Judge dismisses all charges against couple once blamed for fall of ACAP

The Associated Community Action Program, better known as ACAP, was dissolved by the Alameda County Board of Supervisor and its member cities in 2011 amid allegations against Nanette Dillard, its executive director, and her husband, Paul Daniels, of theft and misappropriations of county funds that eventually contributed to the agency’s downfall.

Four years later, an Alameda County jury convicted each of only theft regarding federal grant rules and they received no jail time. But the long and winding controversy took another turn Friday after Alameda County Supervisor Allan Hymer dismissed those and all remaining charges against Dillard and Daniels.

“After six long years, Mr. Daniels has been completely exonerated of any wrongdoing,” said his attorney, Brendan Hickey. “ACAP closed down due to chronic failures of management by the Alameda County officials, and the District Attorney’s attempts to cover up those failures with false and illegal accusations have finally been rejected by the courts.”

Friday’s order followed a state appellate court’s decision that overturned the couple’s past conviction of theft, determining since the state law is pre-empted by federal law. Judge Hymer also overturned Dillard’s conviction for backdating documents that was not included in the appellate court’s ruling.

“The Court of Appeal sent a clear message to Ms. Dillard’s political enemies in Alameda County that they were not at liberty to refashion a federal program designed to help to poor, into a weapon with which to attack Ms. Dillard.” said Violet Elizabeth Grayson, Dillard’s lawyer

The Associated Community Action Program was created by Alameda County cities to specifically tailor services for the poorest of the poor, in addition, to providing training for the recently incarcerated to get back on their feet and even prepare them for opening their own businesses in the future.

When news of ACAP’s financial difficulties became public and its impending dissolution became likely, Dillard and Daniels became scapegoats despite additional evidence that the ACAP board made up of mayors and councilmembers from cities involved in the joint powers agreement, rarely attended quarterly meetings.

The Alameda County Auditor-Controller’s Office also neglected to perform its oversight of ACAP. In the aftermath of the controversy, an auditor’s report acknowledged a mandatory audit of ACAP’s finances had not occurred.

In many cases meetings were cancelled due to a lack of a quorum. The controversy also ensnared Alameda County Supervisor Nate Miley who initially suggested during ACAP meetings that he had knowledge of the agency’s financial difficulties. Miley’s daughter also worked for ACAP during the same period.

When paychecks for ACAP’s roughly 30 employees bounced, the agency’s problems became public. Dillard was later dismissed as ACAP executive director. However, Dillard was later awarded $300,000 after successfully suing for wrongful termination.

Salacious allegations from county officials and the district attorney’s office alleged Dillard and Daniels used ACAP’s fund for their personal benefit, including spa treatments and household remodeling jobs.

The resulting dissolution of ACAP also caused consternation among member cities, some of which initially refused to pay their share of the costs for winding down the agency’s finances, estimated at $2 million.

Although the ACAP controversy was used as political cudgel during the 2012 and 2014 elections by some opponents running for Alameda County Supervisor, the entire episode was largely forgotten until the past June primary when a candidate for Alameda County Auditor-Controller used the oversight of ACAP by that office as proof it is historically lax in its auditing responsibilities.

6 thoughts on “Judge dismisses all charges against couple once blamed for fall of ACAP

  1. Anonymous,

    Why are you surprised by her. She was unapologetic because she was assured by her owners that there would be no impact legally. The fix was in. We can see it now. In hindsight. $2 million dollars in federal grants funded by the taxpayers spent without oversight and enriching the principles. Exonerated by the Federal and Superior courts.

    Perfect crime.


  2. I was in the courtroom when Diana Souza was testifying. She was a mess. She could not even answer a straight question. She came off incompetent and uncaring. She could not accept blame and was not apologetic at all for her part in the closing of an important agency.


  3. Tony: You are right.

    Anonymous: You and I are and were in agreement. Steve appears to be in on this as well as the Chronicle article is much more factual.

    You did not read my response well. I am no apologist for ACAP. I followed this case from the beginnings and summarised it for you. I will try again. The SF First Court of Appeals reversed the convictions by ruling that the case should have been Federal and administered by the agency. Poorly prosecuted by O’Malley. Miley and the group were all in on this. Judge Hymen vacated the convictions of Dillard and Daniel. The fix was in from the beginning. The only people who lost were those who were to get paid and the taxpayers who provided the original funding. No investigation into all of. The whole group is corrupt.


  4. The person who left the above comment knows nothing about the ACAP case or the law. That’s very clear. You can read the PUBLISHED opinion from the appellate judges themselves online at https://law.justia.com/cases/california/court-of-appeal/2018/a141998.html. This case will now stand in perpetuity as legal case law that will be cited time and again and will be used to fight against politicians who try something as stupid as the ACAP Governing board and the County did. In fact, I would suspect that the person who wrote the above mis-informed comment was one of the derelict ACAP Governing Board members who could not be troubled to do their job and are hoping to keep the smear on other people. I will agree that there was money stolen, but it was not from the people…who all got their funds back. It was stolen from ACAP itself by the County of Alameda. The ACAP audit report shows that $259,000 went missing from ACAP that year through the Alameda County Auditor-Controller’s Office. Coincidentally, staff at the Livermore Parks and Recreation received bonuses through the auspices of Alameda County Supervisors Miley and Haggerty, both ACAP Governing Board members, for…wait for it…$259,000. This is a huge violation of federal law, but the County doesn’t care.
    The real truth is that ACAP had plenty of grant funds coming in to keep the organization well into the black, but how do you keep an agency afloat when the public agency tasked with the fiscal duties is stealing their money? Bounced checks did not happen while Nanette was running the company. Not – even – once. Talk to former staff and they will tell you that themselves. Furthermore, if you want collusion…look at how quickly ACAP was dissolved. Who ordered that speedy dissolution? Nate Miley. Who was behind getting ACAP’s yearly appropriation to go to the City of Oakland where he still has allies? Nate Miley. Who was first in line with his hand out looking for ACAP’s annual allocation of federal funding from the newly-formed Alco-OCAP agency to pay for his new, shiny youth center? Nate Miley. He purposely orchestrated this whole travesty to wrest ACAP’s money away from the organization for his own use. When ACAP was still running he used to have his staff go around to meetings where ACAP had interests and smear the agency on which he was a Governing Board member and its director then he would tell people “Where there’s smoke there’s fire.” Only he was the one starting the fire and fanning the flames. …And people keep electing this clown! And Nancy O’Malley is complicit. She absolutely knew that you cannot charge federal crimes in a state court. That is law school 101. The amount of public money spent on this cover up of Miley’s crimes against ACAP is staggering. From all of the investigators, private auditors, auditor-controller staff, judges, district attorney staffers, county counsel staffers, private firm attorneys, city staffers…it goes on and on well into multiple millions of man-hour dollars in public funds. And all of those jury members who spent almost 5 months of their lives sitting through an illegal trial… disgusting!
    If Alameda County is going to ever going to be about something, if it is ever going to support the people who live here and are suffering because of these tone-deaf, gutless, untalented, lying weasels, there will have to be retroactive term limits put in place to kick these creeps, including the DA, to the curb, out of their offices and to keep these kleptocrats from building empires where they control, the money, the spin, the agenda, strawmen, and, yes, all those secrets. Nancy O’Malley should not be acting as a hitman for corrupt politicians, but that is exactly what she is. What was done to Nanette was done to warn others who know about the corruption in Alameda County from coming forward. Remember, Nanette brought a case against Alameda County and the ACAP Governing Board AND SHE WON! She has won every single legal battle! That should be a clue.

    FYI: Steve was not scooped.


  5. Steve,

    Please correct your reference to Allan Hymer as Alameda County Supervisor in the second paragraph. He is an Alameda County Superior Court Judge.

    Your reporting is does not really tie up this package as well as Chronicle reporter Bob Egelko, who also scooped you.

    In March the San Francisco First District Court of Appeals overturned the convictions for Misappropriation of funds in March 2018 on the technicality that this was a Federal Issue under the US Department of Health and Human Services which has no remedy for the charges. The court left in place the convictions.

    Your story mixes up the time line of the Appeals Court in March and the Superior Court in July. Messy reporting. This is not up to your standards.

    The mandatory audits of ACAP were never conducted and the scandal burst when all the paychecks bounced. One of those paychecks went to a Miley family member. Nothing like money to get folks riled up. You reported this well in 2011. No follow up though.

    Judge Hymer on Friday dismissed all the remaining charges from the 2014 conviction, as well as all restitution. That is part if the story you were not clear about. There is a lot of things wrong with this in Alameda County. Is this evidence of the fix? Circumdtantially this looks like the incumbents are protecting their own and not the public.

    Here are some other things you did not mention but based on the past may well be true.

    The Alameda County District Attorney Nancy O’Malley did not appeal the vacation of restitution. Is there collusion between the Board, including Nate Miley, the Auditor-Controller, Judge Hymer, DA O’Malley, Nanette Dillard, Paul Daniels, and the associated lawyers Hickey and Grayson?

    What we know for sure is that well over $2 million dollars in Federally Controlled funds were not appropriated correctly. Based on a technicality and poor prosecution and oversight, none of this money is paid back. The lawyers, Hockey and Grayson got their fees. Judge Hymen made sure that Dillard and Daniels have no liability. The DA is not proceeding with an appeal. Dillard got $300,000 for wrongful termination for stealing $2 million dollars. Her staff were not paid. The Da keeps her job. The Auditor-Controller insiders keep theirs. There is no Grand Jury investigation. No DA investigation.

    The only folks who lost out are the taxpayers and the cities where this work was poorly done.

    The choice of course is to keep the system alive with the incumbents or get them all out of office.

    Steve, this is not your best effort at calling out the issues.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s