Return To Sender

Re “Big Brother will be watching” (“Under the Radar,” March 18). I am sending you two pages from Ben Hueso’s campaign disclosure report, filed with the secretary of state and San Diego registrar of voters on March 22. Page 5 shows the receipt of the Anthem Blue Cross check on March 10, 2010, and the “Payments Made” section on page 23 shows the check was returned.

We therefore kindly ask for a retraction.

  • Paola Avila
  • huesoforassembly.com

Matt Potter replies: The date on the refund check, a copy of which was provided this week by Avila, is March 17, the date the story appeared in the paper and on the Reader website.

Wrong, All Wrong

As a native San Diegan and a law-abiding citizen of Italian descent, I was appalled and utterly disappointed by the failure of your publication to verify any of the false claims made in Bauder’s articles and the reckless innuendo of ties by myself to organized crime (“Too Much Conflict,” March 4, and “What a Tangled Web,” March 18, “City Lights”). This is a blatant attack on me, my family, my community, and the Little Italy district and consistent with similar articles run previously by the Reader that alleged that being Italian in San Diego equals corruption.

Upon being contacted by Mr. Bauder before the first of the two articles was published, my wife and I presented substantial evidence to Mr. Bauder that demonstrated the falsity of the claims in Mr. Scott Kessler’s lawsuit — yet Mr. Bauder intentionally chose to ignore the documents, disregard the truth, and maliciously repeated the false claims, knowing that his words would damage my reputation in the community. I hereby demand that you retract those false and malicious articles and print the retraction in an equally prominent position in the next issue of the Reader.

Mr. Bauder’s articles repeated the claim that I have:

• engaged in violations of the State law governing conflicts of interest,

• improperly obtained contracts from the North Bay Association, and also

• implied that I have falsified study results in a conspiracy with Mr. Joseph Mannino.

Bauder also repeats false claims that I improperly influenced the Mayor’s Office to terminate Mr. Kessler and that I even used my influence to persuade the district attorney, Bonnie Dumanis, to reject my prosecution against the recommendations of her subordinates. All of these claims are utterly false and baseless, and I believe that Mr. Bauder knew that when he repeated them. No one person in this city has the kind of influence or authority that Mr. Bauder claims I have.

New City America (NCA) is a professional corporation based in San Diego’s Little Italy and has formed 55 special benefit assessment districts nationwide since 1995. My company has formed more districts in San Diego, Los Angeles, San Francisco, and Oakland than any other company, as well as having extensive experience working on the East Coast. Although we have formed numerous special benefit districts, we are under contract to manage only four of them: one in Little Italy, one in Los Angeles, and two in Oakland.

In each case, our company was hired after a competitive bidding process. In no case was I a voting member of any board of directors in which NCA received a contract. We are proud that our work has transformed San Diego’s Little Italy into one of the most dynamic urban neighborhoods in the country today. This was not done via corruption and conflicts of interest; it was done through hard work, leadership of the Little Italy Association board of directors, and strong, broad-based community support.

First, it is important to address Mr. Bauder’s repetition of the false claim that I and my company have engaged in a violation of the State conflict-of-interest law. Mr. Kessler has been making this claim for years, and it is simply not true. I have undertaken extraordinary efforts to disprove it, but you must understand the entire process to recognize that there is no conflict of interest.

Process for Establishing Special Benefits Districts:

The City of San Diego and many other cities contract with the private consultants or consultant companies such as NCA regarding, first, the advisability of forming both business improvement districts and maintenance assessment districts within their respective cities. Pursuant to the terms of the contract entered into with the private consultant such as myself, the consultant is to informally serve a particular area to determine whether there is business or property-owner interest in the formation of a maintenance assessment district or business improvement district. Pursuant to the terms of the contract, if the consultant determines that there is significant interest in the formation of such a district, the consultant is further directed by the City to move to the formation stage of the contract.

To demonstrate support for a BID or maintenance assessment district, the consultant is required to write a management plan and have that plan endorsed by the advocate group of business or property owners. New City America, as the consultant, is then required to have its plan endorsed by the City of San Diego and then, once approved, circulate a petition of support demonstrating approval of the plan, its services, and assessments. Once the predetermined threshold of weighted or numerical petition support has been reached, New City America submits the petitions to the Office of Small Business or Economic Development Department for processing. The Office of Small Business or Economic Development Department then writes a staff report and submits it to the appropriate city council committee for review and approval.

The city council committee then submits that report and plan to the full city council for review and action. Once endorsed, the city council adopts a “Resolution of Intent” to form the district and mails out ballots to all affected business or property owners. This is a public hearing process conducted by the City Clerk’s Office in the City of San Diego. New City America has nothing to do with this statewide-determined public hearing process.

At the conclusion of the public hearing process, and conditional upon “weighted” support of the business or property owners, the city council may vote to levy an assessment on affected businesses or property owners to fund the special benefit services articulated in the management plan. The city clerk is in charge of tallying all returned ballots and making a report to the city council on the support or opposition from the mail balloting procedure -- New City America has nothing to do with this reporting process.

Historically, the vote sometimes disapproves of the formation of a district in California. In the event that the vote favors the formation of a district, City staff prepares a recommendation to the City approving the formation. After receipt of this report, the city council then independently votes to determine whether a maintenance assessment or business improvement district should be formed. Thus, as noted above, the ultimate decision as to the formation of a district lies with the city council and not with me or New City America.

There are numerous instances in which independent decision-making determines the advisability of the formation of such a district, including (1) the lack of interest by property owners, (2) a vote by concerned parties against formation of such a district, and (3) rejection by the city council. All of these situations involve independent objective criteria over which neither I nor New City America exercise specific control.

In the event that the city council passes a resolution for the formation of a maintenance assessment district or business improvement district, then the next step is for members of the newly formed district to create a nonprofit corporation for the management of the district. This independent nonprofit corporation (which I have never been a voting member of) then calls for the election of a board of directors, and the board of directors is charged, according to the bylaws of the district, with management of the corporation.

As noted previously, I did not sit on the board of directors of the North Bay Association or, for that matter, any district I have formed. I did not ever vote in connection with any issue presented to that board. The board of directors that is elected by the interested parties in the district operates the management of the corporation. The board then makes determinations with whom to enter into private contracts, subject to the approval of the City of San Diego. Thus, I was not sitting on the board, never determined the membership in the board, and never had any say in the vote by the board as to whether or not I should receive a contract.

Alleged Conflict of Interest and Attorney General’s Opinion:

Kessler first started claiming that this process violated the conflict-of-interest law only after having a personal disagreement with me, losing his position, and heatedly vowing to take vengeance against me. We sent Mr. Bauder a transcript of this threat, which he published, but made no connection that everything that followed that threat was, in fact, implementation of his goal to discredit me and my work. Immediately after this recorded claim of conflict of interest by Mr. Kessler, I made every effort to demonstrate that Kessler was wrong.

I contacted the City Ethics Commission and requested that they research and issue an opinion on this issue. They declined, advising me that their procedures did not contemplate such opinions.

I then contacted the district attorney prosecuting the pension fund conflict-of-interest case, Mr. Steve Robinson, and sought an opinion from their office evaluating the law, only again to be told that their office did not issue such opinions.

Finally, I contacted the State Attorney General’s Office and learned of a procedure to have someone evaluate my circumstances and render an opinion. Ultimately, in October 2005, after months of waiting, the Attorney General’s Office issued a written opinion concluding, contrary to Kessler’s, and later Detective Vile’s and Bauder’s, claims that there was NO CONFLICT OF INTEREST in how I was routinely and openly conducting my business affairs. The state attorney general is the constitutional officer designated to interpret state statutes. Section 1090, the conflict-of-interest law, is subject to interpretation by the state attorney general since it is state law. The City of San Diego does not have a higher standard for conflict of interest and uses Section 1090 in all of its dealings with private consultants or public officials. (A copy [of the attorney general’s opinion was provided], which Mr. Bauder apparently never bothered to read but mentioned only in passing.)

Notwithstanding this written opinion, Kessler and apparently Detective Vile, neither of whom are attorneys, continued to argue that the attorney general was wrong. The District Attorney’s Office did not pursue a criminal prosecution, not because of my claimed influence with Bonnie Dumanis, but rather because the attorney general proved that both Kessler and Vile were wrong! According to the head prosecutor in this state, I had committed no violation of the conflict-of-interest law. Bauder knew this but still chose to recklessly print these outdated and rejected claims that I had violated the law.

By the way, Bauder also knew about all of my efforts to dispel Kessler’s false claim by contacting every law enforcement agency I could think of, yet he once again chose to ignore all of these facts. I ask you, does contacting the Ethics Commission, the District Attorney’s Office, and the Attorney General’s Office sound like the actions of a corrupt businessman improperly using his influence to cover criminal conduct? Of course not. I and my company were totally open in every aspect of my business and continue to be.

Alleged “Influence”:

I would also like to correct the record about Bauder’s utterly false claims that I improperly influenced Bonnie Dumanis not to pursue my prosecution against "her subordinates' recommendation,” as claimed in your published articles. Bauder knew that this statement was false and included it maliciously to not only defame me but also the District Attorney’s Office. No subordinate of the District Attorney’s Office recommended my prosecution. This claim was fabricated by Mr. Bauder. To the contrary, my case was investigated, and once analyzed, no one in the DA’s office recommended prosecution because there was no conflict of interest.

Moreover, the San Diego Grand Jury investigated the circumstances and did not return any charges. Unfortunately, because these proceedings are secret by law, I can only prove this by the total absence of any charges brought against me. However, even Kessler himself confirmed that the grand jury was the body involved in the process.

During those proceedings, I, in fact, demanded that the proceedings be conducted by the Attorney General’s Office. Why would I possibly make such a demand if I intended to somehow improperly influence Bonnie Dumanis to reject my case as Bauder has claimed? Bauder was also advised of these facts but chose to ignore them for the more salacious reading implying some type of cover-up conspiracy to protect me. His innuendo and repetition of claims that he knew or should have known were false is contrary to the regimen for investigative journalism and just show his desire to intimate misconduct when none was present.

The article implies that since I gave a contribution to District Attorney Dumanis in 2004 that I control her actions. This is ridiculous, and no proof is offered to back this claim. Bauder does not mention that I also contributed to Mr. Aguirre’s 2004 campaign for city attorney.

Contracts from the North Bay Association:

Kessler’s claims that I somehow improperly acquired contracts from North Bay are equally erroneous and outright fabrications. All contracts that New City America had received in the City of San Diego from the North Bay Association or any other BID formation or management contract were required to be approved by (1) the City Manager’s Office (prior to the Strong Mayor), (2) the City Attorney’s Office, (3) the City Auditor’s Office, and (4) the Risk Management Department.

Mr. Kessler is very much aware that this is the process but has misled others by implying that contracts were simply handed out without procurement procedures. This is an outright lie.

The North Bay Association’s board of directors voted to enter into all of the contracts AFTER A NOTICED PUBLIC BIDDING PROCESS. In each case, New City America was the lowest qualified bidder and produced work product far beyond the minimum required in each scope of services. There is absolutely no truth that there was a quid pro quo in regard to the contracts between the North Bay Association and New City America and no evidence ever presented that would prove that an open bidding process was not used. It was for this reason that no charges were ever filed, contrary to what Bauder and Kessler allege. The City of San Diego would never have approved any of these contracts if they believed such a quid pro quo existed.

Bauder also chose to ignore all the evidence of the public meetings conducted by North Bay Association. He knew that there were published minutes of the meetings, which were readily available to him, which would reflect what really happened at the meetings, but he totally disregarded such documents in his zeal to print defamatory claims. These minutes conclusively prove that I never voted to give New City America any contracts, the true heart of the conflict-of-interest claim.

Aguirre’s Allegations:

Bauder failed to elaborate on the documents we sent to him satisfying the city attorney’s question of Marco Li Mandri’s title as president or chairman, explaining Robert’s Rules of Order, the structure for parliamentary law, that states the presiding officer is ordinarily called the chairman or the president -- and that does NOT mean he votes. To reiterate, I am not, nor have ever been, a voting member of the Little Italy Association board of directors. I have never made a motion, nor voted on an issue. If issues regarding the New City America contract were under review by the board, the board would go into executive session, consistent with the Brown Act, and staff, including myself, would leave the meeting. If Mr. Bauder had fact-checked, he would have found that there are at least 30 current and past board members that would attest to the validity of this statement. But it is clear that Mr. Bauder was not interested in presenting the truth, rather reiterating the fallacies concocted by a terminated and vengeful City employee.

Bauder once again failed to reference a document we sent to him from the city auditor John Torell, dated August 2006, and his finding that the Little Italy Association was operating consistent with auditing standards required by the City of San Diego, but that the Economic Development Department’s lack of written policies and procedures concerning the City’s perceived nature of its role in administering the operational and financial activities of the assessment districts could lead to inconsistent and inequitable dealings between the City and the districts. Perhaps the city auditor was taking note of Kessler’s disturbing preoccupation with me and weighing the facts against Kessler’s baseless allegations?

When I learned of the grand jury investigation, I specifically requested an opportunity to testify about any questions they had and clear my name. That never happened, namely because the grand jury rejected all of Kessler’s claimed misconduct out of hand, without ever thinking that it should hear from me. That ended any inquiry and, again, no charges were ever brought forth by this independent body.

Under Investigation:

Bauder consistently alleges that I am “under investigation.” There is no investigation because there is no case. It is Mr. Kessler who should be investigated for an abuse of power while in public office. Imagine the hundreds of hours and the financial resources spent since 2003 by numerous City department staff, SDPD, the FBI, state attorney general offices, and the district attorney and city attorney offices to pursue an investigation based on false premises perpetuated by a man warped with vengeance, after which not a single charge could be filed.

Could it be that New City America provided proof to authorities that no crime was ever committed? Could it be that the Reader completely compromised journalistic standards and misjudged its sources in its eagerness to print a juicy story?

Little Italy Parking District Charges:

The latest Bauder article (March 18, 2010) mentions that New City America fought to get control of parking meter funds from Centre City Development Corporation (CCDC). In fact, dating back to 2003, the Little Italy Association board has voted unanimously and consistently to establish its own parking district, consistent with the local parking district ordinance. City policy on parking meter districts allows areas to form separate districts as long as they have a minimum of 100 parking meters. This is not news to Kessler, and in fact, it was discussed at the very same LIA board meeting back in March 2003 at which he praised the management of New City America and the Little Italy Association. The 2009 contract to allocate the $240,000 in parking-meter revenues (generated annually since 1998 from the Little Italy area), was a compromise with CCDC to have them continue to oversee the parking district but to allow the association to administer the parking district funds. For ten years, over $2 million was generated from the Little Italy section of downtown into the Downtown Parking District, and less than 10 percent of those funds were returned to Little Italy to mitigate parking problems.

This arrangement with CCDC was six years in the making, and Mayor Sanders had very little to do with its final resolution. Again, Bauder and Kessler are distorting facts to fit within their narrow view that there is a conspiracy and corruption tied to every action I take to do my job -- advocating for the best interests of the business, property owners, and residents of Little Italy and any other community that hires me to work on its behalf.

Mob Connections:

The article alleges "mob" connections based upon two Italian-American BID executive directors working together. This implies that all successful and profitable projects attributed to work done by Italian Americans must be achieved through fraud and corruption. That is insulting and not deserving of further comment.

Kessler’s Case Against the Mayor:

This series of articles represents the latest descent into tabloid journalism for the Reader. Mr. Kessler is attempting to try his case, with his attorney’s endorsement, through the press. Kessler and Bauder cannot accept the fact that perhaps Mr. Kessler was fired due to his inability to perform his tasks as Economic Development director, in essence, based upon his inexperience, his unprofessional and insubordinate behavior, and his pattern of abusive authority. As for Bauder, we expected a deeper level of investigative journalism and credibility from a gentleman with so many years of experience, but were only, once again, on the receiving end of lurid sensationalism.

In conclusion, allowing the publication of clearly false and inaccurate claims, as part of Bauder’s political agenda to discredit the Mayor’s Office or the district attorney, all at the expense of my personal integrity and the reputation of my family and my company, is entirely underhanded and so far beneath the standard of responsible journalism that I do not believe that any community responsible publication would repeat them. Please set the record straight and immediately retract the articles and reprint my responses in as prominent of a spot as you gave to Mr. Bauder to attack my reputation.

  • Marco Li Mandri
  • President
  • New City America

Both stories were taken almost entirely from an FBI/police investigation of Li Mandri and Paul (Joe) Mannino, as well as a lawsuit filed by Scott Kessler. The Reader stands by both stories. — Editor

Fire Starters

Re “The Wild Wild East” (Cover Story, March 25).

I disagree with the locals who stated that the Harris fire was started by immigrants.

We of the Citizens’ Oversight Projects, who have been battling Blackwater mercenaries taking over our taxes and property, are aware of a different theory.

The immigrants had no motive to start the Harris fire in October 2007.

However, at that time, COPS and the majority of the town of Potrero were battling and resisting against Blackwater, who wanted to site a noisy base in this peaceful backcountry town.

We are extremely suspicious that the Harris fire, which burned Potrero, was started at the home of a person who was part of the citizens who joined together to recall the planning board and turn Blackwater down.

We believe Blackwater had the motive to start the fire and to then set up a refugee camp in town, which, I might add, was resented and not used.

We asked Cal Fire to investigate the fire, but it was never investigated.

I hope the concern our citizens have for immigrants who take over some jobs does not blind them to the real oppression brought by mercenary corporations who drain five times the taxes in salary that our military personnel receive.

We are again with locals pushing back against the same project, this time under the guise of Wind Zero near Ocotillo, which we have reason to believe will be sold to Blackwater if it is built, and we request the good citizens of our whole county to come out and support these neighbor citizens.

  • Valerie Sanfilippo
  • Kearny Mesa

No News Is Bad News

Don Bauder wrote two lengthy articles about the Scott Kessler v. the City of San Diego lawsuit, dealing with his being fired for cooperating with the FBI (“Too Much Conflict,” March 4, and “What a Tangled Web,” March 18, “City Lights”). The FBI was investigating two business improvement districts and recommended prosecution of their two CEOs. Of course, District Attorney Dumanis refused to prosecute.

But to me, the big story is the failure of any other newspaper to print anything about the lawsuit or the FBI report, which runs 63 pages and accuses the CEOs of a number of felonies. The mayor is heavily involved in protecting the CEOs. Obviously, protection of the mayor’s reputation ranks above news reporting in San Diego. That’s why you won’t see a word in the Union-Tribune, Voice of San Diego, San Diego News Network, San Diego Business Journal, or the San Diego Daily Transcript.

  • Melvin Shapiro
  • Hillcrest

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