Raid seeks to prove City College misused funds DISTRICT ATTORNEY'S PROBE

ChronWatch_day.jpg ChronWatch; Philip Day, Jr, city college chancellor philip day , / HO ProductName Chronicle ProductName Chronicle ProductName Chronicle ProductName Chronicle ProductName Chronicle ProductName Chronicle ProductName Chronicle Ran on: 04-06-2007 Ran on: 04-17-2007 An unidentified person is carried out of Norris Hall at Virginia Tech, the second target of the gunman who struck there more than two hours after his first attack. Ran on: 04-17-2007 An unidentified person is carried out of Norris Hall at Virginia Tech, the second target of the gunman who struck there more than two hours after his first attack. Ran on: 10-09-2008 Philip Day, ex- City College chancellor. Ran on: 10-09-2008 Philip Day, ex- City College chancellor. Ran on: 05-07-2009 Ex-Chancellor Philip Day is being investigated on suspicion of diverting public funds to political campaigns. Ran on: 07-09-2009 Former Chancellor Philip Day quit in 2008. Ran on: 07-09-2009 Former Chancellor Philip Day quit in 2008. Ran on: 07-10-2009 Former Chancellor Philip Day was charged with misusing school funds. Ran on: 07-10-2009 Former Chancellor Philip Day was charged with misusing school funds. Ran on: 07-10-2009 Former Chancellor Philip Day was charged with misusing school funds. Ran on: 07-10-2009 Former Chancellor Philip Day was charged with misusing school funds. Ran on: 07-10-2009 Former Chancellor Philip Day was charged with misusing school funds. Ran on: 07-10-2009 Former Chancellor Philip Day was charged with misusing school funds. Ran on: 07-15-2009 Philip Day is accused of shifting college funds to political campaigns. Ran on: 07-15-2009 Philip Day is accused of shifting college funds to political campaigns. Ran on: 01-25-2010 Philip Day, former City College of San Francisco chancellor less ChronWatch_day.jpg ChronWatch; Philip Day, Jr, city college chancellor philip day , / HO ProductName Chronicle ProductName Chronicle ProductName Chronicle ProductName Chronicle ProductName Chronicle ... more Photo: The Chronicle Photo: The Chronicle Image 1 of / 1 Caption Close Raid seeks to prove City College misused funds 1 / 1 Back to Gallery

District attorney's investigators raided City College of San Francisco on Wednesday, seeking evidence that college officials had illegally spent public money on donations to education-related political campaigns.

A copy of a search warrant served on the college shows that investigators are scrutinizing the actions of former Chancellor Philip Day, who left the college last year to work for an education lobbying firm in Washington, D.C.

Investigators searched Day's former office, now occupied by Chancellor Don Griffin. The offices of Peter Goldstein, vice chancellor of finance, and Stephen Herman, dean of administrative services, also were searched, said an official who saw the searches under way.

Investigators were seeking documents concerning donations to the political campaigns of two city bond measures that benefited the college and two state initiatives that sought increased funding for community colleges, the search warrant says.

The Chronicle disclosed in 2007 that college officials had diverted $10,000 in public money to political donations for a $246.3 million college bond measure that San Francisco voters approved in 2005.

A county grand jury then began investigating Day and his aides on suspicion of violating state laws against misusing public funds and failing to make accurate reports of political donations, college documents show.

An internal probe ordered last year by City College's trustees found a continuing pattern of political fundraising abuses at the school. Some transactions appeared to violate state law, wrote lawyers for the firm of Renne, Sloan, Holtzman & Sakai, which conducted the investigation.

Day, now the head of the National Association of Student Financial Aid Administrators, could not be reached for comment Wednesday. In an interview last year, he denied that he had ever misused college funds or failed to report political donations accurately.

"That did not happen," he said at the time. "That is not true."

Martha Lucey, City College's dean of public information, said, "Any comment should come from the D.A."

Erica Derryck, spokeswoman for District Attorney Kamala Harris, declined to comment.

Matthew Siroka, an attorney for Goldstein, said the raid was needlessly disruptive.

"The college has bent over backwards to cooperate" with prosecutors, Siroka said. "Most of what was seized today were (copies of) documents that had already been turned over."

The search warrant indicates that investigators are focusing on these transactions:

-- A $10,000 donation to the 2005 bond campaign, made by a motorcycle driving school that leases a parking lot at City College. The school's president told The Chronicle that the $10,000 was a lease payment he owed to the college, but that Assistant Vice Chancellor James Blomquist told him to make it a donation to the bond campaign instead.

Blomquist later acknowledged steering the payment to the bond campaign, saying he hadn't realized he was doing anything wrong.

-- A $20,000 donation to the 2005 bond campaign, made by a cafe owner who had just won a contract to operate a coffee bar at the college. The cafe owner owed the money to the college, but it was given to the bond campaign, records show. Before the election, the donation was refunded and the cafe owner paid the money to the college, Day said.

-- $30,000 in donations to the same bond campaign, made by two women with ties to the operator of vending trucks that sold food on campus. The donations were made shortly after the vendor obtained a new five-year contract, records show. Day said the food vendor was simply a friend of the college.

-- More than $28,000 in donations to two 2006 state education measures, made by the college's nonprofit foundation. Unlike the college, the foundation was legally permitted to make political donations.

According to the report by the college's internal investigators, the $28,000 was owed to the college by PepsiCo on its contract to sell beverages on campus.

Day, through his aide Herman, instructed PepsiCo to make the payments to the foundation, which then donated the money to the political campaigns, the internal report said. At the time, Vice Chancellor Goldstein expressed discomfort with the PepsiCo transaction, apparently for legal reasons, the report said.

-- An additional $10,000 in donations to the same state measures, also from the foundation. According to the internal investigation, Day used $7,000 from the college bookstore and $3,000 from the cafe owner who operated the coffee shop to finance this donation, but had it made in the foundation's name.

At Day's direction, the foundation repaid the $10,000 to the college in 2007, after The Chronicle began reporting on political fundraising abuses at the college, the internal report said.