The San Diego Association of Governments now has new policies meant to limit staff’s lavish restaurant spending and credit card misuse after a scathing audit, first reported on by inewsource, flagged expenses.
Board members unanimously approved the rules during their board meeting Friday, now requiring staff to submit substantially more documentation for credit card charges and business meals. The cost of meals are now subject to annual rates set by the federal government; in San Diego, for example, dinner is capped at $34 per person.
Why this matters
As the regional planning agency, the San Diego Association of Governments uses a more than $1 billion, taxpayer-funded budget to make long-term decisions on major transportation and infrastructure projects.
But SANDAG has yet to complete its review of past transactions to determine whether any “corrective action,” including disciplinary action or requiring employees to repay the agency for charges, is needed.
Deputy CEO Ray Major told inewsource SANDAG employees are working remotely after the agency closed offices due to a COVID-19 outbreak. Staff will resume their review of the original receipts — stored on site in bankers boxes — when they return in early July.
“A lot of people are looking at this agency and the fact that we have found areas where monies were spent in excess,” said Carlsbad mayor and SANDAG board member Matt Hall. “I think the quicker we can clear the air on this and get that monies back in our coffers, the better it is.”
The new policies come after SANDAG’s internal auditor earlier this year flagged “questionable” and “improper” transactions, including nearly $70,000 spent at local restaurants over a four-year period. inewsource later obtained records revealing that some of the agency’s highest-paid staff regularly held business meetings at high-profile restaurants and often were joined by elected officials, fellow employees, consultants and lobbyists.
In September 2019, for example, a dinner for five SANDAG officials at the high-profile Occidental Grill in Washington, D.C. totaled more than $700. The visit included branzino for everyone at the table, appetizers and entrees such as a $52 “feature meat” dish and a nearly $50 filet mignon, among other items.
Taxpayers were forced to foot the bills, and the agency’s credit cardholders continued to rack up charges without any clear rules. The charges — made at Rei Do Gado, Donovan’s steakhouse and in the U.S. Grant Hotel, among others — were called by one government ethics expert a “clear abuse” of public funds.
Under the new rules, just one employee will be allowed to use an agency credit card for business meals: CEO Hasan Ikhrata. That’s despite being one of SANDAG’s biggest spenders, with $17,000 spent at restaurants in just two years.
The agency has justified his spending, saying the expenses were for “business purposes” to advance projects and priorities.
Ikhrata now must submit additional paperwork, including itemized receipts and claim forms that list attendees and the business justification for the meeting. The benefit of the meeting, a preliminary cost estimate and “whether any actual or perceived conflict of interest exists,” among other factors, must be considered.
Staff will be trained on the new policies.
“To the extent that all of us were surprised by some of the revelations in recent months, the way to correct that is to actually pass these policies so that we have rules of the road for folks to follow,” San Diego Mayor Todd Gloria, SANDAG’s vice-chair, said ahead of the vote Friday.
Mary Khoshmashrab, SANDAG’s independent performance auditor, has put her office’s support behind the policies — she sent drafts back to staff four times before bringing it to an audit committee — and plans to review transactions after the policies are implemented. The agency’s board also will receive regular reports on the agency’s business meals.
Type of Content
News: Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.