is any indication, some are seriously thinking of getting out.
#4) Stay or go: Baldwin Park officials debate whether to stick with COG following Caltrans suit (May 16) - The City Council is considering withdrawing from the San Gabriel Valley Council of Governments in response to a scathing audit of the regional organization by Caltrans, officials said. The council is expected to air their concerns about the Caltrans audit at a council meeting Wednesday.
The audit alleges COG mismanaged a transportation grant and that COG's executive director Nick Conway has a conflict of interest as the organization's head administrator. The agency is demanding COG pay it back $250,000.
Councilman Ricardo Pacheco plans to ask the council to consider stepping down from COG until the audit issue is settled. "I don't think the city should be involved with any of these issues going on," Pacheco said. "I think because of the legal issues that could possibly come out, just to protect the city, it would be best to not be involved."
Now I would hope that members of our City Council would also consider discussing the issue of our continued membership in the San Gabriel Valley Council of Governments. I mean, how embarrassing would it be if the D.A. starts putting some of these characters in cuffs and walks them around in front of the TV cameras? Is that the kind of organization Sierra Madre should to be paying dues money? This question should at least be put on the agenda for future discussion.
And what is the vibe at the SGVCOG itself? It looks like they have lawyered up and are talking amongst themselves exclusively.
#5) Two-hour COG closed-session meeting ends with no action on Caltrans audit (May 20) - Board members with the San Gabriel Valley Council of Governments met behind closed doors for more than two hours on Thursday to a scathing Caltrans audit of the organization's management of a quarter-million dollar Gold Line grant.
Despite the marathon closed-session meeting, no action was reported once the regular meeting of the Council of Governments (COG) began except to say the organization anticipated to have a response to Caltrans within 30 to 90 days.
In fact, board members generally declined comment on the meeting and the audit, saying they decided the COG attorney, Richard Jones, would be the only one to speak on the matter.
When the members of an organization, faced with serious legal issues, band together behind a lawyer and refuse to speak with anyone about anything pertaining to the situation at hand, you have to figure they are concerned about certain - and possibly unpleasant - consequences. In other words (and to use the cliche'), they have circled the wagons.
The timing of this last Pasadena Star News article probably couldn't have been timed more poorly. At least from the SGVCOG's perspective. Especially with cities suffering budget constraints due to hard times, along with certain misgivings about the organization itself because of all the scandal news.
#6) SGV Council of Governments' dues surpass those of others; officials plan to review costs (May 28) - Member cities of the San Gabriel Valley Council of Governments generally pay thousands more in annual dues than other similar organizations, documents show.
San Gabriel Valley Council of Governments cities pay about $15,000 to $30,000 in membership fees. For example, Glendora pays $20,849, while larger cities like Pasadena and El Monte pay $30,000 each.
Yet, Southern California cities that belong to other councils of governments pay less. Anaheim, with a population of 336,265, pays $11,626.81 to belong to the 33-member Orange County Council of Governments. In the 25-member San Bernardino Association of Governments (SANBAG), the county of San Bernardino pays the highest dues, just $15,867.
I have to assume that there is some real value to be had from belonging to regional organizations such as The COG. Cities banding together to use their combined weight when negotiating with Sacramento being the most commonly cited one. The inclusion of three water districts and all that entails being another. But why would belonging to the SGVCOG be worth so much more to its 31 member cities? To the point that each could pay up to twice as much to belong to it?
There could be a couple of reasons. One is that an organization run by someone who would hire his own staffing company to perform certain duties might not find itself being pressured by management to exercise the kinds of business efficiencies similar organizations practice.
Then there are the legal bills associated with the Caltrans situation. I am sure the SGVCOG's attorney, Richard Jones by name, does not come cheaply. Which does bring up the irony of taxpayers and cities having to pay the legal expenses of a governmental entity that has very possibly ripped them off. Both of their rights and money.
A condition that we might also see happening now in Sierra Madre.