Newport Aquatic Center must respond to allegations of using funds for trips, gifts, cars

The Newport Beach city attorney has given the Newport Aquatic Center a March 8 deadline to respond to more than 40 allegations raised by community members that NAC executive director Billy Whitford and other employees and board members for the tax-exempt, non-profit organization used NAC funds to purchase automobiles and other items for personal use and pay off personal debts including those to the Internal Revenue Service, according to a letter obtained by the Orange County Register.

In the letter to the NAC board of directors, city attorney Aaron C. Harp also asked NAC officials to answer questions regarding allegations that at least $324,000 in funds raised for the club’s junior rowing program are unaccounted for, that the non-profit’s facilities and employees were used to manufacture and distribute paddles and canoes for three for-profit companies at least one of which Whitford allegedly owned or had a managing interest in.

“The City looks forward to a prompt and focused response addressing each allegation that has been raised and question asked in this correspondence,” Harp wrote in a letter mailed to the NAC board Thursday.

Harp’s letter comes four months after a Register investigation revealed how NAC, a club with international reputation for producing Olympians, has been placed in financial peril by employees using NAC credit cards for personal use and to bill the club for hundreds of thousands of dollars in materials and supplies for for-profit companies using NAC facilities in violation of laws governing non-profits.

Whitford and three other NAC employees charged more than $1.2 million to NAC credit cards between from 2011 to 2016, according to credit card records and a board-commissioned forensic analysis of the organization’s finances obtained by the Register.

Nearly $650,000 of those purchases were for meals, groceries, trips, gifts, Angels and horse show tickets, payment of traffic and parking tickets and other items appearing unrelated to NAC business and in potential violation of IRS guidelines, according to credit card statements, receipts and financial records.

NAC’s response to the allegations could impact whether the city renews its ground lease with the club, Harp said in the letter. The current lease is scheduled to expire October 27, 2023.

“I write to you on behalf of the City of Newport Beach to express the City’s concerning allegations made by community members regarding the management of the Newport Aquatic Club,” Harp wrote. “While numerous allegations have been made, one of the most important issues for the City relates to the governance of the NAC.

“Although the City does not manage the programs offered by the NAC, ensuring the limited public resources are appropriately managed is a critical issue for the City.”

Whitford did not respond to a request for comment.

Among the allegations outlined by the city include:

• Whitford purchased two automobiles in his name using NAC funds. One of the automobiles is unaccounted for.
• Whiford and other NAC board members and employees used club funds to purchase fuel, groceries, lunches, clothing, sunglasses, Halloween costumes, home fixtures and other items. NAC board secretary and treasurer Jon Van Cleave allegedly “remarked that personal expenses are perks of the job,” Harp wrote in the letter.

• Whitford used NAC funds to pay off debts to the IRS.
• In 2014 and 2015 approximately $278,000 in junior program dues went unaccounted for.
• The junior rowing program raised $46,000 to purchase two four-person boats in 2018. The boats were never purchased. In May $35,000 of the $46,000 was used to make two credit card payments to Chase.

Also among the allegations detailed in the letter are that Whitford sexually harassed an NAC employee, that the organization retaliated against whistleblowers by removing directors Bruce Ibbetson and Donna Warwick from the board, and that NAC provided tax deductible donation receipts at inflated values for donated properties in Colorado and Arizona.