In our distinguished daily paper today (Sept. 6), a letter by Mel Shapiro points out several facts regarding the Southeastern Economic Development Corporation (SEDC) self-dealing bonus approvals by outgoing president Carolyn Smith for herself and other staffers.

From Shapiro's letter: "A lot has been written about the unauthorized bonuses received and given by Carolyn Smith... [b]ut were they really unauthorized? How many people saw them but didn't question them?

"The SEDC budget for fiscal 2008 shows $114,000 budgeted for 'overtime, temporary, bonus.' The budget does not show who would get a bonus. None of the City Council has asked this important question. Did they actually read SEDC's budget? I have my doubts. But the council approved it."

Shapiro, a former accountant and interested taxpayer, then described how SEDC receives at least part of its funding: "Every month, SEDC sends a 'Request for Payment' to the City Comptroller Department for reimbursement for administrative expenses, including payroll. The 'request' lists each employee's biweekly salary. So there was nothing clandestine about Carolyn Smith's bonuses. ... [sample detail of budgeted salary for given two-week periods plus the amount of salary overpaid past the budget] ... The Comptroller's Department, which is under Mayor Sander's jurisdiction, dutifully reimbursed SEDC for those salaries, apparently with no questions asked."


First of all, I have to agree with Shapiro that the auditing firm Macias Gini & O'Connell was quite possibly overpaid, given its failure to discover the budget-bonus discrepancies before they were uncovered by voiceofsandiego.org earlier this year.

At the same time, I have to withhold any judgment that the bonuses paid were not clandestine.

If they were truly done in sunshine, so that everybody could see what was going on, then the entry cited by Shapiro above, "overtime, temporary, bonus", was just plain wrong.

As a salaried president of any corporation, what was Smith doing by approving any kind of "overtime" bonus for herself?

If it wasn't an overtime bonus, then did she actually divert funds from the named overtime-bonus budget line item from other employees to her own benefit and enrichment?

Further, without seeing the documentation obtained by Shapiro, I would have to say that unless the monthly administrative reimbursement request from SEDC to the City Comptroller's Department actually contained an item-by-item breakdown of each SEDC check paid out with enough details to figure out why it was being paid, the Comptroller was stuck in the position of being unable to challenge a lump sum reimbursement because the self-dealing bonuses were "hiding" in the total request amount for each employee every month this went on.

I make this assumption based on the Independent Budget Analyst's repeated requests back in 2006 that city redevelopment agencies submit budgets and budget changes with enough details for auditors and the public to figure out just what was going on. (See http://www.sandiegoreader.com/weblogs...)

As it was, voiceofsandiego.org didn't have anything to say until after it had compared SEDC's city-approved budget with the tax information SEDC had sent to the State of California.

Now, how many of us ordinary taxpayers would have thought to do that?

Clandestine, indeed... as befitting Enron by the Sea.


One thing I'm not certain that Shapiro has seen is that part of SEDC's 2006-07 revised budget that actually breaks down the proposed salaries to be paid. To me, what's most interesting is the listing of job titles:

One president

One vice president of operations

One director of finance

One director of corporate communications

One manager of projects/development

One senior planner

One projects coordinator

One executive assistant

One assistant projects coordinator

One accounting technician

One administrative support coordinator

One assistant community development coordinator

One receptionist

One communications coordinator (half time)

One messenger clerk (half time)

There seems to be a lot of chiefs but few indians in this tribe.

Of the 15 positions listed, two are listed as being related to finance and accounting.

It would be interesting how the outgoing president, the director of finance, or even the accounting technician can explain why the Independent Budget Analyst's warning of inadequate budget and budget change detail was never been addressed by SEDC to the point where auditor Macias Gini & O'Connell could even figure out what was going on.

As I said before, I don't know that a proper audit has ever been done at SEDC... internally, there doesn't seem to be enough qualified people to do one without the internal auditors auditing their own work.

Any accountants want to offer up any comment on the ethics of that in a public benefit corporation?

Comments

a2zresource Sept. 9, 2008 @ 1:27 p.m.

I am contemptuous of myself for not having discovered stevia earlier.

Right now, I'm darn close to my old Army weight. Since I started using stevia, a cup of coffee is worth a scant teaspoon of sugar, mostly for that unique sugar flavor. Back when a cup of joe was worth three heaping tablespoons to me, I weighed 255 pounds.

Anything that can get a no-exercising keyboarder like me to drop over 50 pounds without dieting or otherwise changing my eating habits can't be a bad thing!

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jerome Sept. 8, 2008 @ 11:28 a.m.

ETHICS? I DOUBT THAT REALITY! INTEGRITY OBVIOUSLY MISSING FROM MS SMITH'S PERSONALITY! THE COOKIE JAR HAS BEEN TOO CLOSE FOR HER FOR TOO LONG!!

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jerome Sept. 9, 2008 @ 11:22 a.m.

TO A2ZRESOURSE: your contempt of people who bring your faults to the surface shows ,maybe you could quit the stevia and use sugar, save for all the cookie crumbs you been eating. and yes i agree you are a "dolt"

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a2zresource Sept. 8, 2008 @ 1:58 p.m.

Responding to #2:

It would seem that any corporate president who spends more than a decade in office has too much time on her or his hands... or are those cookie crumbs?

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a2zresource Sept. 9, 2008 @ 9:02 a.m.

Response to off-line comment:

A former client for accounting tutoring referred to me as a "dolt" for concluding the "overtime, temporary, bonus" budget line was a single item. Her interpretation was that it was three items reported as a single statistic.

I thanked her for making my point as I put another drop of stevia in my coffee.

It's hard for outsiders to analyze the performance efficiency of a firm when too many different activities are summarized by a single statistic. A good accountant or accounting technician writes financial reports that are useful for analysis, not less useful or in this case, useless for revealing what went on (and still goes on?) at SEDC.

When I asked her how any outsider could make any judgment about SEDC's management of temporary employees, or its payment of overtime, or what percentage of the budget was purely for bonuses from the "overtime, temporary, bonus" number reported according to Shapiro, she just shook her head, laughed and said "... but you're still a dolt!"

(Sigh)

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jerome Sept. 9, 2008 @ 7:42 p.m.

Energy Metabolism: Large amounts of stevioside can potentially interfere with absorption of carbohydrates in animals. It can further disrupt the metabolising/conversion of food into energy. Cancer: Steviol has successfully been converted into a mutagenic compound, which may promote cancer by causing genetic mutation of a cell’s DNA. The catch? Scientists don’t yet know if this will happen in human cells.

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jerome Sept. 9, 2008 @ 7:49 p.m.

more FDA info for over twenty years, the United States FDA (Food and Drug Administration) has derided stevia as an unsafe food additive. Their vehement opposal to its importation almost suggests that stevia is some sort of narcotic. The FDA has in the past even implemented seizure campaigns to stop the import of stevia into the U.S. Under legislation passed in 1994, stevia manufacturers were eventually given the right to market stevia as a dietary supplement.

EXERCISE and eat right it works !!!!!!! AND THAT FOR SURE IS NOT A BAD THING!

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a2zresource Sept. 9, 2008 @ 11 p.m.

Regarding #6:

Apparently, mutagenic properties were exhibited in vitro only, not in actual living creatures, even when marinated. Of all of the scientific studies I've researched on it, either stevia is one of the least cancer-causing substances known to the human race, or empirically it causes problems only among silicon-based lifeforms. If I turn into a Petri dish, I'll worry about that then!

Regarding #7:

Apparently, the FDA won't give up the name of the sugar company possibly located somewhere between California & Hawaii that claimed Celestial Seasonings was adulterating its tea products with stevia, and down came the black helicopters.

In Japan, it happens to be quite popular as a sweetener... and Japan also has a much lower rate of coronary artery disease and diabetes. Of course, this might also relate to their much higher usage of fast internet providers...

In Central America, several millennia of stevia usage has enhanced their regional resistance to the United Fruit Company.

Generally, the anti-stevia helicopters only show up if an American distributor refers to it as a "sweetener" or "sweetened with".

No more exercise for me. I did enough pushups in the infantry to last a lifetime. (Drill Sergeant: "You don't like this fort? Then push it away! Push it away!!!") Besides, my cardiologist would be greatly annoyed if I suddenly dropped dead from fatigue, especially after I participated in that VA heart failure study...

As for narcotic qualities... hmmm... maybe we need another ballot initiative to start another state-federal battle over another plant?!? Wait... am I having another flashback? No, it's just my nephew hitting the degauss button on the monitor.

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a2zresource Sept. 12, 2008 @ 2:14 p.m.

UPDATE: VOSD has an article on at least two of the above positions left unfilled, where the unpaid salaries became the apparent source of the presidential and other employee bonuses:

http://www.voiceofsandiego.org/articles/2008/09/12/news/02sedcmoney091208.txt

From the appearence of things, Carolyn Smith is SEDC... darn near all of it.

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