Recent news reports have painted a worrisome picture of free-spending and taxpayer neglect at San Diego Data Processing Corp., the city-owned information-technology provider run by a high-flying friend of computer-geek City Councilmember Jim Madaffer.
Madaffer himself this week sounded a clarion horn on the matter, urging both the corporation's board and City Manager Michael Uberuaga to examine the company's spending practices.
"In this day and age of tight budgets and the need for extreme fiscal constraint," Madaffer said, "it is inconceivable to me that a taxpayer-funded city agency could justify spending money on lavish parties, alcohol and other unjustifiable expenses. This practice is completely unacceptable."
But doth Madaffer protest just a wee bit too much? After all, even before being elected to the San Diego City Council in 2000, he was all too familiar with the data-processing company and Roger Talamantez, who first joined the firm in 1996 and now as president and CEO rules the place like his own personal fiefdom, former employees say.
City-attorney candidate Mike Aguirre, who has made transparent government a central theme of his campaign, called on Madaffer to "come clean" on his relationship with Talamantez and the corporation and any favors he might have received over the years. Madaffer's city council website notes that he once served as president and chairman of San Diego Data Processing Corp.
"It's important for Councilman Madaffer to make a full disclosure-just clear the air," Aguirre told CityBeat. "He should make a complete accounting of all gifts, anything that he's received of value. He just needs to clear the air."
In local-television broadcasts, Madaffer has appeared like a deer caught in the headlights, his face stoic and his eyes big. While he exudes a sense of personal outrage, the reports question his own motives, alleging that a company credit-card number somehow found its way into Madaffer's council office. It was subsequently used, one report claimed, to purchase a wealth of electronic gear, such as Palm Pilots and an associated game pack, a digital music player, a digital camera and other computer equipment.
In that report, Madaffer said the game pack had been returned but did not say who had purchased it. The rest of the equipment, he explained, has practical use in his council office.
Nevertheless, both Aguirre and former San Diego Data Processing Corp. board member Phil Thalheimer pressed this week for a wider, more encompassing investigation into the 25-year-old company-and greater oversight by the City Council.
"The abuses discovered by the media must be investigated further by agencies outside the city," said Thalheimer, who's running to unseat first-term Councilmember Scott Peters in the District 1 March primary on a platform of reducing fiscal mismanagement citywide. "The cozy DPC and City Council relationship calls for a grand-jury investigation.
"DPC is like a rogue elephant. And Roger Talamantez and the City Council have been trampling the taxpayers too long."
Thalheimer has been howling about the corporation's squirelly finances for years, and likely has gained some political traction in his race with Peters and local activist Kathryn Burton. At a news conference this week in front of the company's Santa Fe Street headquarters east of Mission Bay Park, Thalheimer reiterated his attempts over the years to bring reform to San Diego Data Processing-first as a management assistant in 1987 and through his ultimate removal as a board member in a 2002 purge instigated by Talamantez and approved by the City Council.
He noted how a policy he had written to limit travel pay and require receipts for expense reimbursements had been ignored by company executives, and how he had been overruled when he suggested greater city oversight of the company or when he recommended that the company not charge the city to analyze whether there had been over-billing.
As a board member, Thalheimer said he opposed Talamantez's prized pet project-integrating the city's unwieldy computer network with so-called portal technology-arguing it was a technology "looking for a problem" that the city didn't need. The technology, no longer a top city priority, continues to support the websites of Madaffer, Mayor Dick Murphy (reportedly wowed by a demonstration) and the city's Environmental Services Department but has failed to catch on in municipal computer circles.
Apparently, the data-processing bashfest has caught on. Candidate Burton issued her own proclamation, calling the latest allegations of fiscal gluttony "just another example of obscenely bloated budgets and publicly supported salaries of special interests tied to the city government.... I'm sure this is just the tip of the iceberg."
Burton's campaign manager, Ian Trowbridge, is rooting around City Hall and courthouses to prove just that. Trowbridge's connection to Data Processing is an intriguing one. His late wife worked there for 12 years as an analyst. He recalled a company that seemed to be fairly cleverly devised to keep city IT workers from quitting in order to take higher-paying jobs in the private sector.
The city gained quite a bit of notoriety for the corporate creation in 1979, an era that was unfamiliar with the term "outsourcing." Nowadays, outsourcing is such a common and more affordable practice-not to mention the wide availability now of off-the-shelf software targeted at government agencies-that the existence of a city-owned technology clearinghouse seems overreaching, critics say.
And with a 2003 budget of $68 million and 300-plus employees, it's a bit out of control, according to city auditors.
In a Jan. 9 interim report to company board members, the city auditor's office found lax accounting for expenses, widespread alcohol purchases on the taxpayer's dime (including multiple $25 shots of tequila), exorbitant hotel bills and golf fees during senior management "retreats" and membership dues for Talamantez to join the exclusive University Club downtown.
The auditor reports that Talamantez has already vowed to extinguish some of the excesses. Booze purchases, for example, will no longer be reimbursed. Oh, and spouses will no longer receive free airfare to attend out-of-town junkets with their significant others, as one did in 2002 to something called the Metropolitan Information Exchange Conference in Philadelphia, to the tune of $1,075. And no more lavish employee-recognition parties-one organized to heap praise on Talamantez was ultimately cancelled. Talamantez did not respond to a request by CityBeat for comment.
In all, San Diego Data Processing Corp.'s board faces a roster of 14 expense-restricting recommendations made by the auditor's office to get its financial house in order. The board next meets Jan. 22, and for now Madaffer-himself facing a re-election challenge-is talking tough.
"Clearly, we'll continue to monitor the situation from this vantage point and if further action is necessary, your honor, I will contact you to bring something to the Rules Committee, if for some reason the board is not able to correct these issues that we've heard about," Madaffer told Mayor Murphy during Tuesday's City Council meeting.
But critics like Trowbridge aren't going away. He smells council collusion in ridding the corporate board of financial reformers and is scouring San Diego Data Processing contracts for links to impropriety.
He is curious about a comment Madaffer made to the previous company board in May 2001 to "have some guts" about embracing Talamantez's IT vision, to "quit micro-managing" the CEO and "to make sure that they provide support to the CEO to make the decisions that he needs to make."
Once Madaffer orchestrated the board purge in 2002, Trowbridge alleged, Talamantez was allowed to pursue many more contracts on his own. Some of those contracts, including two with Talamantez acquaintance and portal-technology booster Jonathan Ames, whom he had met at a technology conference in Los Angeles, cost hundreds of thousands of dollars and produced, according to Trowbridge, no tangible results.
In addition, the tech company was recently sued by phone giant SBC, which alleged shenanigans in a bidding process that awarded a telecommunications contract to competitor-and current company provider-AT&T.
Trowbridge also has questions about Madaffer's own business dabblings in the information-technology frontier and questions, first raised last year, about a fundraiser for Madaffer hosted by Talamantez. A spokeswoman confirmed that Madaffer owns an Internet-service company called cyber-ace.com. While this company is listed on Madaffer's economic-interest statement, another-Madaffer Technologies LLC-is not.
The spokeswoman said the limited liability company was formed "in name only-to reserve the name." She said the company has "no activities, no bank account and no income."
But as Aguirre asked, "Why go to all that trouble? Councilman Madaffer, just clear the air."