A public agency whose former director is suspected of stealing $1.3 million from a South of Market community fund decided Tuesday to pay the money back from its reserves while his attorney said he will cooperate and attempt to pay back the money himself.
Clarke Howatt's attorney, Mary McNamara, a high-profile defense attorney who represented Barry Bonds and Victor Conte in the BALCO steroids case, said that her client is not on the run and would “fully cooperate with law enforcement and with ABAG.”
“We are in the process of making sure the money gets returned,” she said. “He hasn’t gone anywhere — he never did go anywhere.” She did not say, however, where he is.
The executive committee of the Finance Authority for Nonprofit Corporations, an independent arm of the Association of Bay Area Governments, voted unanimously Tuesday to return the money to the South of Market Community Stabilization Fund as soon as it can be arranged, most likely next week.
The authority was managed until Friday by Howatt, who is accused of setting up a dummy entity to draw the money from the San Francisco community fund.
The reserves come from fees that FAN collects for helping eligible nonprofits and other borrowers gain access to tax-exempt debt financing. The agency has about $3.5 million in reserves and hopes to get the reserve money back eventually, either through insurance or from Howatt.
The vote comes as ABAG and FAN launch a full forensic audit of all of Howatt’s work at the quasi-government agency over the last 20 years. The FBI is reviewing information provided by both ABAG and FAN.
Howatt resigned Friday in an e-mail sent to ABAG through a Gmail account. In that same e-mail, he said he would pay back the money if he could.
On Monday, The Chronicle reported that Howatt had bought a $1.53 million beach house in Oregon just three days after the $1.3 million was stolen from the SoMa fund, which is meant to pay for public improvements like parks and streetscape improvements.
“Everybody here is angry and feels betrayed,” one ABAG employee said Tuesday.
Tom Temprano, who sits on the committee overseeing the SoMa community fund, called the vote to repay the money “great news on our end.”
“The idea that money meant to be invested in our parks and sidewalks might have ended up in someone’s beach house is disheartening and unthinkable,” Temprano said. “We have spent a year and a half going through a neighborhood process to identify where that money should be invested. I think all of us are looking forward to using it to make our parks more usable and our streets safer.”
Supervisor Jane Kim has called a hearing of the Budget and Finance Committee on Wednesday to look into how community benefit funds like the SoMa Stabilization Fund are administered.