Missing $1.3M returned to San Francisco infrastructure fund 

A San Francisco Bay Area government association is returning $1.3 million that its former director of financial services is accused of embezzling from a fund meant for San Francisco infrastructure improvements.

The San Francisco city attorney's office said The Association of Bay Area Governments' financing authority agreed to use its own reserve funds Tuesday to restore the money.

The association has said it appears Clarke Howatt, its former director of financial services, created false documents and identities as part of a scheme to take the money. His attorney, Mary McNamara, said Howatt does not deny the embezzlement allegations and is cooperating with investigators to give the money back.

The funds were intended for improvements in San Francisco's South of Market neighborhood.

The Association of Bay Area Governments is the regional planning agency for the nine-county Bay Area.

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