Times Reader: Impropriety?
— by Jeffrey Wisniewski — 18 October 2009 — 3 comments below »
A Contra Costa Times reader and Waterfront resident opined on the affordable housing affair… “I am very concerned and would like an independent review. The words ‘grand jury’ come to mind.“
If we lift up the rock to shed some light on these dealings, we find what appears to be an interlocking web of insider dealing between a handful of old cronies who over the years have enriched themselves by steering public contracts to each other. This behavior is enabled by the city council, some members apparently having a financial interest in the dealings themselves. So here goes……
Balico and the council hired Nelson Oliva’s Affordable Housing Solutions Group, dba NEO, to manage affordable housing projects in Hercules as early as 2003. Since then, oodles of taxpayer money has gone to NEO, which was run by Nelson Oliva until the city council hired him as city manager. Instead of terminating the contract with NEO because of its association with Oliva, the city council allowed Oliva to hand NEO off to an old friend, Walter McKinney. The city continued to contract with NEO as an affordable housing consultant. McKinney hired Oliva’s three daughters as employees of NEO, even making Taylor Oliva President of NEO, despite the fact that, based on the Affordable Housing Solutions Group website, she was apparently still a college student in Davis at the time. Nelson continues to sign off on all the many contracts the city has with NEO, his former company now run by his friends and his three daughters.
With NEO employing three of the city manager’s daughters, the City still decides to enter into ADDITIONAL contracts with NEO to handle all kinds of “programs” unrelated to affordable housing, including such things as “mail box replacements.” All these contracts are approved by the CIty Council and signed by the NEO President’s father, Nelson Oliva.
How did Oliva go from being Affordable Housing Director to City Manager? Former city manager Sakamoto recommended Oliva to be city manager when he stepped down, and the citycouncil rubber stamped the deal. Oliva then turned around and hired Sakamoto to run the city’s municipal utility district. But Sakamoto earns city dollars from NEO also, because NEO’s director Walter McKinney, as previously mentioned another old friend of Oliva’s, also hired Sakamoto to work for NEO. Sakamoto is now on the city payroll to manage HMUD, and is on NEO’s payroll as well.
McKinney’s consulting firm, the McKinney Group, LLC a/k/a Professional Strategic Partners.com, may also be the recipient of additional contracts with the city; his website claims that his firm is managing a $56 million retail development in Hercules. No doubt grateful for all the city money flowing his way, McKinney and NEO have hired another Sakamoto, Jonathen, and then Ed Balico’s son, to work for NEO.
And so this is how government is run in Hercules.
Messrs Mayor Joe Eddy McDonald, Councilmember Donald Kuehne, Councilmember Joanne Ward, Councilmember Ed Balico, and Councilmember Kris Valstad,
It’s time to clean house. Your constituents are disgusted that you could have let these very untoward relationships/dealings (and perhaps far worse) come to pass. This dark cloud hanging over the city threatens the city’s future and reputation (and hence all of our home values). Without an impartial, above-board city government and staff, the city will unquestionably fail it citizens in realizing its vision first outlined in the 2000 charette which is why most of us relocated or remain here.
We demand that the council:
1) Publicly review the $1.65M that Tom Lochner asserts in his 10/13/09 “Hercules loan deals don’t add up” editorial was either incredibly improper, incredibly stupid, or incredibly illegally loaned. Let’s hear NEO President Taylor Oliva eloquently review the merits of these loans which she most certainly would know as the “guiding force of the company” as stated on NEO’s website.
2) Publicly terminate its relationship with NEO consulting and the McKinney Group, LLC.
3) Publicly reprimand Mr Oliva and insist that his daughters give back all fees “earned” in the course of their very dubious NEO employment.
4) Publicly reprimand Mr Sakamoto and insist that his son Jonathen give back all fees “earned” in the course of his dubious NEO employment.
5) Demand a very swift and pro-active adoption of Hercules anti-nepotism and cronyisn policies giverning both internal and external relationships that are clear, concise, and effective immediately.
By the way, simply honoring your own City Council Mission Statement posted on the City of Hercules website would be a good start:
http://www.ci.hercules.ca.us/index.aspx?page=54
“Our mission is to lead our diverse community and enhance the quality of life in the City of Hercules, now and in the future. We do this by providing effective, efficient, responsive, and innovative services with integrity.”
* I think “enhance the quality of life” is supposed to apply to the citizens of Hercules and not to city council and staff and their respective friends and families.
* “…providing…with integrity”. Nothing about the NEO relationship or affordable housing loans smacks of integrity to me.
So what does all that have to do with the questionable city loans to buy condos at inflated prices? Here is my theory: It was not enough to steer contracts to NEO and hire their kids to work at NEO. Because this three ring circus, (Oliva, McKinney and Sakamoto), enabled by certain cuncilmembers, are so used to feathering their own nests, they saw nothing wrong with using their positions as the very people hired to review and approve applications for low income housing subsidies to approve such aid for their own friends and family, some of whom were employees of NEO or otherwise connected to city officials.
It was a great deal for them, but were the recipients truly eligible? Did they jump to the head of the list? How could these awards possibly be above board?
Yes, a great deal if you were part of the inner circle …. until the real estate market crashed. Having been so used to MAKING money off the system, with property values now plummeting, the beneficiaries of these special deals now stood to LOSE money. So what do our public officials do? They reach into the piggy bank again and bail out their cronies by relieving them of their bad mortgages. Sweet!