Duffy Blames Golding in Defending Drug Fund Use : Secret account: Sheriff says prosecution of supervisor’s husband justified keeping wraps on money. Bilbray calls that a cheap shot.

San Diego County Sheriff John Duffy has accused Supervisor Susan Golding of persuading her fellow board members to take control of drug funds from Duffy this summer because his department participated in a criminal investigation of her husband, Richard Silberman.

Duffy’s assertions are contained in a two-page letter The Times received Monday in response to the newspaper’s request for information about the sheriff’s secret bank account, which Duffy established to bypass the supervisors.

In his letter, Duffy refused to make public details of the secret fund because the money has been deposited in a private bank account, whose records are not public.

“While the San Diego County Sheriff’s Department is a public agency, the actual records are generated by the bank,” Duffy wrote. “The funds contained in the account are not county funds and are not subject to any audit by the county.”

Dist. Atty. Edwin Miller said Friday that he would not conduct a criminal investigation of Duffy for establishing the secret fund. County supervisors are scheduled to meet in closed session today to determine whether to file a civil lawsuit against Duffy.

Golding did not return calls to her office Monday, but Supervisor Brian Bilbray called Duffy’s remarks “the cheapest shot I’ve heard in a long while. John Duffy is stooping to new lows.”

He said Duffy knows that Golding, although supportive of a plan to take control of the funds, did not have to persuade the other supervisors to control spending.

Some other county officials said Monday they were astounded by Duffy’s explanation about the private bank account. They said county government puts millions of dollars in banks and still must account to the public as to how it is collected and spent.

Duffy failed to deposit more than $300,000 seized in drug raids--called asset-forfeiture funds--into the county treasury, as required by law, and instead set up a separate, secret bank account for the money. He said in his letter to The Times that he consulted with the U.S. attorney’s office, the U.S. Justice Department, his own private attorney and sheriffs in other counties before opening the account--sometime after June 30, when supervisors prohibited him from spending the money without their approval.

Duffy also used nearly $70,000 in drug seizure money to pay an attorney to defend him in a civil lawsuit filed by six of his deputies, which the county has asked him to reimburse.

In his letter, Duffy reiterated his position that members of the Board of Supervisors were wrong when they voted in June to take control of the money. He said the board jeopardized receiving further federal drug money because it decided to pay for jail security improvements, which he said violates federal guidelines.

Although Duffy has singled out Golding in the past for taking the lead in the board’s action to control the drug fund spending, he has never before accused her of retaliating against Duffy for his role in investigating her husband.

“The simple reason for establishing this interest-bearing checking account was because of the foolish course of action engaged in by the Board of Supervisors at the insistence of Supervisor Susan Golding, who is angry with the U.S. Justice Department and with me because of a joint investigation resulting in the arrest and conviction of her husband,” Duffy wrote.

“I understand her personal family feelings, but following her course of action threatens the entire participation of the Sheriff’s Department in the Federal Asset Forfeiture Program and severely weakens our ability to investigate crime and respond to public safety needs within the county.”

The FBI arrested Silberman in April, 1989, on suspicion of laundering money that undercover agents told him came from Colombian narcotics trafficking. Members of the San Diego Police Department and San Diego County Sheriff’s Department participated in the investigation, an FBI spokesman said at the time.

Silberman, who was sentenced to 46 months in federal prison six weeks ago, had been charged originally with seven felony counts in an alleged scheme to launder $300,000 in cash that an undercover FBI agent had portrayed as Colombian drug profits.

Duffy and the board clashed over use of federal drug funds in May, when Duffy made a request to use $450,000 for computers, and board members insisted that it be used for jail security measures.

At the time, Duffy warned the supervisors that they were overstepping their legal authority in deciding how the money should be spent. He never mentioned setting up a separate account but wrote the supervisors that he would “undertake whatever action I deem appropriate to scrupulously adhere to all of the rules applicable to the spirit and intent” of federal guidelines.

Bilbray said he was continually amazed by Duffy’s actions.

“Anybody with half a brain in his head would realize that it’s better to spend drug money to keep drug abusers from escaping from jail than spending it on attorneys’ fees,” Bilbray said.

He said Duffy has never been reluctant to challenge supervisors and wonders why the sheriff was so secretive about the account.

“He was threatening to do this, shooting his mouth off, and then he did it secretly,” Bilbray said. “He didn’t have the guts to do it publicly. He had to get busted by the county auditor. It makes him look like a kid with his hand in the cookie jar.”

County officials said that, although they may file suit against Duffy, the problem may be easier to resolve through Duffy’s replacement. Assistant Sheriff Jack Drown and Sheriff’s Capt. Jim Roache, who are running in today’s election to replace Duffy, both have pledged to make the secret expenditures public.

In his letter, Duffy said the deposits to the account and the interest it has accrued have been “substantial,” and the disbursements “minimal.” He said that, of the money he has spent, almost all has gone to the district attorney’s office and to other local law enforcement agencies that have participated in drug busts.

“The account is not intended to be a secret,” Duffy wrote. “And, once the legal questions have been answered, I am perfectly willing to make additional information public.”

The Times asked for a breakdown of the secret fund under the California Public Records Act and the federal Freedom of Information Act, which require that federal, state and local agencies make most financial records public.

The Sheriff’s Department established the asset forfeiture fund in September, 1986. Through last June 30--after which time Duffy started his secret account--the department collected $3.7 million, spent $1.8 million, plans to spend $270,092, and still has $1.6 million.

Of the $1.8 million, the department has spent money for portable radios, video production equipment, computers, a portable copier, a laser printer, and other items.

According to the sheriff’s records, Duffy has paid the law firm of Martin J. Mayer $66,336 to defend him in a civil lawsuit against deputies disciplined as part of the so-called “Rambo Squad” at the El Cajon jail. Duffy has agreed to pay an additional $3,262 but none of the money has come from the secret fund, records show.

Federal guidelines say only that seized drug assets be used for “law enforcement purposes only.” Many agencies use it in a variety of ways, most having to do with drug enforcement.

Federal officials said that, although they administer the money, they don’t monitor how it is spent.

Supervisor Bilbray said Duffy must make public the particulars of his secret fund.

“There better well be an accounting of what money a county employee is handling,” Bilbray said. Duffy “is requiring county employees to sign documents saying what money is in the (asset forfeiture) account. Those employees are signing cash statements under penalty of perjury, and now those statements don’t reflect the correct amount of asset seizures. We have a right to know what’s going on.”