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Millions in Grants Raise Questions

In better fiscal times, lawmakers sent tax money to projects in their districts through parks agency. Some are now being audited.

September 09, 2004|Dan Morain and Evan Halper | Times Staff Writers

SACRAMENTO — When California was flush in surpluses a few years back, lawmakers gave away millions to politically connected private entities -- gifts that are now raising questions from auditors and others.

Investigators are looking into a grant to a San Francisco nonprofit group whose leader allegedly directed $200,000 in campaign donations to Secretary of State Kevin Shelley. As an assemblyman, he had helped arrange the grant. A review of state spending records shows that other lawmakers directed millions more to other nonprofit corporations.

Putting money into the state Department of Parks and Recreation, some of the most influential lawmakers in Sacramento secured nearly $25 million for more than 80 groups, which spent it with limited oversight. The money is a fraction of the more than $1 billion in "pork barrel" allocations made at the end of Gov. Pete Wilson's tenure and the beginning of Gov. Gray Davis'.

The grants helped Eagle Rock shop owners spruce up their storefronts, paid for a roller coaster in Fresno and helped build a Jewish community center in San Francisco -- one backed by major campaign donors and by U.S. Sen. Dianne Feinstein and her husband, Richard Blum.

The state tax money helped the San Diego Maritime Museum stage a tall ships regatta, constructed facilities for boys and girls clubs, paid executives' salaries and created an archive of gay history in Northern California.

The giveaways to nonprofit corporations occurred primarily in Davis' first two years in office, when the high-tech stock bubble helped create a multibillion-dollar state budget surplus. Unlike most state spending, the "pork" came with few strings attached.There was, for example, no competitive process for receiving the grants. Nor did civil servants inspect the sites or investigate the recipients' backgrounds before checks were issued.

"Our role was essentially to ferry the money from the legislator to the recipient," Roy Stearns, state parks department spokesman, said Wednesday. "These are legislators' grants, and our role in administering them was minimal.... The budget orders us to deliver money, and we do it."

Former state Senate Leader David Roberti, a Los Angeles Democrat who helped craft several budgets during the 1990s and create a grant program for local parks, questioned the practice of making such grants. He said the parks department should retain oversight.

State grants "have to be picked based on need and not based on whether you have a legislator sitting in a powerful position at a given time," Roberti said.

The grants came into focus recently when the San Francisco Chronicle found that a San Francisco group failed to spend a $492,500 grant to build a community center as promised, spurring state and federal audits and investigations. Shelley, when he was a San Francisco assemblyman, helped secure the grant. State auditors also have redoubled efforts to investigate all the grants.

The San Francisco Neighbors Assn. project was one of 84 grants to nonprofit entities between 1999 and 2002. A review of the Parks Department files on 24 of them shows that legislative leaders secured the bulk of the money. Many of the recipients had influential benefactors.

Some files are thick with documentation. A $485,605 grant to rebuild historic Camarillo Ranch included a $575 receipt for the removal of a beehive. Other files, such as the one on the San Francisco Neighbors Assn., contained scant detail.

At least some of the money went to projects that appear to have no connection to parks. In the Eagle Rock district of Los Angeles, much of a $295,500 parks grant was given to businesses like gas stations, liquor stores and auto body shops to redesign their storefronts.

Each business admitted into the Eagle Rock Downtown Storefront Improvement Program was given up to $10,000 in state money for such things as exterior remodeling, painting, cleaning, removal of outdated signs, new signs, landscaping and new doors. Recipients included a Shell gas station, Ray's Auto Repair, an establishment called Fatty's and Co. and an unidentified liquor store.

Program coordinator Linda Allen said the project has helped revive a blighted business district, and said she provided documentation to parks officials every step of the way. An auditor called her recently and will be making a site visit in the coming weeks, she said.

State Sen. Jack Scott (D-Altadena) secured the Eagle Rock money. "I was able to see with clarity the money was accounted for," Scott said, "and the project was overseen by the historic and cultural preservation wing of the parks department."

In San Francisco, the Jewish Community Center received $1.7 million in 2000 and 2001 to build a new facility, thanks to efforts of Shelley and former Assemblywoman Carole Migden (D-San Francisco), a Board of Equalization member who is running for a state Senate seat in November.

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