One year after it began in secret, an internal investigation of Proposition R and the Southwestern College Education Foundation made public this last week revealed some bombshells about the Foundation, but little new evidence of construction corruption.
The review, first reported in The Sun last March, was authorized to investigate the procurement process and the rewarding of contracts for Prop R construction projects, as well as questions surrounding SWC Foundation fundraising and expenditures. The final results of the review were sent to the office of San Diego County District Attorney Bonnie Dumanis one day earlier to be used in her ongoing investigation of corruption at SWC and the Sweetwater Union High School District. SWC has been working cooperatively with the D.A. since January 2011 soon after a new majority took control of the governing board.
“We need to take a new look at Proposition R,” said Norma Hernandez, governing board president. “This is part of our commitment to ensure the public’s money is used most appropriately and effectively to achieve our goals of educational excellence, institutional integrity and transparency.”
Prop R concerns have been a major focus of this governing board since it was seated in December 2010. Last September, construction management firm Echo Pacific was terminated. In January the board voted to sever all relationships with the BCA architecture firm and Seville Construction Services.
Superintendent Dr. Melinda Nish, who started at SWC in January, said the board would make corrections as needed.
“The college and its governing board acted in a thorough and responsive manner as soon as they became aware of problems,” she said. “Our goal is to exceed compliance standards. We are using this challenge as an opportunity to reshape ourselves and realize a new standard of transparent decision-making and institutional integrity.”
The investigation looked at Prop R procurement and contracting practices for fiscal years 2008-09 and 2009-10. An accompanying analysis made seven recommendations for the school to follow (see sidebar) as well as a 20-step action plan to help accomplish those recommendations.
“It was shocking,” said Humberto Peraza, who was appointed to the board in August 2011. “That’s not the way to do business. There were a lot of eyebrows raised. There was shock all the way through this, even up until the last day.”
But to many, the most surprising part of the report was the lack of surprise regarding Prop R scandals, which have been thoroughly covered by the news media and a year-long San Diego Country District Attorney investigation. One new piece of information involved Nicholas Alioto, former vice president of business and finance, who experienced a bit of “life in the fast lane” when BCA President Paul Bunton arranged a limousine outing to the May 23, 2010 Eagles concert at Cricket Amphitheater. This trip, which included tickets to the concert and an expensive dinner, was attended by Bunton, Alioto, former SWC facilities director John Wilson, former Seville project manager Henry Amigable and his wife, Angela.
Amigable was charged with two felonies in January as part of the District Attorney’s Sweetwater corruption case.
Another revelation was that Alioto, who agreed to be interviewed by Seo, claimed that in meeting with representatives of these firms, he attempted to “leverage the final firms against each other in cost negotiations,” which he claimed could have lowered project prices. Alioto was discovered to have raised prices in 2010 when he unilaterally awarded Echo Pacific an additional $4 million of Prop R funds by increasing its contract from $55 million to $59 million.
Seo Consulting was hired independently by SWC outside counsel Dannis Woliver Kelley in April 2011 to perform the investigation and forensic audit. Seo interviewed representatives from Seville, BCA, Echo Pacific, Barnhart Balfour Beatty, and numerous people from SWC, including Alioto and Wilson. Notably absent from the list was former superintendent Raj K. Chopra. According to the final report, Chopra could not be located. His whereabouts remain unknown and all his telephone numbers have been disconnected. Chopra’s last verified sighting was in Northern California last spring where he was reportedly seeking another superintendency so he could become vested in California’s retirement system. He was not successful. Seo was also unable to speak with Amigable, who refused to cooperate with the investigation. Information related to Amigable was provided by Seville and Echo Pacific, where he has been employed.
Nish said she is confident the college now has a very complete overview of Prop R activities, illegal or otherwise.
“There may be some more details,” she said, “but I doubt there’s much more of a major story than what is in this review… We had a lack of transparency. We had a lack of good judgment. In fact, we often had poor judgment. We probably had some staff who were not experienced and prepared to handle this type of project. There may be further details about specifics, but the major problems, we know what they are.”
Board members made it clear, however, that they are prepared to investigate further, if necessary, and put everything into the open.
“This is an ongoing problem,” Nish said. “The internal analysis is done. This doesn’t mean our work is done. The review indicates there needs to be additional investigation or review internally… Part of our action plan is to report back to the governing board. That has been scheduled for October.”
Nish said the board had no interest in rushing things or settling for less.
“Our goal isn’t to reach a new level of compliance,” she said. “Our goal is to set a new standard.”