SAN ANTONIO — A taxpayer-funded nonprofit tasked with building “a more prosperous downtown” is under investigation over an elaborate embezzlement scheme.
Centro San Antonio president and CEO Pat DiGiovanni resigned Tuesday after news of the theft of $175,000 broke. DiGiovanni was not implicated in the embezzlement, but the former deputy city manager said he quit to “restore order and regain the people’s trust,” according to the San Antonio Express-News.
A source close to the situation said DiGiovanni’s resignation was due to “lax oversight” at Centro.
An unidentified employee is under investigation for falsifying audits, emails and other documents over the past two years. The woman, who worked as a staff accountant for Centro since October 2014, was fired earlier this month.
The embezzlement scheme rocked the agency, which is supported by tax funds from a Public Improvement District.
Revenues are raised through a special city tax assessed on downtown property owners. Centro’s annual outlays include:
- $3,241,900 for gold-uniformed street attendants who pick up litter and direct tourists.
- $1,698,000 for maintenance, including power washing of sidewalks.
- $742,000 in management fees.
San Antonio City Council this year voted to extend the Centro program for 10 years and to expand the boundaries of the tax district that supports it.
A city audit of Centro in August reported no missing or misappropriated money.
Mayor Ron Nirenberg said Tuesday he was “deeply disappointed” by the embezzlement allegations. He called DiGiovanni’s resignation “an appropriate step toward ensuring accountability.”
Local businessmen told The Texas Monitor that any misappropriation of funds would have been flagged had DiGiovanni simply reviewed monthly bank statements and asked basic ledger questions.
Since forensic accountants haven’t begun their work, more than $175,000 could end up missing. The bookkeeper under investigation reportedly had her house posted for foreclosure last year.
Four years ago, DiGiovanni, a former deputy to City Manager Sheryl Sculley, was issued a “letter of admonition” from the city’s Ethics Review Board for “unknowingly” violating San Antonio’s code of ethics.
DiGiovanni and politically connected developer David Zachry were accused of conflicts of interest for their roles in a $305 million construction contract let by the city.
In 2012, DiGiovanni negotiated employment with Centro while he was serving on a city selection committee to recommend a company to expand the Henry B. Gonzalez Convention Center downtown. Zachry, president and CEO of Zachry Corp., which won the contract, was vice chairman of the Centro at the time.