Mar. 1, 2012 | An attorney for the former executive director of an Alameda County anti-poverty agency, since disbanded, says a criminal complaint filed by the county district attorney is a political tit-for-tat for elected officials on the agency’s board to deflect blame. He also contends she was fired only after blowing the whistle on the board to officials in Sacramento.

The attorney for Nanette Dillard, the former executive director of the Associated Community Action Program (ACAP), and her husband, Paul Daniels, a grant writer for the same program, called the complaint “completely baseless and false.”

“The complaint was brought by the District Attorney as a political favor to the elected officials on ACAP’s board who were tasked with managing the organization, but instead destroyed it through their gross negligence and complete abrogation of managerial responsibilities,” their attorney, John Runfalo, said Wednesday.

“This case is nothing but a smear campaign pushed on the District Attorney’s office by the politicians serving on ACAP’s board whose gross mismanagement caused the organization to collapse,” said Runfola. “Those same politicians–who appointed District Attorney O’Malley to office and control her budget every year–are looking for someone else to blame for their mistakes. It’s how politicians operate.”

The charge against the ACAP Governing Board appears to single out Alameda County Supervisor Nate Miley among the 13-member body, which includes elected leaders from the city councils of every county city, excluding Oakland and Berkeley. While alleged misdeeds at ACAP may have been occurring, critics have also heaped scorn on the board which had not attained a quorum of seven members to meet after nearly a year. ACAP’s finances became public in February 2011 after employees complained of bounced paychecks. Dillard and Daniels were fired over two weeks later.

The couple, however, filed a lawsuit against the governing board in April 2011 alleging it violated the Brown Act by meeting in closed session Feb. 2, 2011 to place her on administrative leave. The agenda from that day did not mention such an action beforehand, the suit argues. They also contend the governing board failed to hand over public records involving a letter from ACAP employees to the board that led to their dismissal Feb. 2, 2011. An organizational assessment of ACAP written by Dillard herself was also denied in the records request. An Alameda County judge last month ordered the ACAP Governing Board to honor the the records request.

The attorney for Dillard and Daniels says the documents prove their innocence. “Ms. Dillard later made public records requests to obtain information that would clear her of wrongdoing,” said Runfalo. “In an apparent cover-up attempt, County officials refused to turn them over in what the Alameda Superior Court has ruled was a violation of the Public Records Act.”

District Attorney O’Malley’s office last week charged with Dillard and Daniels with felony grand theft, a crime by a public official and conspiracy. The complaint alleges the couple misappropriated state and federal grants. Included in the complaint are allegations they used ACAP staff to perform home improvement services at their residence. But, Runfalo says the complaint alleges they used the funds on payroll and other expenses and “not on personal enrichment.”

“The $1.5 million figure released by the D.A.’s office to the press, like the complaint itself, was a fabrication to achieve favorable media spin,” said Runfalo.

Brendan Hickey, the attorney for Daniels said, “Paul Daniels did not steal one cent of the taxpayers’ money and he did not break the law,” and added,  “Mr. Daniels is being prosecuted by the District Attorney–-despite an obvious conflict of interest–not because he did anything wrong, but because he happened to be married to ACAP’s Executive Director, Nanette Dillard. And because it is politically convenient to blame Ms. Dillard for ACAP’s collapse in an election year.”

Brad Yamauchi, an attorney for Dillard representing her in a whistleblower lawsuit against ACAP said, “When Ms. Dillard alerted ACAP’s governing board of significant accounting discrepancies in ACAP’s budget, they did nothing. When she sent a whistleblower letter to state officials in Sacramento informing them of the same discrepancies, they fired her.”

While all 12 cities in the ACAP joint powers agreement agreed to wind-down operation of the agency last year and pay equal shares of its dissolution, there continues to be questions over what occurred at ACAP and who was aware of the troubles ultimately leading to its demise.

In court documents filed last year by Dillard against the ACAP Governing Board and comments made by during their meetings in February 2011, it is likely Miley’s association with the Dillards, the county and his daughters employment at ACAP allowed him unique window into its alleged mismanagement. The issue of a 26-page document authored by Dillard in January 2011–a month before the agency’s collapse, may also illuminate the nature of some the problems at ACAP and who know about them before its problems became publicly known.

An attorney for the ACAP Governing Board, who read Dillard’s “organizational assessment” of ACAP, filed an affidavit last fall saying the document made pointed remarks about ACAP staff, governing board members, other county social services agencies and third-party vendors. The attorney also testified to a passage in the document stating it was specifically written for Miley and Albany Councilman Robert Lieber, the then-chair of the governing board.

ACAP’s counsel dismissed the contents of Dillard’s assessment in court filing as a venue for her to boast over her accomplishments and “deflect blame.” It also characterized the document’s value as “largely false and unreliable.”