Duffy Gives Up Over $1 Million of Secret Fund : Politics: Sheriff writes check under court order. Today he must detail for judge what was spent from the account he hid from county supervisors.

Under court order, Sheriff John Duffy turned over more than $1 million Tuesday that had been confiscated in drug busts and hidden in a secret bank account he created to keep control of the money away from the county Board of Supervisors.

Duffy wrote a check for $1,044,429.42 on an account he opened two months ago at the main office of Security Pacific National Bank in San Diego and turned it over to the Superior Court clerk Tuesday afternoon, where it was deposited into the court’s trust fund.

Duffy also is under order by Superior Court Judge Harrison Hollywood to provide details today on how he spent any other money deposited in the account.

Duffy has refused to disclose how much he spent or what he purchased, despite two requests from The Times under the federal Freedom of Information Act and the state Public Records Act.

Hollywood recommended during a Tuesday court hearing about the drug funds that retired Superior Court Judge William Yale mediate the matter among Duffy, county supervisors, county counsel and Jim Roache, who was elected sheriff last week after being highly critical of Duffy’s management style.

At issue is who controls the money and property that law enforcement agencies seize from drug dealers and other criminals. Last summer, the county Board of Supervisors voted to take control of the money. Duffy argued that he should decide how the money is spent because the Sheriff’s Department must comply with rigid federal guidelines.

Until he lost control of the money, Duffy had been dutifully depositing federal drug funds into the county treasury. As of June 30, the department had collected $3.7 million, spent $1.8 million and made plans for $270,092.

Since that time, Duffy had collected at least $1.044 million in a secret checking account, the amount that he turned over Tuesday. Duffy has said that he spent some of the money received since June.

Sheriff’s spokesman Glenn Revell said Tuesday that Duffy still believes the money is his to spend.

Duffy, he said, “is just looking for a resolution by the court to this disagreement between the board and himself” and is willing to accept arbitration. Although Duffy was ordered to write the check last Friday, he was the only Sheriff’s Department official authorized to sign the money over to the court clerk and was out of the office until Tuesday.

Supervisor Susan Golding said Tuesday that board member George Bailey has agreed to represent the county in mediation.

The amount of money that Duffy had amassed took county officials aback.

“I think we were all surprised at how large the amount was,” Golding said. “I don’t know of any other governmental funds where an elected official can spend at will or with no accounting whatsoever.”

Golding said she is curious as to how much Duffy spent and wants county auditors to check with the U.S. attorney’s office to make sure that Duffy’s figures match the amount the federal government distributed.

Duffy opened a checking account in the department’s name after the board voted in June to require that he get the county board’s approval before any money was spent. Despite a county ordinance that requires deposits be made into the county treasury, Duffy diverted the money to Security Pacific.

When news of the account surfaced last month, county auditors asked the district attorney’s office to investigate. Dist. Atty. Edwin Miller declined to begin a criminal investigation and suggested that either the county or Duffy take the matter to court.

Last week, the day after Duffy accused Golding of masterminding the move to take control of the drug funds because the Sheriff’s Department helped investigate her financier husband, Richard Silberman, the supervisors voted to sue Duffy to regain the money.

County attorneys, fearing Duffy might spend the money before he retires from office in early January, asked last Friday for a temporary restraining order that would keep Duffy from touching the money. Duffy will leave his position after 20 years as the county’s sheriff.

Judge Hollywood ruled that Duffy could not spend money from the secret account nor could the county deposit the money into its treasury.

On Tuesday, Hollywood granted the Sheriff’s Department a temporary restraining order until today’s hearing that prohibits the county from spending any drug money Duffy had deposited into the county treasury before the dispute.

The U.S. attorney general’s office in San Diego said it distributed $318,865 to Duffy’s department between July 1 and Sept. 30. Last week, the office said it had distributed an additional $361,704 for a total of $680,569. It is unclear where Duffy got the rest.

“This exceeds the highest amount we had anticipated,” said county spokesman Bob Lerner. “We estimated $600,000 or $700,000, maybe $800,000, but there was never any suggestion that it could have been over $1 million.”

Assistant County Auditor William J. Kelly said the county could have earned 9% interest by keeping the money in the county treasury. Duffy probably earned 5% by keeping the money in a checking account, he said.

“We could have earned $250 a day on $1 million in the treasury,” Kelly said. “I would speculate that (Duffy) isn’t earning nearly that much.”

Golding said she found it odd that only Duffy was authorized to sign the check that went to the court clerk Tuesday.

“There wasn’t even someone authorized to co-sign,” she said. “I guess that shows how much he trusts the people he works with.”