Tuesday, May 31, 2011

The SGVCOG Scandal: Should Sierra Madre Consider Getting Out?

"Pretty cool ... let somebody be the guy who awards contracts to his own company, all the while being paid hundreds of thousands in taxpayer dollars. Apparently, that guy would be the Executive Director of the COG? Then when asked by the public about the allegations our elected officials simply say, "Well, that is confidential." Sorry, but the goings-on of OUR business is NOT confidential." - Gilman

There is a major scandal brewing at what Nancy Walsh likes to refer to as "The Cog." You know, the place that she informed us a week or so ago was having some sort of "internal conflict?" Well, that must be the civil way of phrasing it. Or perhaps it comes from the desire not to discuss the difficulties going on at our local 31 city so-called "regional government" in front of the hoi polloi. After all, the G4 City Council has some pretty strong ties there, and the last thing they'd want to do is invite the likes of us into what they might feel is a private conversation. The rumors of corruption there being none of our business.

And God bless us all, the bad news keeps piling up for the San Gabriel Valley Council of Governments. This is some serious stuff, with the makings of a true rip roaring scandal. With perp walks and everything. And I don't think we have done this story much justice here at The Tattler. Even though we've been griping about The COG for the last three years.

So today we're going to examine this matter a little more thoroughly. With the goal of asking if it is really a good idea for us to keep pumping our tax money into so ethically challenged an organization. That perhaps we should just do the right thing and get out.

The Pasadena Star News has run a series of articles on the SGVCOG Scandal, all written by staff writer Daniel Tedford. Who in my humble opinion should be considered for some sort of an award for his work here. By date, here is how these articles break down:

#1) Caltrans audit questions management practices of San Gabriel Valley Council of Governments (May 4) - A Caltrans audit alleges the San Gabriel Valley Council of Governments mismanaged a $245,130 Gold Line grant and improperly awarded contracts for consulting work. The COG is a joint powers authority of which 31 cities, three county supervisors and three water agencies are members. Its mission is to address issues that affect the entire San Gabriel Valley and give the region a greater voice in federal, state and county government.

Caltrans auditors also allege the COG, and its executive director Nick Conway, practiced poor bookkeeping, made overpayments, created overlapping billing times, and produced deviations from contracts.

Auditors also claimed Conway has a conflict of interest because his company, Arroyo Associates Inc., received a contract to act as staff for the COG. "By acting as the Executive Director ... the owner and President of (Arroyo) was making management decisions for SGVCOG that result in financial compensation (to Arroyo), and in turn, resulted in financial compensation to the Executive Director as the owner and President of (Arroyo)," auditors wrote.

That is quite a nifty operation Conway appears to have had going on here. You can't help but wonder if this is the only time such personally beneficial deals involving public money have been made at The COG. Are we talking exception or rule here? A question that just might get answered should the fellow discussed in the next article gets involved.

#2) D.A. receives complaint regarding COG's handling of Gold Line grant (May 5) - A prosecutor charged with rooting out public corruption said Thursday his office has received a complaint about the San Gabriel Valley Council of Governments. The complaint, which is under review, comes just days after Caltrans released a scathing audit of the agency. The 19-page audit alleges the Council of Governments (COG) and its executive director Nick Conway mismanaged a quarter-million dollar Gold Line grant.

At its heart, the current Caltrans audit alleges the COG mismanaged a $245,130 Gold Line grant and improperly awarded contracts for consulting work ... Caltrans auditors claimed Conway and the COG practiced poor bookkeeping, made overpayments, created overlapping billing times, and produced deviations from contracts. Additionally it implied that Conway has a conflict of interest as executive director because his company, Arroyo Associates, supplies the COG's staff.

So let's see if we have this straight. Nick Conway, who runs The COG, has a little side operation called Arroyo Associates. Which Nick hired to perform staff functions at the SGVCOG. And because of this nifty little arrangement Caltrans thinks Nick took some of their quarter million dollars and funneled it into his own backroom operation? Sweet!

So how do the folks at SGVCOG react to all this? It would appear that their lawyer has instructed them to dummy up about it.

#3) San Gabriel Valley Council of Government board members are closed lipped on Caltrans audit (May 11) - San Gabriel Valley Council of Government executive board members met behind closed doors on Wednesday to discuss a critical audit of the agency by Caltrans. While some board members walked out of the meeting visibly upset, no one talked about what was said in the small Alhambra conference room.

"Everything is confidential," said Monrovia Councilwoman Mary Ann Lutz, who is chairwoman of COG's Energy, Environment, and Natural Resources Committee. Lutz said a formal response will be made at a later date and otherwise had no comment on the scathing audit.

Caltrans 19-page audit alleges the COG and its executive director Nick Conway mismanaged a $250,000 grant for the Gold Line between 2006 and 2008. The audit also outlined Caltrans' belief that Conway has a conflict of interest because COG contracts his company, Arroyo Associates, to work as COG's paid staff.

As Gilman so eloquently pointed out, when a taxpayer supported organization gets caught with its ethical pants down, "the goings-on of our business are not confidential." But apparently those living behind The COG walls have been so entitled for so long, perhaps they really do believe that a corruption investigation is nobody else's business but their own. Which I guess means that they could be in for a rude surprise before too much longer.

And how are the member cities of The COG taking all of this bad news? If Baldwin Park is any indication, some are seriously thinking of getting out.

#4) Stay or go: Baldwin Park officials debate whether to stick with COG following Caltrans suit (May 16) - The City Council is considering withdrawing from the San Gabriel Valley Council of Governments in response to a scathing audit of the regional organization by Caltrans, officials said. The council is expected to air their concerns about the Caltrans audit at a council meeting Wednesday.

The audit alleges COG mismanaged a transportation grant and that COG's executive director Nick Conway has a conflict of interest as the organization's head administrator. The agency is demanding COG pay it back $250,000.

Councilman Ricardo Pacheco plans to ask the council to consider stepping down from COG until the audit issue is settled. "I don't think the city should be involved with any of these issues going on," Pacheco said. "I think because of the legal issues that could possibly come out, just to protect the city, it would be best to not be involved."

Now I would hope that members of our City Council would also consider discussing the issue of our continued membership in the San Gabriel Valley Council of Governments. I mean, how embarrassing would it be if the D.A. starts putting some of these characters in cuffs and walks them around in front of the TV cameras? Is that the kind of organization Sierra Madre should to be paying dues money? This question should at least be put on the agenda for future discussion.

And what is the vibe at the SGVCOG itself? It looks like they have lawyered up and are talking amongst themselves exclusively.

#5) Two-hour COG closed-session meeting ends with no action on Caltrans audit (May 20) - Board members with the San Gabriel Valley Council of Governments met behind closed doors for more than two hours on Thursday to a scathing Caltrans audit of the organization's management of a quarter-million dollar Gold Line grant.

Despite the marathon closed-session meeting, no action was reported once the regular meeting of the Council of Governments (COG) began except to say the organization anticipated to have a response to Caltrans within 30 to 90 days.

In fact, board members generally declined comment on the meeting and the audit, saying they decided the COG attorney, Richard Jones, would be the only one to speak on the matter.

When the members of an organization, faced with serious legal issues, band together behind a lawyer and refuse to speak with anyone about anything pertaining to the situation at hand, you have to figure they are concerned about certain - and possibly unpleasant - consequences. In other words (and to use the cliche'), they have circled the wagons.

The timing of this last Pasadena Star News article probably couldn't have been timed more poorly. At least from the SGVCOG's perspective. Especially with cities suffering budget constraints due to hard times, along with certain misgivings about the organization itself because of all the scandal news.

#6) SGV Council of Governments' dues surpass those of others; officials plan to review costs (May 28) - Member cities of the San Gabriel Valley Council of Governments generally pay thousands more in annual dues than other similar organizations, documents show.

San Gabriel Valley Council of Governments cities pay about $15,000 to $30,000 in membership fees. For example, Glendora pays $20,849, while larger cities like Pasadena and El Monte pay $30,000 each.

Yet, Southern California cities that belong to other councils of governments pay less. Anaheim, with a population of 336,265, pays $11,626.81 to belong to the 33-member Orange County Council of Governments. In the 25-member San Bernardino Association of Governments (SANBAG), the county of San Bernardino pays the highest dues, just $15,867.

I have to assume that there is some real value to be had from belonging to regional organizations such as The COG. Cities banding together to use their combined weight when negotiating with Sacramento being the most commonly cited one. The inclusion of three water districts and all that entails being another. But why would belonging to the SGVCOG be worth so much more to its 31 member cities? To the point that each could pay up to twice as much to belong to it?

There could be a couple of reasons. One is that an organization run by someone who would hire his own staffing company to perform certain duties might not find itself being pressured by management to exercise the kinds of business efficiencies similar organizations practice.

Then there are the legal bills associated with the Caltrans situation. I am sure the SGVCOG's attorney, Richard Jones by name, does not come cheaply. Which does bring up the irony of taxpayers and cities having to pay the legal expenses of a governmental entity that has very possibly ripped them off. Both of their rights and money.

A condition that we might also see happening now in Sierra Madre.



  1. Nick Conway must be one smooth talker.
    His charm might not work as well on a judge.

  2. "...the organization anticipated to have a response to Caltrans within 30 to 90 days" because it needs a month or three so Conway can get his con on, and his closest supporters cam get out of town.

  3. Don Bacon & EggsMay 31, 2011 at 7:22 AM

    That is some discipline they have at The COG. The consigliere tells the membership to clam up, and they clam up. Like the glory days of the Mafia.

  4. It is my understanding that Caltrans has got some problems of its own, so for it to be morally outraged?

  5. Maybe it's a turf war.

  6. Should be stunned, but.....May 31, 2011 at 7:43 AM

    these scandals cease to amaze me.
    Sierra Madre needs to get out of all these lousy "organizations" that are corrupt to the core.
    Why should we pay dues or even bother at all with them.
    These days there will be no "free" money coming to Sierra Madre,
    damn it, City Council, get us out of the COG and SCAG and the CRA. I demand it as a tax payer!

  7. This is the kind of organization that Mosca and Buchanan love.

    Remember Joe thinks that he represents 31 little cities in the San Gabriel Valley - that's how he answered Heather Allen when she asked him if he spoke for small towns.

  8. Isn't SGVCOG in on the big water main the district is bringing into town? COG could be selling numbers on Sierra Madre Boulevard street corners and John Buchanan would still turn a blind eye.

  9. Off topic a little, but Patch has a feature article up this morning about a rum and gin sale at Happys. Hard hitting reporting from AOL. I wonder, are those articles presented as news, or does the retailer pay for them?

  10. The only member of the City Council that will bring The COG
    Scandal up is MaryAnn. The other 4 are totally lacking in

  11. Not much in commonMay 31, 2011 at 8:10 AM

    One problem with the Cog concept, even without the corruption, is that despite the efforts of tools like Mosca and Buchanan, Sierra Madre is unique in the San Gabriel Valley, and should remain so. I've lived in this valley for 60 years, and I don't get a Sierra Madre vibe from Baldwin Park, Monterey Park, Alhambra, San Gabriel, Temple City, El Monte, etc, etc, etc, and even a city like Monrovia, which I consider livable, is on an entirely different scale.

  12. Are the members of the COG board protected the way our city officials are? That means that no matter how bad the decision of an individual or individuals may be, no matter how destructive, and/or corrupt, the larger body takes the hit. Is that why the Coggies can meet in closed sessions?

  13. When Joe Mosca was running for reelection he spoke often about working with other cities to help "solve our problems together." What he was speaking about was COG and its 31 cities. Shrewd judge of character, that Joe.

  14. Conway used a position of trust to pay himself out of public money? Pretty much how things are dome around here, right?

  15. NO different than PUSD/ Selinski and their missing money.

    NO different than Sierra Madre and their bonds and CRA money.

    NO different than when ballot boxes were tampered with many years ago during a City Council election.

    What will happen to those involved?
    ....NOTHING...this is America.

  16. Joe and John's response.

    "So what is wrong with with what we see as a little breach of ethics and alleged outright lying? We see nothing wrong with COG and misrepresenting the facts and playing favorites or conning the public with a shell game."

    Is it any wonder that our two wonder boy corporate dweebs align themselves with corrupt organizations or those that want to double the size of our population.

    Given the fact that both Joe and John are caught in multiple lies, misdirections and cover ups, they'll defend COG until the bitter end.

  17. what Joe Mosca fails to realize that our problem in Sierra Madre is him, John Buchanan and their supporters and allies who want to strip Sierra Madre's history and turn it into a pile of condos, empty storefronts and 21,000 residents crowded into our little 3 square miles.

    we will be better off when Mosca and Buchanan are off the council and gone from influence - they haven't done anyting of signficance other than pile drive a corporate culture of development (surprise, both of their employers benefit from their actions....) and driving Sierra Madre into bankruptcy

    all we need is more bonds and debt - thinks Buchanan....is anybody surprised that he and Mosca don't deal in the real world of common sense?

  18. council observerMay 31, 2011 at 9:46 AM

    Should Sierra Madre consider getting out of SGVCOG?
    Will Sierra Madre consider getting out of COG?
    Not a chance.
    Hooking up with the larger social entities is what J, J & J live for.
    Joe does it to feed his ego
    John Bonds does it to maintain his illusion of leadership
    and for Josh, it's business.

  19. It appears that the corruption is just about everywhere. I wonder, is it coming out now because of some reason? Why are things like this coming out now? Lack of easy money is causing these govt organizations to turn on each other?

  20. Good point 9:55. Kind of like "Hey, if you're stealing it, there won't be enough left for me to steal."
    Sometimes the widespread lack of just plain honesty makes me despair.

  21. Corruption gets what it wants. Public funds for private and corporate benefit, liberated through local government malfeasance and dishonesty. The system is so well entrenched, that Local Governments don't even fear prosecution because of the webs they have constructed using their own lawyers for protection and immunity.

    Managers, Councils, Lawyers, Consultants, Developers, Real Estate Companies, and well healed businesses with State cover operate almost at will, with few or no consequences.

    Our Free Press and a few courageous individuals stand it seems alone in demanding standards; ethical and moral from public officials. What a concept!! What a mess!!

    Sierra Madre...Get out now...Stand alone...We can do it ourselves without Mafia Style Corruption.

  22. This issue with SGVCOG is just a bug bite that keeps on iching, if you keep scratching, will get bigger and ichyer. When it comes to the huge sums of money that were being thrown around, it's no wonder that temptation would start to get the better of these groups.It is only a matter of time. Public/private partnerships breed corruption, because they ARE partners.
    These relationships will always breed this sort
    of greed.
    Just because it's government run, it doesn't mean it's somehow O.K. Close down the CRA now!

  23. We just went over 36,000 hits for the month of May. That is the 31 day month total as opposed to the 30 day hit track total to the right. Which isn't too bad, either. That is about 3.4 hits for every man, woman and child in the City of Sierra Madre. You have to wonder if we haven't reached the saturation point.

  24. Organizations like COG exist for two reasons. The first is so they can spend tax money on crap, and the other is to coerce high density Sacramento-style develop net into towns that don't want it. We don't need anything they have to offer. Let's cut our losses and get out.

  25. Now you know why Buchanan refused to appoint MaryAnn to COG despite her very reasoned appeal.

  26. From the SGVCOG site Organization Chart (undated)COG Appointments:

    E. Joffee, Sierra Madre is listed as Lower LA and SGV Rivers & Mtns Conservancy appointee.

  27. i dunno moderator, you're still lagging

    beth buck has over 1 million hits in a half a month with her downtown dirt site, according to her

    but she did hear voices.....

  28. will John Buchanan just please go away?

    and take Joe Mosca with him?


  29. 11:00 a.m., I think the Downtown Dirt website might have had a ton of traffic at first, because the porn community may have been misled by the title.
    It's that search engine thing again, the one Patch is so dependent on.
    Like maybe today, people all over the country looking online for sales of rum and gin might be directed to our little patch.

  30. The rum and gin sale at Happys, are those mixed drinks in a can or straight bottles? I have my inlaws over and I want to make sure they sleep as much as possible. They are very partial to cans.

  31. Why don't you post that on AOL Sierra Madre, 11:21. They'd be thrilled to have the comment.

  32. I would 11:24, but I suspect that mere hours after posting my e-mail box would be flooded with rum and vodka offers.

  33. E Joffee was, but is no more, a representative as you have to be an elected official from a city in the Rivers and Mountains Conservancy region to hold such a position. The poor girl was not re-elected so lost her seat there, too. If you go to the website for the Rivers and Mountains Conservancy you can find the current board listing.

  34. Are they unique hits from different IP addresses as in static ip's meaning you truly do have 30K+ hits from 30K+ different computers(users), more likely you are receiving multiple hits from the same users that have their internet config setup for dynamic IP addresses...each setup will give you variant IP addresses but the origins are vastly different giving you misleading numbers ...so what is it Johnny boy?....oh, that's right, you don't know.

  35. Established to win transportation infrastructure funding for its constituents, the San Gabriel Valley Council of Governments (SGVCOG) has continued to expand its policy agenda, creating dynamic partnerships between city and county governments, the private sector, and local non-profit organizations as a result. In the following TPR interview, SGVCOG Executive Director Nicholas Conway makes the case for the SGVCOG as the model of regional governance in Southern California.

    From The Planning Report, the Insiders Guide to Managed Growth
    August 2010
    SGVCOG Promotes Enlightened Regional Agenda

  36. The Number BunnyMay 31, 2011 at 1:37 PM

    Cerf - you mean to say that the same person might be looking at The Tattler more than once a month, and there aren't 30,000 computers in Sierra Madre?

    These are harsh facts, if true.

  37. Judging by the math, it seems obvious that V. Cerf is an accountant at The Cog.

  38. Hey V Cerf, how do you do this?

    "internet config setup for dynamic IP addresses."

  39. Ooooooooooh... jealously rears its ugly head. Patchy? Someone has tutored the moron in the proper vocabulary? The 4:00 am poster? Maybe the Weakly?

  40. Several times a month I bring in cookies so that everyone in my office will continue to log onto The Tattler from home, their iPad, the office computer, and their Blackberry at least twice a day. Our office has 47 people. If each of the 47 people also asks their spouses, significant others, and running partners to log in, how many oatmeal brownie bites will I need to bake?

  41. Just like AOL, The Tattler pays money for the hits it gets. But one pays a bit more than the other. Tune in tomorrow and we will share the comparative math. If you are fascinated by statistics and Internet configuration set ups as they relate to ISPs, well then you will be in hog heaven.

  42. Conway claims that SGVCOG is "the model of regional governance in Southern California?" Does that mean all the COGs are crooked?

  43. I have only two comments:

    1) If it's a joint powers arrangement, it might have some difficulty about withdrawing. The Joing Powers Agreement will govern that.

    2) This shows how useful and informational an audit can be. We'd be arguing about this all day long if the audit hadn't highlighted the conflict of interest issue.

  44. Tattler, you're dreaming. Up on Patch right now they have an article about Halftime Cuts over there in Hastings Ranch. You can get 20% off on your first haircut there, too. Then go over to Happys to get your rum and celebrate that new 'do.

    You know you can't touch this kind of stuff.

  45. Nick Conway's slivered out of the last Caltrans audit unscathed.. well not really. $70,000 richer. The first audit uncovering Conway's incompetency was done years ago - costing the COG not only $90,000 BUT Nick then turned around and sued the COG because he felt his reputation was hurt.. another $70,000 and an apology for his troubles. New day, new findings, same crook..

  46. It is nice to see that the public purse is in the hands of such exemplary civic servants.

  47. Never heard of Nick Conway. Sounds like he figured out how not to work legitimatly but as a conduit to deliver money.......for a price. Being in government does pay. See Nick!

  48. As a Public Service Annoucement center the Tattler works by far the best so here goes:

    I am putting together a group of Returned Peace Corps Volunteers to walk together in the Fourth of July Parade to commemorate the 50th anniversary of the Peace Corps

    ...so if you are a RPCV in the nearby, or not so nearby, area and want to participate, please call me: 626-355-9350.

  49. What a great idea!

  50. So you are working as a unit manager for a major company....they conduct an audit and find that you have mismanaged a significant project and that you have been using a company, which you own, to provide services (at a significant cost).........so what happens?

    Well over at the SGVCOG the answer is NOTHING!
    Instead the audit is kept from the public and all discussions are held behind closed doors??

    The most shocking part for me is that over 30 cities are represented and NOT ONE elected official has stood up and said this is wrong and that meeting in secret violates the law....a sad statement as to the poor quality of elected officials we have representing us.

  51. Most local politicians have the backbone of a worm. I can't think of a more reprehensible bunch of people.

  52. The cost of doing the cities business, so the COG member's might say if you corner one of them alone!

    But if you look through the cities budgets you might find a notation of several thousands dollars wasted at these secret retreats and meetings.

    No wonder cities are going broke supporting these politicans only to further their own political careers and goals, not for the cities interests at all.


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