LOS ANGELES — The California agency finance director wanted in connection with the disappearance of $1.3 million in bond proceeds has resigned.
Clarke Howatt, director of financial services for The ABAG Finance Authority for Nonprofit Corporations, submitted his resignation via email Thursday, said Brad Paul, deputy executive director of the Association of Bay Area Governments.
Howatt allegedly "executed a sophisticated scheme to defraud the agency by creating illegitimate documents, creating false identities and deceiving the (finance authority) board and bank trustees to wire these funds," Paul said.
ABAG didn't announce his resignation until Friday night at the request of law enforcement officials, Paul said.
The missing money is from a fund intended to pay for infrastructure improvements in San Francisco's South of Market Street neighborhood.
ABAG continues to work with law enforcement and other municipal agencies to recover the money, Paul said. ABAG carries insurance policies that cover criminal theft and misconduct by employees, but it's also looking for a quicker method of making the city whole while it works to recover the funds, he said.
A probe was launched in December after a routine audit of the South of Market Community Stabilization Fund, a pool of community facilities district bond money and developer contributions used for neighborhood improvements, showed the account had been cleaned out. San Francisco City Attorney Dennis Herrera and law enforcement officials quickly focused on Howatt.
The community facilities district bonds were issued through the ABAG Finance Authority, a joint powers authority that serves as a conduit bond issuer for nonprofits and other borrowers.
Howatt has retained attorney Mary McNamara, a partner with San Francisco law firm, Swanson & McNamara, according to Paul. McNamara, an attorney who specializes in white collar criminal defense and commercial litigation, couldn't be immediately reached for comment.
Howatt had been at an investment bank conference in New York and did not initially return phone calls or texts from ABAG officials after the investigation came to focus on him, Paul said.
Howatt was a public finance banker before joining ABAG in 1995.
