FBI Clears Montijo; Finds No Wrongdoing

Federal investigators have found no evidence that the former executive director of the San Diego Housing Commission committed any criminal violations in connection with the renovation of a dilapidated apartment complex and a second deal involving the purchase of the commission’s new headquarters.

An 18-month investigation into allegations of wrongdoing against Ben Montijo unearthed “no instances of prosecutable federal offenses,” said a spokesman for the FBI, which conducted the probe in conjunction with the U.S. Department of Housing and Urban Development.

The U.S. attorney’s office has reviewed the FBI’s findings and likewise found no signs of wrongdoing that would merit prosecution.

“We looked at allegations of bribery, of false statements, of kickbacks, of favoritism and a host of other things involving almost every aspect of the Housing Commission over a considerable period of time,” FBI spokesman James Bolenbach said. “We did not find any criminal violations.”

The Housing Commission ousted Montijo from his $79,500-a-year job in February, 1987, after news accounts raised questions about his handling of a bid to renovate the Island Gardens Apartments, a 122-unit complex in Southeast San Diego.

In failing to renew Montijo’s contract, commissioners and the City Council, which ratified the vote terminating Montijo’s eight-year tenure in San Diego, cited an internal investigation that found the housing official provided “extraordinary assistance” to the apartment project developers and committed other irregularities.

Montijo, 48, is now the executive director of the Housing Authority in Kansas City, Mo., and he reacted happily Wednesday when contacted about results of the FBI investigation.

“I’m not surprised by the results because there have been 47 other investigations that found the same thing. But I am very pleased,” Montijo said. “I hope that one thing, above all, comes out of this, and that is that the council will be fair and objective in the future and let these investigations run their course before they take action against someone.”

Montijo added that he intends to file a lawsuit against the Housing Commission within the next month, claiming wrongful termination and breach of contract. He said an administrative claim he filed against the commission in February was rejected last week, setting the stage for litigation.

‘Reputation Damaged’

“My main objective is that I think my credibility and reputation were damaged and I want to dispel the misconceptions out there,” Montijo said. “If there are monetary damages (awarded in the case), I will donate them to charity.”

Although it focused largely on the Island Gardens deal, the FBI investigation was actually launched in June, 1986, well before controversy surrounding that transaction emerged, Bolenbach said. Federal investigators initiated the probe in response to complaints from numerous sources, including the San Diego Housing Coalition, a watchdog group, Bolenbach said.

Initially, the investigation was a joint effort by the FBI and the federal Inspector General’s Office. But the FBI did the lion’s share of the work and wrote the final report because it has agents in the area, according to Richard Fix, the Regional Inspector General for Investigation in San Francisco.

Fix said he had not seen the FBI’s report and could not comment on its conclusions. He said that it was unlikely any further investigation into allegations of wrongdoing would be pursued by federal officials.

“It could be that HUD officials will decide to take a look at administrative (improprieties), but unless there is some irregularity apparent in the FBI report, it’s doubtful that we’ll do any more looking,” Fix said. “We’ll close our investigation if the report has addressed everything.”

Focus of Inquiry

FBI officials said the inquiry, which was wrapped up in December but only released publicly this week, covered a wide array of allegations but centered on charges of misconduct in two transactions--the rehabilitation of the Island Gardens Apartments and the relocation of the Housing Commission to new offices at 1625 Newton Ave.

In the office deal, questions included why the commission gave a real estate developer a $1.5-million low-interest loan to buy the Newton Avenue building, which was later leased to the agency. A review by the federal General Accounting Office found the deal broke no laws but concluded Montijo and his staff “engaged in a number of questionable practices” and exceeded their authority by failing to seek City Council approval of the transaction.

The FBI found no criminal wrongdoing, Bolenbach said.

There were several controversial elements of the Island Gardens deal. First, the commission bought and held onto the complex for nine months so that the developers--a partnership called Conruba, which includes former state Coastal Commissioner Gilbert Contreras--could line up financing to purchase and renovate the project. In addition, the commission loaned Conruba $700,000, backed the developers’ purchase with $1.3 million in credit and ensured that Island Gardens qualified for a federal rehabilitation program that guarantees substantial rents for 15 years.

Other questions surrounding the deal concerned the commission’s failure to properly advertise the availability of the federal rehabilitation program to other property owners, as required under HUD guidelines. Also, Contreras hired Montijo’s teen-age son to work briefly on the project for $600 a week, which the housing director insisted did not represent a conflict of interest.

HUD Investigation in 1987

In January, 1987, HUD officials announced they were launching an investigation into the deal, which one HUD administrator said appeared to show “favoritism” to the developers. HUD officials said they opened the inquiry after the commission refused to release its Island Gardens file for review.

Stung by the revelations, housing commissioners also decided to initiate an investigation of the deal. Their attorney concluded that Montijo was not guilty of favoritism but had provided “extraordinary assistance” to the developers and had failed to seek final and binding approval from commissioners to buy and hold the Island Gardens property for the partnership.

Bolenbach said the FBI investigators scrutinized “every allegation we got and didn’t leave any dangling.” He said there was no criminal wrongdoing apparent in the Island Gardens deal, noting that it was sewed up before the partnership applied for any federal rehabilitation funds.

The hiring of Montijo’s son likewise did not constitute a violation of federal statutes, and allegations that the commission illegally failed to advertise the rehabilitation program to other interested property owners did not hold water either, Bolenbach said.

“Basically, a lot of people complaining this was not done according to regulations just were not aware of the what the regulations are,” Bolenbach said. Moreover, “a lot of the people who made these allegations could not substantiate them.”

In an interview Wednesday, Contreras, a partner in the Island Gardens transaction, said he was relieved the investigation is over but regretful that his partnership’s effort to address housing needs in a low-income area had resulted in such a brouhaha.

“I am glad this has been made public because it tells the entire community something we’ve been aware of all along, that there was no wrongdoing on the part of Mr. Montijo or ourselves,” Contreras said. “It cost us a lot of pain and aggravation, when all we wanted to do was demonstrate a commitment to help a community that we were born in.