OAKLAND -- A man who once managed anti-poverty grants for an Alameda County public agency denied this week that he misappropriated money, testifying that he "never stole a thing" from the Alameda County Associated Community Action Program.
Paul Daniels is on trial accused of conspiring with his wife, Nanette Dillard, to steal money from the now-dissolved public agency by misusing a $500,000 federal grant meant to help low-income East Bay residents save up for a home or further their education.
Daniels was a grants manager and Dillard the executive director of the agency, known as A CAP, before the board of directors fired them and dissolved the nearly 40-year-old organization in 2011.
After weeks of listening to former A CAP employees and county officials testify against the couple in a criminal trial in Alameda County Superior Court, Daniels this week had his first chance to give his side of the story.
"I spent an honorable time at A CAP," Daniels told jurors in the Rene C. Davidson Courthouse in Oakland. "My only and primary concern was the people we served."
Daniels spent hours Thursday debating with Alameda County Deputy District Attorney Greg Dolge over the role Daniels played in managing a 5-year federal grant that prosecutors allege he and Dillard knowingly misused.
Daniels repeatedly professed to have little involvement, arguing "it wasn't my grant" and that he didn't know all its rules despite keeping its handbook and account statements on his computer.
Awarded to the agency in 2005, the Assets for Independence grant matched the savings accounts of low-income residents to help them save up for a goal that could lift them out of poverty, such as buying a house or starting a business. All but 15 percent of the grant money was supposed to go directly to the individual savers, according to written rules presented as evidence in the trial, but prosecutors have accused A CAP of using too much for administrative expenses such as payroll.
At the crux of the trial is how A CAP, when it was running low on money, sought to temporarily pull money from one fund to fill another. Defense attorneys have suggested that the transactions, which likely ran afoul of the grant restrictions, were the fault not of A CAP but of its fiscal sponsor and bookkeeper, the Alameda County Social Services Agency.
Daniels said Thursday that the county government had "ultimate control over ACAP's finances, over whether things get paid or not get paid. ... It is my belief that (the county) should know what is allowable or what is not allowable."
Dolge, the prosecutor, questioned that blame-shifting, asking how Daniels, an experienced fiscal manager who went to grant training sessions and was married to the executive director, could not have known the agency was breaking rules.
Daniels also this week defended his mysterious overnight visit with Dillard to the A CAP headquarters in Hayward in the early morning hours of Feb. 3, 2011, after a contentious late-night meeting during which the board of directors -- made up of 13 politicians representing cities around Alameda County -- put Dillard on administrative leave.
It was a "devastating evening" and Dillard merely wanted to pick up her belongings without facing her staff the next morning, Daniels said.
"Nanette was very angry and so she felt the need to get her things," Daniels said. "She felt humiliated by the experience ... and she didn't want to feel any more humiliated."
Surveillance cameras and electronic key records documented the couple carting file boxes out of the Hayward office. An interim A CAP director and Hayward police confronted Daniels about it a few days later and ordered him to return the boxes.
"I did not think I was stealing A CAP property," he told jurors Wednesday. "My understanding is she went to get her things. That's what she told me, and I believed her."
Dillard could also take the stand as the trial -- originally scheduled to end this month -- drags into February. Witnesses began testifying in November and jury selection began in October.