The great escape

› gwschulz@sfbg.com

There are some dark clouds hovering over City College of San Francisco. The District Attorney’s Office is investigating political corruption allegations, a long-awaited audit of half a billion dollars in bond spending is just months from completion, and several infrastructure projects are running tens of millions of dollars over budget.

But Chancellor Phil Day won’t be around to clean up those messes. He’s leaving City College for a new job on the East Coast at the National Association of Student Financial Aid Administrators as early as March 1.

Day’s announcement came just weeks before the school’s Board of Trustees Jan. 10 unveiling of the results of an internal investigation into who knew what about City College money from taxpayers being diverted to an election campaign committee that should have operated entirely independently of the school.

The investigation concludes that there was no evidence that contractors made donations to a campaign committee formed by the school’s leadership in exchange for favorable business arrangements.

But the report does confirm that two lower-level bureaucrats, Stephen Herman and James Blomquist, instructed business tenants who used school facilities — the coffer vendor Bean Scene and Bay Area Motorcycle Training — to sign rent checks over to the committee instead of to the school. Neither tenant appeared to have any intention of contributing to the committee.

The timing of the checks is also questionable. The school returned the Bean Scene’s $20,000 rent check shortly after recognizing a potential violation of the state’s Education Code, which prohibits using school funds for electioneering purposes. But officials then violated the same provision when a $10,000 rent check from the motorcycle-training outfit wasn’t returned to public coffers until a year and a half later, when the San Francisco Chronicle‘s Lance Williams began snooping around.

"The fact that an apparent misuse of public funds could be discovered, corrected, and then occur again after such a short period reveals a glaring lack of oversight of the College’s involvement in fundraising from College contractors, literally from start to finish during the campaign," the report states.

City College’s trustees and school administrators created the Committee to Support Our City College in 2005 as a campaign vehicle for convincing voters to authorize $246 million in bond projects, the third such bond election for City College in a decade.

The report’s executive summary in part downplays the significance of the Chron stories from last April that inspired the probe in the first place. Rather, it implies that the fund diversions had more to do with a poor accounting system and an 11th-hour decision to rush the bond election to voters with minimum preparation.

It’s not clear how the report will impact a DA’s investigation of the campaign committee related to the same allegations. The Guardian revealed last summer (see "Day’s Dilemma," 8/8/07) that just days before the November 2005 election, Kamala Harris’s office also requested documents stemming from the college’s $8.7 million purchase of land in Chinatown that the county determined was worth only $1.7 million for tax purposes.

We also reported that City College’s half a billion dollars in infrastructure improvements are running approximately $225 million over budget and as a result, the school has gutted projects promised to voters and reallocated about $130 million in order to sustain others (see "The City College Shell Game," 7/4/07). An expansive management audit of the school’s bond spending is due in June.

In a prepared statement, Day insists the fund diversions were an accident, and he complains that if the San Francisco Ethics Commission had notified it of the mistake sooner, the school would have corrected it. The Guardian reported that the Ethics Commission had known the Bay Area Motorcycle Training check was illegally used by the committee but waited for more than a year to notify the state’s Fair Political Practices Commission of a possible elections law violation (see "At the Crossroads," 7/18/07).

"As the chancellor and CEO of this college, I take responsibility for these mistakes," Day’s statement reads. "However, it is important to understand that these mistakes occurred innocently and inadvertently, and as soon as we learned of them, we took immediate action to rectify them."

An exasperated Day, who became City College’s chancellor in 1998, said in a phone interview that he didn’t believe the school’s troubles would make it difficult for his successor to return to the ballot and get voters to approve bond projects they’ve already partially paid for, including a stem-cell technology training center.

"I don’t feel like I’m leaving someone with disarray," Day told us. "It’s the people in the institution that sometimes make mistakes, not the institution itself."

Day’s departure also comes as a building inspector hired by the school in 2003 alleges in a federal lawsuit that he was wrongfully terminated last summer for blowing the whistle on illegal building code violations and for making safety complaints during facility renovations. The suit was filed Dec. 24, 2007.

Plaintiff Lawrence Lauser contends that he’d repeatedly informed his bosses at City College that building codes were being violated during construction work, but there was no willingness to fix them.

Instead of being outright fired, Lauser alleges, he was told the work had run out. "That was a complete sham," his attorney, Frank Sarro, said. "There wasn’t a lack of work at all." Lauser is also suing his union, the United Brotherhood of Carpenters and Joiners Local 22, for refusing to request arbitration with the school on his behalf.

"He just had a strong feeling that things should be done by the book," Sarro said of Lauser. "And his bosses didn’t want to hear it."