The executive director of the San Gabriel Valley Council of Governments surrendered to a judge Friday after prosecutors charged him with four felonies for obtaining grants that allegedly benefited a private firm he owns.
Nicholas Conway, 60, was placed on leave last week after search warrants were served by the district attorney’s office. After surrendering, he was released on $100,000 bail by Los Angeles County Superior Court Judge Shelly Torrealba.
In the complaint charging Conway with the four conflict-of-interest felonies, Deputy Dist. Atty. Dana Aratani alleges that Conway exploited his position as head of the joint powers authority, which coordinates efforts among 31 cities, three water districts and county supervisors for the region. The charges cover a period between 2008 and 2011 and relate to grants involving the local watershed, an energy initiative and energy conservation.
Prosecutors allege that Conway violated a state law barring public officials from having a financial interest in any contract made by them in their official capacity. Conway owns Arroyo Associates Inc., a firm he launched in 1990 that manages the council.
Investigators served the search warrants June 6 at Conway’s home and his firm’s Alhambra office.
Under an agreement between the council and Arroyo, the firm got more money to manage specific state and county grants, which Conway obtained as executive director, prosecutors said.
In one fiscal year, the grant agreements added $143,000 in charges by Conway to the council, Aratani said.
In 2006, Conway was investigated for conflict of interest, but no charges were filed, prosecutors said.
Friday’s charges came after the D.A.'s Public Integrity Division received a complaint about Arroyo from San Dimas resident Gil Aguirre, although prosecutors would not confirm that the complaint sparked the investigation. The council board recently agreed to pay a $50,000 settlement to Aguirre over its alleged failure to comply with his California Public Records Act request and the state’s open meetings law.
Walnut Councilman and former San Gabriel Valley Council of Governments President Tom King said he publicly expressed concern early on about the financial relationship between the agency and Arroyo Associates and as a board member had refused to approve the budget.
“Every time he got a grant he’d get more money,” King said. “When I questioned it, he wouldn’t show me the paperwork and threatened to sue me.” King said Conway’s firm earned nearly $800,000 annually for running the agency.
Two audits of the agency’s grants by the California Department of Transportation discovered grant mismanagement and an inadequate procurement process. Caltrans asked the council to return $89,262 of a $250,000 Gold Line grant. One of the audits, in September 2011, also found that the agreement between the council and Arroyo Associates created a conflict of interest.