A draft audit by the city of Los Angeles found no financial irregularities by the Valley Economic Development Center and concluded that its former president, John Rooney, did nothing illegal by accepting consulting fees while on the job. Still, the board of the non-profit business assistance organization will revisit policies that allow top officials to accept fees in addition to their regular salaries, VEDC officials said. “The board will discuss it. (The early consensus) is, the president and the CEO shouldn’t get fees, but we’re waiting for the final report before we begin taking a harder look at it,” said Roberto Barragan, the group’s interim president. The final city audit is due out any day, but the draft report concluded that Rooney did nothing illicit by accepting $5,700 in fees for his role in helping Signs 2000, a Canoga Park sign maker, to secure $1.2 million in venture capital from a Japanese businessman. The independent audit, which was ordered by L.A. Mayor Richard Riordan after questions were raised about the deal last summer, confirms that Rooney was entitled to such fees under his employment contract with the board, said Marvin Selter, VEDC’s chairman. The city audit, as well as an independent audit commissioned by the VEDC board, found no other financial irregularities, Selter said. “I think it’s a total vindication of the VEDC,” said Selter. Rooney, who has been working as a private consultant since leaving the VEDC in August, said the audit comes as vindication for him as well. “I’m glad that finally the public knows I did things with integrity. This was a political issue. I’m glad it’s finally over,” Rooney said. “The good thing is, the VEDC will continue to do good work in the community.” Rooney was forced out of the VEDC as a result of a falling out between himself and then-VEDC Chairman and Chief Executive David Honda. Honda, a general contractor, asked for Rooney’s resignation last summer after expressing dissatisfaction with his fiscal management and stewardship of the organization. Honda and other board members were also concerned about Rooney accepting consulting fees at a time when the agency was having a difficult time financially. Rooney fought back by enlisting the support of several other board members, who asked Honda to resign for allegedly micromanaging the organization. Honda consented in July, but his ouster prompted several other board members to resign in protest. Rooney, under pressure from critics, resigned his job a short time later. The auditors also examined whether Honda should have accepted a contracting job from a business that had received a VEDC loan, but concluded that the deal was consistent with agency policy at the time. Honda was unavailable for comment. The VEDC operates several small-business assistance programs for training and advising entrepreneurs throughout the San Fernando Valley. Its largest source of funding is the U.S. Department of Commerce.
City Audit Vindicates Former Chief Of VEDC Accused of Irregularities