Tuesday, February 3, 2015

ABAG Embezzlement Scandal: S.F. missing funds suspect bought $1.5 million beach house

To date, the Marin IJ has refused to report this news.  Why? 

S.F. missing funds suspect bought $1.5 million beach house

By J.K. Dineen
Updated 10:03 am, Tuesday, February 3, 2015

Just three days after Bay Area public finance official Clarke Howatt allegedly posed as a Rincon Hill developer to siphon $1.3 million from a San Francisco community fund, he closed on a $1.53 million, five-bedroom beach house on the picturesque Oregon coast.

He named the property Rincon Hill, according to ads posted on rental websites. Perched on a ridge between the Nestucca River and the Pacific Ocean, the 5,100-square-foot home may be seen as an extravagant purchase for a bureaucrat who spent 20 years working for the Association of Bay Area Governments.

But perhaps not for Howatt. On Monday, as law enforcement officials tried to track him down for questioning, a picture emerged of Howatt as an art collector and ballet aficionado with multiple homes.

In addition to the Pacific City, Ore., property, Howatt owns properties in Maui and keeps a boat at the Columbia River Yacht Club, in Portland, Ore., according to public records. In recent years, he has lived in a loft at 125 Second St., near Jack London Square, in Oakland, where he is said to have an extensive collection of California plein air art.


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Officials are seeking to determine if Howatt created a fake entity purporting to be the developer of the One Rincon Hill high-rise housing complex and then sought a $1.3 million reimbursement for streetscape improvements that were never made.

The money was discovered missing in December during a routine audit of the South of Market Stabilization Fund, a pool of bond money and developer contributions used for neighborhood improvements.

On Friday, Howatt resigned as director of financial services for ABAG, a regional government agency that provides planning and public monetary services to Bay Area cities. It is not known where he is or whether he intends to cooperate with an investigation.

Possible wire fraud

Howatt has hired a defense attorney, Mary McNamara, who did not return phone calls or e-mails on Monday. Because wire fraud may be involved, it would most likely be a federal investigation and the FBI is apparently looking into the case.

Described by an acquaintance as charming and well-read, Howatt sports a white beard and is nicknamed Hemingway because of his resemblance to the writer. He recently donated more than $5,000 to Alonzo King Lines Ballet and can be seen posing for photos at gala fundraisers for the organization. He also has contributed to the San Francisco Bay Trail project and Hillcrest School in Oakland.

Howatt purchased the Maui property in 1998 with his estranged wife, Janelle Howatt, for $140,000. It’s unclear what type of property he owns in Portland, which is described in public records as a “floating” parcel purchased in 2011 for $45,000.

The property in Pacific City is available to rent for $799 a night.

An ad on Craigslist states, “This beautiful home has 5 bedrooms, 5 bathrooms, a 10 person hot-tub, expansive ocean views from almost every room in the home, a private boat house, propane fueled outdoor fire pit, pool table in the loft, and a large and open gourmet kitchen, dining, and living space. Rincon Hill is the premier place to host meetings, weddings, events, and family and corporate retreats.”

In September, he and his wife sold a town house in Dublin for $745,000, according to the current owner. And last June, he purchased a $301,000 condominium in Moraga, where his daughter attends college.

Risk-averse reputation

During his 20 years at ABAG, Howatt built a reputation as a conservative steward of public funds, a risk-averse executive who regularly turned down deals that failed to meet his standards, said colleagues who declined to be identified because of the sensitivity of the situation. Howatt earned $149,294 a year in salary and had a total compensation package of $233,375, including benefits.

Howatt joined ABAG in 1995 from the San Francisco office of Rauscher Pierce Refsnes, a financial services company, and was described by an ABAG employee as “a reliable financier of thousands of deals.”

That image clashes with a statement last week from ABAG Deputy Executive Director Brad Paul: “It appears that Clarke Howatt ... executed a sophisticated scheme to defraud the agency by creating illegitimate documents, creating false identities, and deceiving (ABAG’s Finance Authority for Nonprofits) board and bank trustees to wire these funds.”

Paul said Howatt wrote in his resignation letter that “I will make every attempt to get the funds restored” and “I’ll try my best to get the money replaced as soon as I can.”

J.K. Dineen is a San Francisco Chronicle staff writer. E-mail: jdineen@sfchronicle.com

Twitter: @sfjkdineen

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