Feb. 22, 2012 | Now that the Alameda County District Attorney has charged Nanette Dillard and Paul Daniels, the husband and wife duo alleged to have bilked the county agency they ultimately ran into the ground, there are far more broader question involvings their wrong doing and the knowledge of it by a handful of officials from numerous cities and the president of the Board of Supervisors.
Alameda County District Nancy O'Malley Tuesday charged Dillard and Daniels with felony counts of grand theft and conspiracy to commit a crime. Dillard faces an additional felony charge of crime by a public officer. "When public officials misappropriate and mismanage funds, not only do they break the law, but they also violate the public’s trust in our agencies," said O'Malley.
Dillard was the executive director of the Associated Community Action Program from 2004 to 2011. Her husband, Daniels, held the position of the agency's grant manager. The program headquartered in Hayward was created in 1972 under a joint powers agreement among every city in the county, excluding Oakland and Berkeley. Its primary function was to eradicate poverty in the county and help the poor and recently incarcerated amass savings and equity once they got back on their feet. It also groomed the underprivileged for one day owning their businesses.
In the aftermath of complaints last February by ACAP's 30 employees over bounced paychecks, the county was alerted to alleged mismanagement of the agency by Dillard. Shortly later, she was terminated and the 13-member governing board made up of elected council members and mayors from each city council, including the Board of Supervisors voted to dismantle the agency and begin the process of winding down its operations.
The complaint charges Dillard and Daniels falsified ACAP's financial statements when applying for federal grants. The additional funds were then allegedly used for their own personal benefit. The D.A. accuses the couple of spending ACAP funds on spa treatments and using ACAP personnel for work at their home, in addition, to work at the residence of Dillard's brother.
All of the complaints listed in D.A.'s complaint were public knowledge, including the use of illegitimate bank transfers at a Citibank in the East Bay. Salacious accounts by former ACAP employees alleging the use of staff at the home of Dillard and Daniels were also lodged during numerous ACAP Governing Board meetings last February. So why did it take so long to charge them with a crime?
Dillard sued the same Governing Board last summer alleging, among other things, she was wrongfully terminated. Court filings show Dillard says the governing board violated the Brown Act when it moved to terminate her employment in a closed session meeting last Feb. 2. She also claims the board has not responded to numerous public records requests, even though one report appears to have been written by Dillard herself.
The span of allegations against Dillard and Daniels possibly leading to the downfall of an important county program reserved for the poorest among us is obviously deplorable, but clearly there is more going on than meets the eye.
Because of the unique genesis of ACAP's formation 30 years ago under a joint powers agreement, this potential scandal is wide-ranging and could affect elected officials in nearly every city in Alameda County. Nearly every single member of the ACAP Governing Board has been able to sidestep their role in possibly turning a blind eye to Dillard's alleged criminal enterprise. For two years, the governing board failed to consistent have enough members show up to achieve a quorum of seven.
Even when serious trouble over ACAP's finances began to surface in early 2011, there seemed to be little impetus for some members to pay closer attention. As reported in The Citizen last year, attendance records showed only 4 of the 13 members had perfect attendance records. Others continued a shocking pattern of nonattendance even as meetings occurred with far greater frequency to handle the program's violently shaking foundation.
A representative from the City of Alameda listed by the governing board's records as Mayor Marie Gilmore missed all four meetings in February 2011. The late Fremont Mayor Bob Wasserman missed three of four during the same fateful month that ultimately ended ACAP as a resource for county residents.
While the Dillard's may have been plundering a county agency for their personal benefit, 13 elected officials appear to have been negligent for, at minimum, actually showing up to meetings. Some county officials now claim their poor attendance records were actually the doing of Dillard. They allege she conspired to falsely notify certain members not to attend scheduled meetings due to a lack of a quorum when one would have otherwise been attained.
A report compiled by the Alameda County Auditor covering the situation at ACAP originally due in the spring of 2011 did not arrive until much later in the fall. Although the audit found little wrongdoing on the county's side, it did find a mandated yearly audit of ACAP had not been performed by the county.
As ACAP employees railed against Dillard over missing and bounced paychecks last February, the governing board inexplicably approved giving the Dillards $20,000 in pay following their termination. San Leandro Councilwoman Diana Souza, who to her misfortune, only became the chair of the ACAP governing board a few weeks earlier, asked the Board of Supervisors for a loan to cover payroll. Initially, they balked at the request before agreeing to a lower amount.
The road to ACAP's downfall was set, but not before several governing members including Souza, Albany Councilman Robert Lieber and then-Emeryville Mayor Nora Davis exhibited oddly dismissive comments during their subsequent meetings. Some of the early meetings in Hayward took the tone of 13 members doing their best to absolve themselves of responsibilities with ACAP. Albany, Emeryville and Union City openly talked of rebellion.
One member, though, took the lead during two of these emergency meeting. It was likely because it appeared his own board would ultimately be the agency charged with cleaning up the mess at ACAP.
What did Alameda County Supervisor Nate Miley know about ACAP and Dillard's dealings in its demise? As the ACAP Governing Board jettisoned Dillard and Daniels at the same time claiming they had no inkling the program of which they were overseeing was nearing implosion, Miley was saying otherwise. At an ACAP meeting on Feb. 24, 2011, Miley told the board he was aware of the agencies financial problems for months. Before the newly-appointed counsel suggested Miley was offering "too much attention" during the meeting, he told the group he attempted to help Dillard with the agencies problems. Miley never elaborated on how or what kind of assistance he offered Dillard.
During a board of supervisors meeting a week later, Miley took blame for the ACAP Governing Board's dissonance. “I accept responsibility for the lack of sufficient oversight. It could have kept ACAP alive.” Of course, ACAP is nearly dissolved. Its functions now spread all over the county's social service apparatus. That is clear. What is not is why did Miley know about the impending doom at ACAP before everyone else did and why didn't he stop it, especially if the alleged wrongdoing is now the subject of a criminal complaint?