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Modus Opportundi

Rod Almighty: Rod Diridon's legacy as an effective politician-- and a truth-stretcher-- lives on in his new job at SJSU. Illustration by Steven DeCinzo Political animal Rod Diridon brings his freewheeling ways into his job as head of a national transportation institute--and some folks don't like it By Will Harper 'AT 58 YEARS OF AGE, I have a mode of operation that has developed over many years, [and] has yielded significant success." Rod Diridon, former Santa Clara County Supervisor, sent that message, as a kind of mea culpa, to an employee of his publicly funded transportation think-tank at San Jose State University one year ago. Diridon's administrative director was irate--after accidentally discovering a copy of a fundraising letter lying on the office printer. She questioned the letter's propriety, since it was unrelated to transportation issues. Two institute employees later recalled hearing that Diridon instructed a state-paid office assistant to keep the letter a secret--a contention Diridon later denied. The letter was an effort to raise private donations to get a country club membership for San Jose State University president Robert Caret. Diridon sent it to about 30 local Silicon Valley deep-pockets, such as developer Carl Cookson and beer distributor Mike Fox Sr., who recalls donating $1,000 to the cause. "President Bob Caret of San Jose State University has fallen in love with the San Jose Country Club [SJCC]," the letter began. "He's played a half-dozen rounds [of golf] and has decided he'd like to have a SJCC membership for the University." The former administrative director, who asked not to be named, wrote to Diridon that his letter seemed to be an effort to suck up to the boss by allowing Caret to "play golf for free" with "important officials." She didn't understand what a $55,000 country club membership for the local university president's office had to do with transportation research. To this former staffer, it seemed a case of a local politician playing Big Man on Campus on the publicly funded playground. The playground, in this case, was the transportation institute created and run by the valley's acclaimed transportation czar, Rod Diridon, a man known locally as the father of the modern light rail system. Ticket to Ride IN 1991, CONGRESS created the valley's International Institute for Surface Transportation Studies (IISTPS or "ice tips," for short) to conduct research, share data with public transit agencies, and establish a transportation studies program. Diridon himself, while he was still a county supervisor, had lobbied then-Congressman Norm Mineta to create the institute by earmarking funds for it in a transportation bill. The Institute's major claim to fame, so far, is a research study of terrorist attacks on public transportation systems, which won rave reviews from Diridon's superiors in Washington, D.C. But terrorists aren't likely to be bombing golf carts at the San Jose Country Club anytime soon. Diridon defended his fundraising efforts as being university-related, arguing that securing the club membership for the university chief would be a nice perk to attract future qualified candidates for the job after Caret leaves. This incident, along with about a dozen other alleged improprieties, prompted Diridon's assistant to file an anonymous complaint with the U.S. Department of Transportation earlier this year. (After the controversy arose over the country club letter, Diridon apparently cut a personal check to cover the associated staff time and postage costs.) As a result of these allegations, several ex-employees of Diridon's research institute were contacted this summer by the U.S. Department of Transportation's office of the inspector general (OIG), the financial watchdog for transportation programs. They reportedly told investigators similar stories about Diridon using institute resources to handle his personal business, buy gifts and improperly lobby federal officials while on trips to the Capitol. Investigators also queried Diridon about his international trips to conferences in Stuttgart, Germany, and Oslo, Norway, which were ostensibly part of the institute's "international" designation. While the federal investigators for the inspector general have for the time being decided that Diridon's alleged transgressions don't add up to an illegal misuse of public funds, they put administrators in Washington, D.C., on notice to keep better tabs on their grantees. "We found no misconduct by anyone," assures Jeff Nelligan, spokesman for the inspector general, "but we have contacted [the federal transportation research program] and we're going to talk to them about tightening up their procedures and regulations." Nelligan adds that the investigation isn't officially closed because a final report has yet to be written. That report, he says, should be completed by the end of the year. Grant administrator Amy Stearns confirms that she and her bosses are also talking with university officials about narrowing the institute's geographic focus because they are uncomfortable with the institute's ostensibly international scope. Diridon declined several written requests to discuss these issues with Metro. Sources familiar with the investigation say that Diridon has since offered to stop conducting business for his exclusive VIP discussion group, Quest, from inside the IISTPS office, as well as that of another nonprofit he heads. Academic Instincts BEFORE GOING TO WORK for the institute full-time in 1995, Diridon had spent 20 years as a county supervisor honing his successful "mode of operation." Term limits put Diridon the politician out of a job in 1994, but not for long. Immediately after he left office, the board of trustees for IISTPS hired Diridon as executive director of the agency--which he had created in the first place. Another former employee, Pat Piras, knew Rod Diridon before she came to work for IISTPS as its research director in 1994. A 20-year transportation policy veteran, Piras was a staffer for the Metropolitan Transportation Commission when Diridon served as a commissioner there. The two had their policy differences at MTC, Piras recalls, but she believed they each had enough respect for each other to work together at IISTPS. An "evolutionary summary" of the institute from April 1997 describes Piras like this: "Her remarkable academic preparation and long experience as a senior transportation policy analyst and nationally respected consultant made her the clear choice [for the job]." Soon after teaming up with Diridon, Piras and others say, they noticed office staffers doing stuff that had nothing to do with IISTPS. Anselmo Guevara, who worked at IISTPS for one year, says that Diridon assigned state-paid work-study students tasks unrelated to the institute. Both Piras and Guevara say that IISTPS personnel and office equipment were also used for another Diridon project, the California Trolley and Railroad Corporation, a nonprofit organization Diridon founded in 1982 to restore San Jose's historic trolleys. Some of Diridon's other regular activities handled in the office had little or nothing to do with transportation. Quest is a monthly discussion group of local VIPs who get together once a month to discuss current events and issues, says public defender Jose Villareal, one of 25 Quest members. Other prominent members include Mercury News editor Rob Elder, former Nasdaq chief Gary Burke, ex-Chamber of Commerce president Tommy Fulcher and SJSU president Robert Caret. Diridon serves as Quest's top organizer. He arranged it so that Quest's monthly meeting notices are faxed from the transportation institute's university office by an intern who also makes follow-up calls and confirms attendance. Diridon grew so comfortable having Quest handled from the university office that he began to include it as a topic at institute staff meetings. Guevara says he felt uncomfortable about the use of institute staff and resources for activities like Quest--which seemed to have more to do with benefiting Rod Diridon the politician than with transportation policy. Piras considered Quest more of an "annoyance" than anything else. She objected more to what she perceived as Diridon's inappropriate lobbying to get the institute's federal funding--previously set to expire this year--reauthorized. Lobbying Taboo IN FACT, the institute's federal grant strictly prohibits any kind of lobbying--including advocacy for grant reauthorization--on the public dime. The state matching grant contains similar restrictions, a Caltrans spokesman says. On at least one occasion, Diridon told the institute's board of trustees that he was spending a lot of his time on reauthorization activities, Piras says. In May of last year, Piras warned Diridon in writing not to engage in any reauthorization activity during a federally paid visit to the Department of Transportation in Washington, D.C. She says that en route to D.C., Diridon called the institute's office to get phone numbers for reauthorization lobbyist Becky Weber and U.S. Rep. Anna Eshoo (D-Palo Alto). It wouldn't have been the first time Diridon had been accused of lobbying during such trips. According to documents submitted at the behest of federal auditors, Diridon had done something similar two months earlier on another D.C. visit. A memo by the former administrative director says that even though Diridon did attend several officially sanctioned activities, his itinerary was also replete with reauthorization meetings. Piras now says that Diridon's practices incited her to resign because of "the inappropriate use of federally funded time," and Diridon's habit of "conducting what should be an academic office as if it were a political office." However, Elaine Joost, the deputy research director of the Department of Transportation, says Diridon's political savvy helped him do a better job at the institute. She considers many of the specific gripes about Diridon's activities nit-picking. No federal funds had to be reimbursed as a result of the investigation, she points out. During trips to Washington, "it's not unusual for [institute representatives] to conduct other business while they're here," Joost says. As long as they meet their official work obligations, what they do during their private time is their own business, she says. As for Quest, Joost maintains that it did not adversely impact the research grant. She points out that Diridon's marketing capabilities have gone a long way to get the most out of federal dollars. Though the original federal grant didn't require a one-to-one match, Diridon persuaded Caltrans to match the full amount. On top of that, his annual dinner brings in more than $20,000, according to the institute's June 1996 grant proposal. "I'm not sure that a traditional academic could have gotten so much mileage out of a relatively modest grant," Joost says. Best and Worst IN HIS TIME as a prominent county elected official, Diridon became widely credited by even his critics as being the driving force behind the county's light rail system, a fitting honor for the son of an Italian immigrant railroad brakeman. He was also twice named as the South Bay's "least trusted leader" by the San Jose Mercury News. "I thought [Diridon] was forthright in the beginning," says real estate investor Murphy Sabatino, who spearheaded the local term limits movement opposed by Diridon, "but after a while he started switching his positions. I didn't know if I could trust him." In Diridon's post-political life, it appears that both aspects of his legacy survive. The outlook for his think-tank didn't look so rosy one year ago, when early versions of a highway transportation bill cut the institute's funding, according to Sen. Barbara Boxer's office. But Diridon had connections. Ex-Congressman Norm Mineta contacted Boxer's office to ask for her help, her press aide says. Boxer sits on the Environment and Public Works Committee, which oversees federal transportation spending. Boxer later issued a triumphant press release bragging that she got the committee to restore the institute's funding. But Diridon wanted more. IISTPS was something of a bastard child among the research centers, getting only $250,000 a year from the feds. Diridon wanted what the big boys were getting: $1 million. After some congressional haggling, the institute not only survived but prospered. Congress awarded IISTPS $750,000 a year over the next four years--triple what the institute had been getting. There was only one hitch: The new federal grant would require a one-to-one money match. The state had been matching the original $250,000 annual federal grant, but would it chip in another $500,000? Assemblyman Mike Honda (D-San Jose), Diridon's former colleague on the Board of Supervisors, went to work to get something in the budget for IISTPS in July. He urged Assembly Speaker Antonio Villarigosa to give IISTPS the extra $500,000, citing bipartisan support from 12 lawmakers. Assemblyman Fred Keeley (D-Santa Cruz), a member of the budget committee, ultimately submitted the actual written request, which bore an old Diridon trademark: stretched truth. "This institute (IISTPS) has been evaluated by the Volpe National Surface Transportation Center as one of the most productive of the 10 national university research institutes," the budget item claimed. When Gov. Pete Wilson signed the budget last month, he authorized the extra $500,000 for IISTPS. But Volpe Center had never done any such Top Ten evaluation in which IISTPS received praise about its productivity. A 1997 report by the Volpe Center obtained by Metro does assess the university research program as a whole, but contains no rankings for productivity. Amy Stearns, a federal grant administrator who oversees the research program, also says she knows of no evaluation done by the Volpe Center that ranked all the institutes' performances. Even Diridon-booster Elaine Joost, the DOT's deputy director of research, called the claim "puffery." She does, however, credit IISTPS for being productive given the relatively small grant it received. After Metro asked about the information in the budget item, Keeley's office acknowledged that it had been told about the Volpe Center evaluation by Diridon. Political Animal IN AUGUST, the institute held its annual $150-a-head gala inside the SJSU student union. Diridon himself served as master of ceremonies while his paid guests dined on salmon and asparagus. At one point, he rattled off a long list of elected officials in attendance, including mayoral candidate Ron Gonzales. Such dignitary introductions are expected at political functions, but bringingthis tradition into academia raisedthe eyebrows of some of the institute's employees. During his lengthy political career, Diridon had thrown countless bashes to raise campaign money. And like many other politicians, he often tapped his campaign account to improve his lifestyle and community standing. Campaign reports show that he regularly cut checks from the "Friends of Rod Diridon" account to pay for meals, make donations and attend high-society social events such as the Silicon Valley Charity Ball. The money raised at the August event went to another Diridon-controlled account: the research institute's modest operating account. His former administrative officer told investigators that over a six-month period, she processed requisitions for, among other things, catering for a dinner meeting of Diridon's VIP discussion group, a $206 gift from Avery's--a crystal and chinaware store--and a $110 "business" lunch on New Year's Eve. The foundation plans to authorize an independent investigation of that account, says university spokeswoman Carol Menaker. This kind of thing may have been standard fare when Diridon was an elected politician, but it has definitely made some of his colleagues in the cut-and-dried world of academic research uncomfortable. "The sad thing is I don't think he ever made the transition to what academic, non-elected life is like," observes former research director Piras. Academic researchers prize intellectual substance, objectivity and collegiality, Piras says. Diridon had mastered a different art, where power and competition reign. [ San Jose | Metroactive Central | Archives ]