Alioto central character in Foundation investigation

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An independent investigation of the Southwestern College Educational Foundation has lifted the curtains on two years of secretive operations by a former vice president, including a mysterious 2010 that mixed fund raising for scholarships with multimillion dollar construction contracts, extravagant gifts and campaign contributions while banning all news media and cameras.

Forensic auditor Scott Seo compiled a 33-page report released to the public by the governing board this week. Much of the carefully-worded report centers on the activities of Nicholas Alioto, SWC’s former vice president of business affairs. Alioto was cited for “inappropriate” activities during his involvement in the planning and management of the 2010 “Havana Nights” gala at the Loews Coronado Resort, including multiple instances of conflict of interest. Alioto solicited sizable donations from future Proposition R contractors and other construction firms who had made bids for contracts.

“It was inappropriate for the Vice President of Business and Financial Affairs to serve in such a direct fundraising capacity for the 2010 Gala, especially considering his responsibilities in the Proposition R contractor selection process,” wrote Seo. “Some of the maximum sponsorships and significant auction prizes were awarded by Proposition R contractors who were already or would eventually be awarded contracts.”

Seo’s investigation had a long list of “concerns” and “inappropriate” behaviors related to Alioto. Among them: nearly $15,000 in uncollected pledges, poor accounting practices, appearances of possible influence peddling, conflicts of interest, lax internal controls, inappropriate involvement of companies bidding for construction and architectural contracts, overpayment of vendors and use of Proposition R funds to pay for Foundation activities.

“It is not unreasonable to suggest that a potential donor could have been compelled to make a donation based on a solicitation from Mr. Alioto if his/her firm was currently or could potentially be considered for a contract that was under control of Mr. Alioto and his responsibility as the Vice President of Business and Financial Affairs,” read the report.

Alioto was able to insinuate his way into Foundation affairs follow a spring 2008 reorganization of the college by former superintendent Raj K. Chopra and approved by a previous governing board. Chopra fired or transferred Foundation staff, including its director, and transferred control of the Foundation to his office. Gutted, the Foundation lay dormant for nearly two years. Chopra cancelled two of the organization’s annual galas and conducted little visible fund raising.

In 2010, with Proposition R contracts out to bid and a contentious governing board election looming in November, Chopra ordered the gala resurrected. The March event at the Loews Coronado was attended by several contractors involved in the San Diego Country District Attorney investigation, including Seville Construction, Echo Pacific and BCA Architects. Other contractors also bidding for Proposition R funds were solicited for contributions by Alioto. Echo Pacific was the winning bidder for a weekend of wine tasting and golf with Alioto at a Napa resort hotel. Representatives of Echo Pacific joined Alioto on the getaway and three weeks later were awarded a $4 million contract from Alioto which was approved by the board. Incumbent board members Terry Valladolid and Yolanda Salcido later received large campaign contributions from Echo Pacific. Valladolid and Salcido were staunch supporters of Chopra and Alioto.

Alioto’s home was raided by the San Diego County District Attorney in December along with those of Echo Pacific’s Henry Amigable, former SWC director of facilities John Wilson, and four Sweetwater Union High School District trustees. Amigable and three of the trustees have been charged with multiple felonies for bribery and influence peddling. Alioto and Wilson have yet to be charged. Investigators reported they were unable to find Chopra, who may have fled the country. The U.S. State Department has a mutual legal assistance agreement in place with India, Chopra’s native country. San Diego County District Attorney spokespersons were asked if Chopra could face extradition if charged with felonies, but they did not reply before deadline.

Seo, in his report, said he examined several aspects of Alioto’s involvement with the Foundation, including:

Uncollected pledges in excess of $15,000. When an independent auditor requested documents in an attempt to reconcile the discrepancy, Alioto was uncooperative and took nearly four months to respond. Seo wrote that there were also $3,000 in uncollected sponsorships and a $1,047 overpayment to one unidentified vendor.

Fellow Circle sponsorships. Seo wrote that “many of the firms who were awarded Proposition R contracts also contributed…maximum sponsorships” of $15,000. In total, Seo reported, more than $190,000 was pledged for these sponsorships. “To the extent that contributions were made in response to aggressive solicitations made by SWC officials who were in positions of awarding Proposition R contracts would have been inappropriate,” Seo concluded.

Alioto’s involvement. Seo said that Alioto’s active participation in the gala “could have the appearance of a potential conflict.” Seville Construction also participated in the planning of the gala and the 2010 Foundation golf tournament “with the full knowledge and possible direction of Alioto,” Seo concluded. “To the extent that Seville was compensated for these activities from Proposition R funds under their contract with SWC would be inappropriate,” wrote Seo.

Insufficient internal control. Seo agreed with the Foundations auditor that internal controls were lax following Chopra’s dismissal and reassignment of Foundation staff. Governing board member Dr. Jean Roesch, a staunch Chopra supporter, was the board’s liaison to the Foundation in 2010.

Angela Amigable. Seo expressed concern that Alioto hired Henry Amigable’s wife, Angela, to work on the gala and paid her $3,000 without a contract or agreement between her and the Foundation.

Seo concluded that Foundation operations improved substantially for the 2011 gala. Chopra resigned following the November 2010 election. The new board majority of Norma Hernandez, Tim Nader and Nick Aguilar directed Interim Superintendent Denise Whittaker to restore Foundation staff and remove Alioto from Foundation affairs. Alioto resigned in February 2011. Hernandez became the board’s Foundation liaison. Seo said the 2011 gala corrected the problems and was “well-organized and well-managed.”

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