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.