(Mod: The Star News posted an article on their site Aug 17 entitled "San Gabriel Valley COG distances itself from director charged with four felony counts" (click here). In this article they discussed a letter sent out to the remaining 30 SGVCOG cities detailing the alleged criminal behavior of the COG's former Executive Director, Nick Conway. The research behind this letter, written by Gil Aguirre and Kelly Aviles, is very thorough, and the evidence devastating. The cities contemplating leaving the COG now have all the information they need to pack up and get out should they choose. Many are giving it some very serious thought.)
Re: Membership in the San Gabriel Valley Council of Governments
Dear Mayor, City Council Members, City Manager, and City Attorney:
I believe that most public officials are committed to serving the best interests of the community and the public they represent. Further, most of the agencies within the San Gabriel Valley work hard to maintain a reputation for operating in an open and transparent fashion. However, your agency’s membership in the San Gabriel Valley Council of Governments (SGVCOG) has put those admirable goals at risk.
The SGVCOG was formed to further the collective interests of the entire region, an important mission. However, under the direction of Executive Director Nicholas Conway and his management company, Arroyo Associates, Inc., the SGVCOG has ignored its obligations to the public and disregarded numerous laws, which exist to protect the public. Mr. Conway has not only used his position as Executive Director for his own self‐enrichment but has fostered an atmosphere of cronyism and secrecy within the organization, which often seems to operate more like a secret society than a public agency.
Recently, after conducting a lengthy and thorough investigation, the District Attorney arrested Mr. Conway on four felony charges. In addition, the SGVCOG recently settled litigation that was brought against the organization for numerous violations of important public transparency laws. This settlement includes the SGVCOG admission of multiple violations and a stipulated Court Order, violation of which could lead to possible criminal prosecution, should similar Brown Act violations be committed again.
Yet, in numerous reports given by SGVCOG delegates to their respective City Councils, these facts have gone completely unmentioned. Unfortunately, it appears as if many of the City delegates are simply not paying any attention, thereby contributing to the total lack of oversight which has made these abuses possible.
As public officials, you are ultimately responsible for the agency you have created. The SGVCOG delegate from your city receives compensation for their participation in the SGVCOG and owes us, the members of the public, a duty to ensure that we are protected from those who would seek to misuse public funds to their benefit and our detriment. Further, we expect that the public’s business be conducted in an open, ethical, and transparent fashion.
A range of additional issues continue to plague the SGVCOG, just some of which include:
In contradiction to Government Code Sections 6500, et seq., the financial oversight of all SGVCOG finances has been placed in the hands of an unlicensed CPA, who was never bonded.
A budget shell game, where Mr. Conway has presented different budgets to different committees, in violation of the SGVCOG by‐laws.
The recent settlement admitting to multiple violations of the state transparency laws and requiring the SGVCOG payment of $50,000.00 for my attorney’s fees, as required under the law. This payment does not include any additional attorney fees charged by Jones & Mayer, the SGVCOG legal counsel. The funding of this settlement will either require a reduction in the SGVCOG operating budget or additional financial contributions by the member agencies.
The most recent Caltrans Audit, which again concluded that there has been mismanagement and improper billing of grant funds, conflicts of interest by Mr. Conway, and inadequate financial oversight, resulting in the repayment of much of those funds and the agency being designated as “high risk” for future funding.
The proposed split from ACE, in an apparent attempt to protect and insulate ACE from the myriad of problems facing the SGVCOG. The latest proposal calls for the SGVCOG legal counsel to spearhead this process and for ACE to fund the cost of these proposed legal fees to the estimated tune of $100,000.00‐$200,000.00.
Attempts to censor and silence delegates who have spoken out or question the SGVCOG operations under Mr. Conway. After first attempting to implement a “code of conduct” which faltered, these officials have now brought forth a proposal to alter the agency by‐laws so that two outspoken critics will be removed from their role on the Executive Committee.
As if these issues were not enough cause for concern, Mr. Conway has now submitted a letter to the SGVCOG, claiming that he is entitled to having his criminal defense costs paid for by the agency under an Errors and Omissions insurance policy ‐ a remarkable assertion considering his contractual obligation to refrain from“...any other activities that could be considered to be a real or apparent conflict of interest under any federal or state statutes or regulations.”
Further, while Mr. Conway has technically been removed as the SGVCOG Executive Director, he continues to have full and unrestricted access to all staff – after all, the staff is employed by Arroyo Associates, Inc., not the SGVCOG and the SGVCOG and Arroyo Associates, Inc., offices are one in the same. Additionally, he continues to receive payment in full under the 4 separate management contracts he holds with the SGVCOG – including those at issue in the felony charges. In June alone, Arroyo Associates, Inc. was paid some $66,000. This is especially egregious, given that the SGVCOG has had to incur the additional expense of hiring an interim Executive Director. In response to objection regarding the continued payments under these agreements, the suggested solution has been to hire the Arroyo employees as employees of the SGVCOG. Rewarding the company responsible for the SGVCOG’s mismanagement, by hiring them as employees, is an outrageous and irresponsible solution to the SGVCOG’s continued problems.
I respectfully request, on behalf of the public, that you reconsider your membership and funding of this agency with our tax dollars, unless and until there are wide‐ranging, comprehensive changes made to this organization. At a minimum, if your delegate has held their position with the SGVCOG for a prolonged period, replacement of your current City delegate is warranted, as these abuses have been allowed to occur under their watch. To do nothing is to put your agency’s reputation and the good work that your agency has tried to accomplish in jeopardy. The upcoming SGVCOG Governing Board meeting is this Thursday, August 16th. Please urge your delegate to speak up for the public and end this pattern of mismanagement.
Should the Cities and the SGVCOG fail to take action to protect our legal rights and interests, I will look at all available actions to remedy this negligence and outrageous misuse of public funds.
I am enclosing a copy of the recent litigation settlement, as well as my complaint to the District Attorney which addresses some of the issues related to the mismanagement of the SGVCOG. Supporting documentation, including the JPA agreement, By‐Laws, Conflict of Interest Code, and the contracts between the SGVCOG and Arroyo Associates, Inc., can be viewed and downloaded by clicking here.
If you have any further questions or would like to know more about the SGVCOG’s activities, please do not hesitate to contact me or my attorney, Kelly Aviles.
Kelly Aviles, Esq.