Valley Economic Group’s Chairman Quits

The chairman of the Valley Economic Development Center has resigned under fire, and half of the nonprofit group’s board has quit after months of controversy at one of Los Angeles’ most prominent small-business organizations.

David Honda, who had been the VEDC’s chairman for eight years, was asked to resign by a group of board members on the grounds that he was interfering with the day-to-day operations of the organization, board member Wayne Adelstein said Monday.

Honda agreed to step down last Tuesday, saying he was exhausted by all the infighting at the organization.

“I didn’t want to fight,” Honda said Monday. “I wanted to get the organization back on its feet. But some of the other board members refused.”

Eight other board members have resigned in the last two months, Adelstein said, leaving just eight members on the 17-seat board.

Honda said several board members left because of his departure, although Adelstein said that many were planning to resign anyway.

For several months, the VEDC’s board has been sharply divided between allies of Honda, a Northridge contractor who served as chairman on a volunteer basis, and backers of the organization’s president and top-paid staff member, John Rooney.

Honda accused Rooney of running up debts at the nonprofit organization, which relies on government contracts to provide advice, training and loans to small businesses across Southern California. Rooney and his supporters accused Honda of meddling in the organization’s day-to-day affairs.

One of the disputes between Rooney and Honda centered on commissions. In May, Rooney and a VEDC consultant were paid $37,000 for their work in landing a $1.2-million venture capital investment for a Canoga Park sign company when the VEDC was $200,000 in debt.

Outraged, Honda and another member of the executive committee, Bob Myler, demanded that Rooney resign. Rooney resisted, and the full board, after reviewing his performance, upheld Rooney’s authority.

Marvin Selter, an Encino human resources consultant, is now the group’s interim chairman.