Grand Jury Asked Duffy About Special Fund : Probe: Two members of panel queried former sheriff about Roache’s misspending of informant funds, The Times has learned.

Two members of the San Diego County Grand Jury, including the county’s former auditor-controller, have questioned former Sheriff John Duffy about Sheriff Jim Roache’s misspending of informant funds for office furniture, The Times has learned.

The two-hour meeting occurred late last month, according to sources close to the investigation, and centered on Roache’s use of thousands of dollars in so-called “special funds.”

Special funds are those used primarily for law enforcement drug buys and to pay informants, but Roache used them for office furniture and other items.

Roache admitted to the misspending after a Times request for a list of expenses from the special fund, and he restricted the use of the money through a set of new policy guidelines.

Upon turning over the documents, Roache said he had been conducting an internal inquiry all along and discovered that $12,800 that had been improperly allocated, including $3,000 for two oak wall cabinets for both himself and Undersheriff Jay LaSuer. He replaced the special fund money with money from other areas.

Last month, grand jury members Gerald Lonergan and William Seibold visited Duffy at his Kearny Mesa office, where the former sheriff runs a consulting business. Sources said the men questioned Duffy at length about the special fund and various expenditures Roache had made.

Lonergan, 63, retired as the county’s auditor-controller in 1980 after 13 years in the post. He is the chairman of the administration/audit committee. Seibold, 58, is the chairman of the law & justice committee.

Grand jury foreman Thomas McNamara would not confirm a grand jury investigation of the special funds. Duffy also refused comment Wednesday.

But sources said Duffy may have some knowledge about the misspending and was questioned about rules governing the proper use of the money.

Sheriff’s legal counsel Rick Pinckard said he was not aware of a grand jury investigation.

“It’s certainly their prerogative to investigate,” he said. “We would cooperate fully.”

Meanwhile, the county’s current auditor-controller is finishing up a broad review of Roache’s spending, including $212,863 in the special fund and $3.55 million in drug fund expenditures.

William J. Kelly said the review would include the $650,000 purchase of three helicopters--two assembled and one disassembled--and a cherrywood desk, credenza, conference tables and chairs, sofa and projection television system from Charles E. Otterman, who liquidated his oceanography company. The sheriff’s office valued the purchase as $1.3 million.

Kelly said he is especially interested in knowing whether the furniture was donated, which would have required a letter to the County Board of Supervisors. Greenblat, the sheriff’s spokesman, said last week that the furniture was included in the purchase price and approved by the board.

The auditor-controller also said he would examine an $1,800 donation of synthetic marble from a Santee marble shop. The marble was used for a shower stall in Roache’s office bathroom.

A letter from Roache in May to Bob Cline of Custom Craft Marble thanked him for his donation, which “for many years to come, will serve the county and its law enforcement community.” Donations of less than $5,000 can be accepted by a county department head without board approval.

Last week, Roache clarified publicity over $950 in informant funds spent to refinish his walnut desk and fit it with a glass top. Roache said his desk and credenza set were valued at $26,000, inherited from Duffy, and not part of the items Otterman sold to the department.

Otterman’s cherrywood desk and credenza set included with the helicopter purchase has always been used by LaSuer, Roache said. The sheriff’s office has declined to quote its value.

Earlier this year, the San Diego Reader quoted LaSuer as saying, “It’s very nice furniture. Let’s put it this way--it’s not something either you or I could afford.”