Walnut City Councilman Thomas King is a recent President of the SGVCOG and, as a man of conscience who takes his responsibilities seriously, concerned about what is going on at this quasi-governmental organization. So much so that he has taken on both Conway and those who do his bidding at the SGVCOG. On March 1st he wrote a letter to each of the representatives of the 31 cities that comprise "The COG." It is a ringing condemnation of some of the practices there. We are reprinting a portion of his letter here. Then we will discuss how Conway and his people have reacted to such criticism.
The San Gabriel Valley Council of Governments (COG) recently received the final report of an "Organizational Management Audit" from a management consultant firm. While it covers a number of topics, the primary motivation for the study was to address improper practices cited by a Caltran's audit, the most significant of which was a conflict of interest with the COG's long term contracted management firm, Arroyo Associates, Inc. This was the second time a Caltrans audit found a conflict of interest with Arroyo Associates at COG.
The conflict of interest that California Department of Transportation (Caltrans) discovered at the SGVCOG is as follows. Nick Conway, the guy who runs the place, owns Arroyo Associates. A company that handles various managerial aspects for the COG on a contract basis. The Caltrans accusation being that Conway, who as its Executive Director is in charge of allocating COG moneys, funneled what was in this case state government funds to a company that he controls, thus personally profiting from the exchange. A very serious matter.
It is important to note that under a pending budget revision for the current fiscal year Arroyo Associates will be paid almost $750,000 for the management of the COG and associated activities. The actual costs attributed to Arroyo are always a bit hard to pin down accurately because numbers seem to regularly change, but proposed for the 2011/2012 fiscal year they amount to management fees of almost $430,000 and grant and special project fees of over $320,000.
In addition to these annual costs, the COG and not Arroyo Associates, have incurred the following additional expenses in connection with the two recent Caltrans audits, approximately:
COG Payment to Arroyo Associates for Audit Related Costs ....... $72,000
SCAG/Caltrans Payment Reduction from Audit OWP Program ... $65,000
Legal Costs Associated with First Caltrans Audit ..................... $110,000
To Date Legal Costs Associated with Second Caltrans Audit ...... $72,800
Response Expenses for Second Caltrans Audit ........................... $23,800
Organizational Review Resulting from Second Audit .................. $20,000
COG Share of Reimbursement for Second Caltrans Audit .......... $36,900
Total ...................................................................................... $400,500
So who do all these costs fall upon? Who is it that is feeling some of the effects of the Caltrans audits into this rather obvious conflict of interest involving COG's Executive Director and a management company that he controls? The 31 dues paying membership cities of the SGVCOG, places like Sierra Madre.
All of this money is coming from the cities of the San Gabriel Valley who are struggling to balance their budgets in these tight economic times.
So how has Nick Conway reacted to this kind of criticism from an elected official who until recently was President of the SGVCOG? He has proposed a revamping of that organization's Code of Conduct that would include the power to purge from the SGVCOG anyone who dares to challenge his authority. Here is an email I received from Tom King last Friday.
As you know I have been critical of the SGVCOG client relationship with Mr. Nick Conway. Mr. Conway has twice been found to be in a conflict of interest by audits conducted by the California Department of Transportation. In addition, Conway has presented grants to be adopted by the SGVCOG Governing Board in which it appears he has a fiduciary interest. In my view this could violate Section 1090 of the Government Code as well as the Code of Federal Regulations.
As you have apparently discovered, Mr. Conway has caused the creation of a government sponsored homeless program, which ultimately paid rent to his own company.
More than a year has gone by and I have written to all of the governing board members, as well as the executive director board members of the SGVCOG leadership. No meaningful progress has been initiated to date to address these concerns. The risk to all SGVCOG cities continues.
To the contrary, Conway is proposing changes to the SGVCOG code of conduct to silence any meaningful discussion of his mismanagement of the SGVCOG. I suggest you read the last item. Basically it says that if you promote a position contrary to the governing board's wishes you can get booted out of the organization. Reading into his proposed rules on communication, I would not be able to even reference myself as a SGVCOG president.
The document that Tom King is referring to can be accessed by clicking here and scrolling down to the section numbered 10. Here under "Code of Conduct" you will find new restrictions upon members designed to stifle criticism of Nick Conway, and purge anyone from the San Gabriel Valley Council of Governments membership rolls that dares to challenge the authority of its Executive Director. Who, by the way, is a contracted employee of the elected officials that supposedly run the place. People who could soon be prohibited from publicly critiquing his job in that office should the members vote for it. This, along with the fact that much of the money spent by the SGVCOG comes from governmental agencies using our tax money, creates a very bizarre situation.
3.10 Board members will respect the authority of the Director and will provide instruction and direction only to the Director.
3.12 Members shall refrain from abusive conduct, personal charges or verbal attacks upon the character, the motives, ethics or morals of other members of the Council of Governments or staff of the COG.
3.13 Board members shall refrain from using Board meetings or regulation approval processes to advance a personal agenda.
4.4 Members will refrain from engaging in activities that undermine or are in conflict with the adopted position or directive of the COG Governing Board.
4.6 When presenting their individual opinions and positions on matters which may come before the COG or on matters already decided by the COG, members shall explicitly state they do not represent the COG, nor will they allow such an inference.
7.1 Governing Board members have the responsibility to intervene when actions of the members that appear to be in violation of the Code of Ethics and Conduct are brought to their attention.
7.2 Failure to comply with these Ethical Standards may result in sanctions prescribed in the by-laws of the COG including censorship and removal from the Board or Committee.
7.3 In the event that a Governing Board member violates this Code of Ethics and Conduct (sic), the President of the Governing Board, when directed by the Board, may contact the Mayor and City Council from the Agency represented to request that the member be removed from his or her position.
What all of this appears to be is an attempt by Nick Conway, a contract employee of the SGVCOG hired to manage the organization, to silence the elected officials who govern it. I am not sure there has ever been anything quite like this before. For a hired individual running an organization that specializes in regional planning initiatives and running campaigns to recycle batteries, these would be rather extraordinary powers.
And describing any elected official who criticizes Nick Conway, as SGVCOG Executive Director a contracted employee, as being a Code of Ethics violator, is quite a twist.
As a member of the SGVCOG, Sierra Madre continues to pay money to these people. And as such is responsible for what goes on there in the eyes of those governmental organizations that funnel money through it. Should the Caltrans audits, or any future such embarrassment, lead to sanctions at the COG, we, along with the other cities that comprise this organization, could be left holding the bag.
Of course, should the Councilmember we send to the SGVCOG as our representative bring such a thing up, that individual could be banned from the organization for "ethics violations." Apparently protecting our interests is soon to be prohibited behavior at the SGVCOG.