Head of Valley Economic Aid Agency to Quit

Valley Economic Development Center President John Rooney is preparing to leave the troubled agency he helped lead to prominence. Agency Vice President Wilma Berglund is expected to take over as acting president.

Rooney, who has been president of the nationally recognized small-business assistance center for eight years, was said to be working out the terms of his departure with the organization’s board, which is itself stinging from a string of recent resignations, including that of David Honda, its longtime chairman.

Sources said the agency’s governing board is expected to ask Berglund, who has been with the VEDC since 1991, to take over after Rooney’s departure, which was described as “imminent.”

Rooney was on vacation and could not be reached Wednesday for comment. However a source close to him said he “feels it’s time for him to move on to other challenges and for new leadership to unite the VEDC.”

Less than a month ago, Rooney said he had no intention of leaving his $120,000-a-year post despite increasing friction with some board members. But the source said Rooney had grown weary of the infighting. For months, many board and staff members have traded accusations over Rooney’s handling of the organization, which was formed in 1976 with a budget of $2,363. It has since become a key player in the business assistance world and has a budget of $2.8 million.

One source of tension was a deal brokered by the VEDC in which a Japanese businessman invested $1.2 million in a Canoga Park company. The deal netted a $5,700 commission for Rooney and a $31,000 commission for another VEDC worker, Jim Jacobs, who worked on the project.

Even though the board approved the deal and knew of the fees to be paid to Jacobs, some members felt it was inappropriate for Rooney and Jacobs to reap such benefits when the agency had to take out a line of credit to pay bills.

One of the issues dividing Rooney and Honda was Honda’s decision to accept a $150,000 construction project from a business owner who got a $75,000 loan through the VEDC, according to VEDC officials who spoke on condition of anonymity. Honda confirmed that he accepted the construction work with the VEDC client but said there was nothing inappropriate about the arrangement.

Honda said no board member raised questions with him about the deal last year, when he began doing work on the offices of an orthodontist in Inglewood. But he acknowledged that he did not formally discuss it with the board until three or four months ago, when the issue was raised by Rooney. Honda noted that other members of the all-volunteer board do work for the VEDC and are paid out of agency funds.

Several board members said the board needs to reexamine its policy governing potential conflicts of interest. The board’s attorney, James Morris, has drafted a proposed policy revision, which the board is reviewing, several members said.

The board is preparing to issue a news release detailing the latest developments at the agency.