There's about $13 million in ineligible and "unsupported" community development block grant funds that passed through the hands of the Southeastern Economic Development Corporation (SEDC).

We already know that SEDC was generally the personal sandbox of fired SEDC executive Carolyn Smith, and that she's not worth a $100000 severance check... or at least there's one local judge who would prefer that SEDC not cut that check.

What we want to know is if she, or SEDC, or our strong mayor can cough up enough documentation for San Diego to avoid paying all of that $13 million back... expecially when that $13 million could have been spent on allowable fire protection before the next wildfire.

It's not happening.

According to William Anderson, the director of the San Diego City Planning & Community Inverstment Department, we deserve a waiver from the documentation requirements under federal laws and HUD regulations... well... because we meant well. Anderson's comments are contained in the December 30 HUD audit report that found SEDC was so laxly managed by the City of San Diego (mostly because the City was never informed by the City Redevelopment Agency of block grant funds being dispersed to SEDC) that SEDC staffers never had a clue that they were playing with federally-regulated funds.

BTW: The City Redevelopment Agency is just our San Diego City Council, renamed.

Anderson describes a situation here in San Diego not unlike that of the current federal government bailouts of financial institutions and major corporations, just with much smaller amounts of money: million$ instead of billion$... mainly a situation where one has to dig like a gopher to find any justification for anything done with public funds. Anderson stated that the use of community development block grant funds as incremental tax revenue before the tax revenue exists is a legitimate use of block grant money. The answer to that from HUD was generally "Fine. So justify it with documentation... while showing that the block grant funds were not used 'to obtain tax increment funds.' "

Wasn't Anderson describing some sort of Madoff-style Ponzi scheme, playing the feds against state tax officials?

The full HUD IG audit report: www.hud.gov/offices/oig/reports/files/ig0991005.pdf. Anderson's comments and HUD's analysis of those comments are in the appendices.

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