California IN BRIEF : SACRAMENTO : Cal Regional Falls Under State Scrutiny

A whistle-blower’s accusations have led to a state investigation of an agency that guarantees millions of dollars in state-backed loans to small businesses throughout the Bay Area. State officials who oversee the agency want to know how a house that was once collateral on a loan ended up owned by the board chairman of the agency, the California Regional Urban Small Business Corp. For Richard Nelson, director of the state’s Office of Small Business, it was the last straw for the agency, also known as Cal Regional. Nelson said he has forced the resignation of the entire board of directors. and a staff shake-up of the agency. Records show the agency has a history of alleged conflict of interest among its top officers going back at least seven years. Former Cal Regional officials who are the subjects of the investigation say they’ve done nothing wrong.