OAKLAND -- A flustered Alameda County finance official testified this week that her department had little responsibility in overseeing an anti-poverty program whose former director is accused of stealing money from the government.
The county's role was "solely bookkeeping," not monitoring how the semiautonomous Alameda County Associated Community Action Program managed its budget and expenses, said Minerva Mendoza, a high-ranking finance manager at the Alameda County Social Services Agency.
Mendoza appeared exasperated as she answered a barrage of questions from defense attorneys representing Nanette Dillard and Paul Daniels, a husband-and-wife team on trial in Alameda County Superior Court on charges they misappropriated federal grant money.
"They run the program, they know the grant," Mendoza said. "We cannot monitor everything."
Dillard was executive director of the anti-poverty agency, known as ACAP, until she was pushed out in 2011 and the nearly 40-year-old program was disbanded. Daniels, her husband, was a grants manager. The Alameda County Social Services Agency was ACAP's fiscal sponsor, in charge of the "safekeeping and disbursement" of all the money that went in and out of the grant-funded organization. To access grant money awarded to ACAP and get reimbursed for expenses, Dillard needed to file forms that Mendoza and other county officials approved.
Mendoza, a witness called by prosecutors from the Alameda County District Attorney's Office, said she did not know that Dillard might have been illegally drawing down money from a federal anti-poverty grant to cover payroll and other administrative expenses. Some grants have restrictions in how they are spent, but "if I read all of those, I'd go crazy because there are a lot," Mendoza said.
She noted that ACAP represented a tiny fraction of the county's $600 million social services budget. She also said the county did not even know of the existence of one of ACAP's federal grants until a 2009 audit because the money flowed directly to Dillard's agency through a Citibank account.
"I'm not the one who is spending the money, I'm just paying the bills," Mendoza said Tuesday, her third day testifying to jurors at the Rene C. Davidson Courthouse in Oakland. Tuesday marked the 26th day of testimony in the corruption trial since jury selection began in October.
Mendoza grew defensive as Brendan Hickey, the lawyer representing Daniels, confronted her about a visit his legal team made to her office to talk about the case. Mendoza cut off the conversation after dialing up an inspector with the Alameda County District Attorney's Office, and told Hickey "we have to protect our side," the lawyer said.
Mendoza acknowledged the exchange, but repeatedly told Hickey, "you are twisting my words" and "you are twisting something to get back at me."
Defense attorneys have argued that the county government's dysfunctional finance system caused cash-flow problems at Dillard's agency, making it hard for her to pay vendors and her own staff even as ACAP's budget ballooned with federal stimulus money and other grants. They also say the county tolerated and facilitated a practice known as "reclassification" that allowed ACAP, when it ran out of one pot of money, to use another grant to temporarily fill that pot.
"Reclassification is not illegal" and a common accounting practice to make corrections or updates, Mendoza said, deflecting the blame back to Dillard and Daniels. "What's illegal is using someone else's money to pay your bills. ... Borrowing money from Paul to pay Peter is illegal, it's not right."