Business Group to Lose Chief

Valley Economic Development Center President John Rooney is preparing to leave the agency he brought to prominence, and the center board is expected to ask agency Vice President Wilma Berglund to take over as acting president.

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

Sources said the board is expected to ask Berglund, who has been with the small-business development agency since 1991, to take over as acting president. Rooney’s departure was described as imminent. He was on vacation and could not be reached for comment Wednesday.

However, a source close to Rooney said he “feels it’s time . . . 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 the agency, despite increasing friction with some board members. But the source said Rooney had grown weary of the infighting.

For months, many board members and staff members have traded accusations about Rooney’s handling of the agency, which started in 1976 with a budget of $2,363 and has since become a key player in the business assistance world with a $2.8-million budget.

One source of tension was a deal, brokered by the center, in which a Japanese businessman invested $1.2 million in a Canoga Park business. The deal netted a $5,700 commission for Rooney and a $31,000 commission for another center 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 board 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 ex-board chairman Honda was Honda’s decision to accept a $150,000 construction project from a small business owner who got a $75,000 loan through the VEDC, according to center officials who spoke on condition of anonymity.

Honda confirmed accepting the construction work, but said there was nothing inappropriate about the arrangement.

Honda said none of the board members raised questions with him about the deal last year, when he began doing office work for the Inglewood-based orthodontist.

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 center 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 board members said.

At the least, board members said, such deals should be revealed to the full board.

Board member Wayne Adelstein, a business newspaper publisher who receives about $400 a month from the agency for work he does for it, said maybe the new policy should go further.

“Maybe disclosure is not enough,” said Adelstein, who publishes the Valley Business Journal. “Maybe not having any type of nexus is what we’ll come up with.”

Meanwhile, the board was preparing to issue a news release “within the next few days,” detailing the latest developments at the troubled agency.

Three sources with knowledge of the matter, including Honda, said the board plans to ask Berglund to take over as acting president when Rooney leaves.

But Berglund said the board had not discussed the matter with her.

“The staff is not privy to any information,” said Berglund, who has been vice president since 1994 and often fills in if Rooney is away. “I really have no idea what’s going on.”

Asked if she would want the job on a more long-term basis, Berglund said “I don’t know, I never thought about it.”