Renewal Agency Director Resigns to Dispel Cloud

Jerome Winstead, head of the Industry Urban Development Agency, said he is resigning his job to dispel the “climate of uncertainty” he has worked under since the FBI began an investigation into municipal corruption here.

“What I’ve done is only common sense in the light of the total environment we have been working under,” Winstead said.

Winstead, 43, said his resignation from the $79,200-a-year job will become effective June 30. He said that date comes at the end of the fiscal year and at a natural break in the agency’s calendar.

As executive director of the IUDA, Winstead oversaw the operation of the largest of four city redevelopment agencies. The IUDA was one of two agencies, in addition to the city, that was defrauded in a $1.35-million kickback scheme involving Industry Hills Exhibit-Conference Center construction contracts.

The 3-year-old federal investigation led to the indictment and conviction of seven people last year in connection with the kickback scheme. Winstead was not implicated.

Winstead said he has asked that the city provide him with legal counsel in connection with the federal inquiry. He said that he retained his own attorney last year and asked city officials to hire counsel for him then, but that his request was denied because he was not considered a target of the investigation.

Winstead said he made his request for counsel to remove any potential financial liability he might face as a result of the investigation. He would not elaborate.

The City Council has allocated $180,000 to retain legal counsel to represent Mayor John Ferrero, City Manager John Robert Baker and city Treasurer Phyllis Tucker, Ferrero’s sister. Sources close to the FBI have identified Ferrero and Tucker as the current focus of the investigation into allegations that thousands of dollars in work was done on private residences at city expense.

City Atty. Graham Ritchie said the City Council moved to retain counsel for Ferrero, Baker and Tucker after federal investigators made attempts to contact them to seek information about their work-related duties. Winstead said he has not been contacted by the FBI.

Winstead refused to say whether the city’s failure to provide him with legal counsel contributed to his decision to resign, but added:

“I think that representation should have been provided to me in the past, and I’m asking for that to occur now. It seemed to me foolish not to bring legal counsel on board (for me) to keep (the attorney) informed on the evolution of events, instead of informing him at the last moment with something coming from left field.”

Ritchie said that at Winstead’s request he will schedule a meeting with Winstead’s attorney to discuss whether the city will provide him counsel.

Winstead assumed his post in 1979, after serving as a director and financial officer of National Engineering Co., the city’s former civil engineering and planning consultant agency which lost its contracts after an employee was convicted in the kickback scandal.