San Diego — Almost six years ago, on July 30, 2001, the San Diego city council, led by Mayor Dick Murphy, voted to give $1 million to the San Diego Library Foundation, a small nonprofit group incorporated only three months earlier. The foundation's president was Jim Dawe, a well-known local lobbyist whose clients included National City's McMillin Communities, controversial redeveloper of the old Naval Training Center site. Among members of the foundation's board was Mike Madigan, the ex-Pardee executive who had gone on to become the city's ballpark development "czar" and later a developer and real estate speculator in his own right. He was later to face a variety of conflict-of-interest-related charges, agreeing in 2003 to pay a $1000 fine for failure to properly disclose his downtown real estate assets. The group's "executive director" was James Lewis Bowers, a fundraising professional and La Jolla socialite who had also been on the board of the San Diego Symphony and owned a small piece of uptown's posh Laurel restaurant.

The million-dollar check from the city was supposed to be "seed" money to encourage local fat cats to come up with millions of dollars more in donations to build a new downtown library on a vacant city-owned block near the baseball stadium. "As evidence of the city's good-faith desire to secure a world-class Library System and to enable the Library Foundation to begin operations, the City agrees to provide $1 million to the Library Foundation," said the council resolution appropriating the money with very few other restrictions, according to a "memorandum of understanding" accompanying the deal. "This is going to send a message to the philanthropic community that we're serious," city councilman Jim Madaffer, a big library backer, told the Union-Tribune the day before the vote. "We'd like to raise $40 million or $50 million."

Alas, to this day the foundation has been unable to wheedle anything close to that kind of cash out of the city's monied and corporate classes. As the years passed, the predicted construction cost has burgeoned to $185 million, requiring the foundation to adjust its fundraising goal upward to $70 million. But so far it has managed to scrape together only $3 million in large pledges, one of $2 million from Union-Tribune owner David Copley and another of $1 million from the San Diego Foundation's Hervey Family Fund. Current foundation vice chairman Mel Katz has said that it was a mistake to set goals in the past and last month declined to tell the U-T when the group might hit $50 million.

But what about that original $1 million from San Diego taxpayers? Documents unearthed in 2004 through a request to the city under the state's public records act showed that much of the cash was spent on overhead. According to a "preliminary plan" attached to a November 7, 2002, letter from foundation president Dawe to then-deputy city manager Bruce Herring, $195,000 was earmarked for "Salaries and Benefits (Executive Director/Administrative Asst.)," $70,000 for "consulting services," $160,000 for "Publications and Public Relations," including $45,000 for "Agency services," $50,000 for "Banners," and $25,000 for "video," $25,000 for "organizational meetings," $15,000 for "office equipment and furnishings," and $15,000 for "board related activities." From January 1, 2003, through March 31, 2003, according to the records, the foundation spent $72,269.10 on "charitable expenses." By the end of December 2003, the fund balance was down to $564,187.99.

Today, with the downtown library still a shimmering mirage, a long-overdue investigation is finally in progress. In a July 9 presentation to the city council's audit committee, the city's interim internal auditor revealed that the library foundation was being audited "as the result of a hotline complaint." The audit will "evaluate the internal controls and accountability for library donations" and "determine compliance with the terms of the [memorandum of understanding] between the City and the Library Foundation." According to the presentation, "Audit recommendations will be made to help strengthen internal controls over library donations."