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    Saturday, Nov. 8, 2008 | Agents from the FBI arrived at the headquarters of the Southeastern Economic Development Corp. on Imperial Avenue last month with a subpoena and took away several of the agency’s computers, SEDC board Chairman D. Cruz Gonzalez said Friday.

    Gonzalez wouldn’t say whose computers had been removed or how many computers were taken by the agents. The FBI kept the computers for “a couple of days” before returning them, he said.

    In August, in the wake of a bonus scandal at the public agency, two SEDC board members were questioned by FBI agents at their homes. Gonzalez and board member Rich Geisler said they were questioned about a clandestine system of bonuses former SEDC President Carolyn Y. Smith gave herself and her staff.

    Gonzalez said one of the agents who took away the computers two weeks ago was the same agent who questioned him in August.

    “They were very polite,” Gonzalez said of the agents. “We weren’t raided or anything.”

    The SEDC board terminated Smith in July after a voiceofsandiego.org investigation revealed that she had allocated more than $1 million in unbudgeted bonuses and extra compensation for herself and her staff without seeking the approval of the City Council or the SEDC board.


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    More than half of that money went to Smith and SEDC Finance Director Dante Dayacap, who both regularly received five-figure annual bonuses on top of their salaries.

    After the payments were revealed, Mayor Jerry Sanders and three City Council members called for Smith to resign immediately. Smith refused to resign but was removed by the SEDC board at a long, emotional board meeting in July at which several community members spoke in support of Smith.

    In September, a city-commissioned audit completed by Macias Consulting Group concluded that SEDC’s budget practices rose “to the level of fraud.” Following the audit’s release, the mayor asked District Attorney Bonnie Dumanis to investigate the agency and, he said, she told him she was looking into the matter. Sanders pointed out at the time that an auditor’s definition of fraud may be different from a criminal definition.

    SEDC is a nonprofit arm of the city of San Diego that uses tax money to revitalize southeastern San Diego through beautification projects and the subsidization of development.

    In the summer, City Attorney Mike Aguirre also briefly filed a civil lawsuit against Smith seeking to recoup more than $250,000 she was paid in the bonuses. Aguirre dropped that lawsuit when he heard Dumanis was looking at the case. He said he didn’t want to step on the district attorney’s toes or jeopardize any criminal investigation.

    Dumanis has since been silent on the matter. Her spokesmen have said they will not comment on a pending investigation.

    Smith eventually left SEDC in late September, two months after she was fired by her board. For those two months, she served as the agency’s president and worked at the SEDC offices.

    In addition to the bonus scandal, SEDC also faced scrutiny for the relationship between its former board chairman, Artie M. “Chip” Owen, and a developer with an SEDC contract. Aguirre has opined that Owen violated state conflict of interest laws by maintaining an ongoing financial relationship with the developer, Pacific Development Partners LLC, at the same time it was doing business with SEDC.

    Owen has since been replaced and the new SEDC board decided not to proceed with PDP on the Valencia Business Park project, putting the development project back out to bid.

    Please contact Will Carless directly at will.carless@voiceofsandiego.org with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.

      This article relates to: Government

      Written by Andrew Donohue

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