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HomeMy WebLinkAbout10-23-1986 Minutes City of San Bernardino, California October 23, 1986 This is the time and place set for an Adjourned Regular Meeting of the Mayor and Common Council of the City of San Bernardino at their Regular Meeting held Monday, October 20, 1986, at 9:03 a.m., in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. The City Clerk has caused to be posted the Notice of Adjournment of said meeting held Monday, October 20, 1986, at 9:03 a.m., and has on file in the Office of the City Clerk an Affidavit of said posting together with a copy of said Order which was posted on Tuesday, October 21, 1986, at 10 :00 a.m., in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. The Adjourned Regular Meeting was called to order by Mayor Wilcox at 10:02 a.m., in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. ROLL CALL Roll Call was taken by the City Clerk with the follow- ing being present: Mayor Wilcox; Council Members Estrada, Reilly, Quiel, Frazier, Strickler; Sr. Assistant City Attor- ney Briggs, City Clerk Clark, City Administrator Schweitzer. Absent: Council Members Hernandez, Marks. CONFLICT OF INTEREST WORKSHOP - REPRESENTATIVE OF THE CALIFORNIA FAIR POLITICAL PRACTICES COMMISSION In a letter dated October 7, 1986, John G. McLean, Counsel, Legal Division, California Fair Political Practices Commission presented a draft of A GUIDE TO THE POLITICAL REFORM ACT OF 1974 - CALIFORNIA'S CONFLICT OF INTEREST LAW FOR PUBLIC OFFICIALS - CALIFORNIA FAIR POLITICAL PRACTICES COMMISSION. The document explained the purposes and provi- sions of the Political Reform Act herein summarized. (R-l) The Political Reform Act was enacted by an initiative, known as proposition 9 in 1974. One of the Act's main purposes is to prevent financial conflicts of interest on the part of public officials. The Political Reform Act prevents conflict of interest by (1) Disclosure which requires every public official to disclose all econ- omic interests or sources of income which may possibly affect the exercise of hiS/her of- ficial duties; (2) Disqualification which may require the official to disqualify himself/- herself from participating in a governmental decision of using hiS/her official position to influence or attempt to influence a gov- ernmental decision. The Political Reform Act requires that all elected state and local officials, all high ranking state and local officials and other such officials or employees of state and local government agencies that are designated by the agencies for which they work file statements of economic interests. Unpaid members of boards or commissions and consul- tants to state or local government agencies also may be required to file statements of economic interests. Statements of Economic Interests are public records and may be inspected and copied dur- ing normal business hours. statements of economic interests must be kept on file by the official's or employee's agency and made available upon request. Certain statements are also available at the Fair Political Practices Commission. The disqualification requirements of the Poli tical Reform Act apply to all elected or appointed state or local government officials and to all government agency employees, ex- cept judges and court conunissioners. Unpaid members of boards or commissions and consul- tants to state or local government agencies may also have to disqualify themselves under the act. A conflict of interest exists when all of the following occur: 1. The official makes, participates in, or uses his or her official position to influ- ence a governnmental decision; 2. It is foreseeable that the decision will affect the official's economic interest; 3. The effect of the decision on the of- ficial's economic interest will be material; 4. The ficial's guishable generally. effect of the decision economic interest will from its effect on on be the the of- distin- public When a public official determines that he/ she has a conflict of interest he/ she must not vote on, participate in any way in, or attempt to influence the decision. The of- ficial must declare a disqualification and the reason for such disqualification must be announced or disclosed in writing. A governmental decision is not invalidated by the fact that an official who made or parti- cipated in the decision had a conflict of interest. However, a court can set aside a governmental decision if it determines that an official who made the decision had a con- flict of interest, that without that of- ficial's actions the decision would not have been made, and that setting aside the deci- sion will not cause injury to innocent persons. There may be situations in which a public official is legally required to make or par- ticipate in a decision, even though the of- ficial has a conflict of interest. In such a case, the Political Reform Act allows the official to make or participate in the deci- sion so long as the existence and nature of the official's financial interest is on pub- lic record and the official does not try to influence the decisions of others. 2 10/23/86 An official who violates the Political Reform Act may be subject to administrative action and administrative penalties of up to $2,000 for each violation, a civil lawsuit, in which a court can impose a fine. A willfull viola- tion of the Act is also a misdemeanor, pun- ishable by a fine of up to $10,000 or by imprisonment, and may result in the official being ineligible to run for public office for four years. When a public official suspects that he/she may have a conflict of interest, the attorney for the official's agency should be con- sulted, or the official can ask the Legal Division of the Fair Political Practices commission for advice. The Commission can only issue opinions or give advice regarding conflicts of interest to the official who may have to be disqual- ified, or his/her authorized representative. The Conunission cannot issue an opinion or provide advice about an official's past conduct. All Corrunission regulations and opinions are published by the California Continuing Educa- tion of the Bar. Virtually all advice re- quests and advice letters are public records. Complaints concerning violations of the con- flict of interest provisions of the Political Reform Act should be made to the local dis- trict attorney, the Enforcement Division of the Fair Political Practices corrunission, or the Attorney General. The Fair ministers Act. Poli tical Practices Conunission ad- and enforces the Political Reform Mayor Wilcox opened the meeting Assistant City Attorney Briggs, who in McLean, Counsel, Legal Division, Fair Commission. and introduced Sr. turn introduced John Political Practices Mr. McLean, Counsel, Fair political Practices Corrunis- sion, stated he would present a general outline of the con- flict of interest laws and answer questions. Divisions Mr. McLean, sion, presented follows: Counsel, Fair Political Practices Conunis- the three divisions of his office as 1. Enforcement Division; 2. Technical Assistance Division, which is there to answer questions about forms used in campaign reporting and statements of economic interests. 3. advice curred. Legal Division, whose main function is to provide about potential conflicts before a problem has oc- Mr. McLean, Counsel, Fair Political Practices Commis- sion, stated that letters from the Legal Division can pro- vide irrununity that a telephone conversation won't. 3 10/23/86 crry A'r'l'ORNEY PRH1CE ARRIVED At 10:12 a.m., City Attorney Prince arrived Council Meeting and replaced Sr. Assistant City Briggs. at the Attorney Political Reform Act and other laws Mr. McLean, Counsel, Fair Political Practices Commis- sion, stated that the commission's jurisdiction regarding conflict of interest laws is limited to the Political Reform Act. There are other conflict of interest laws outside the Poli tical Reform Act, primarily those in Government Code Section 1090. The political Reform Act just requires that if there is a conflict, that the public official disquali- fies from participating in the decision. 'l'here is nothing wrong with having a conflict of interest, but the law re- quires that when a situation exists in which there is a conflict, that the official disqualifies from participating in that decision by voting or attempting to influence the decision in other ways. Components of Political Reform Act Mr. McLean, Counsel, Political Practices Commission, had an overhead presentation showing the components of basic conflict of interest law. An official's economic interest is affected whenever a governmental decision affects: 1.The material financial status of the official's econ- omic interest. This provision includes a spouse or depen- dent children and refers to any decision which would have an effect on income or assets. 2. A business entity in which the official, dependent children, have a direct or indirect worth $1,000 or more. spouse or investment 3. dependent $1,000 or Real Property in which the official, spouse or children, have a direct or indirect interest worth more. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding the ownership of corpor- ate stock, stating that the question really concerns whether an action will have a material financial effect on the business and on the official who owns the stock. 4. A person or business entity from which the official has received an economic interest from any source aggregat- ing $250 or more, provided it was received by the official within twelve months prior to the time the decision is made. Mr. ~lcLean, Counsel, Fair Political Practices Commis- sion, answered questions, explaining how this provision relates to the status of a nonprofit organization. The nonprofi t organization does not meet the definition of a business entity, but if a salary of $250 or more is re- ceived by the public official in the twelve months before the decision, then the nonprofit organization can be a source of income, and if the decision meets the other criteria, such as a reasonably foreseeable material financial interest and the other three components, then a disqualification would be necessary. sian, from holds Mr. McLean, Counsel, Fair Political Practices Commis- explained provisions regarding the source of income customers of a business. If a public official a 10% or greater interest in a business the customer 4 10/23/86 income is then attributed as a source of income on a pro rata basis. campaign contributions as income for disqualification purposes Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding campaign contributions and whether they are considered income for reporting or disqualification purposes. He stated that the definition of income does not usually include campaign contributions, unless the elected official also sits as a member of an appointed board, such as a joint powers authority. Council Members on a Redevelopment Board do not have to report campaign contributions as income as long as the en- tire Council sits as the Redevelopment Agency. COUNCIL MEMBER ME>RKS ARRIVED At 10:25 a.m., Council Member Marks arrived at the Council Meeting and took his place at the Council Table. 5. A business entity in which the official is a direc- tor, officer, partner, trustee, employee or holds a position of management. 6. When a person or business entity is the donor, intermediary or agent of a gift of $250 or more that is promised to or received by the official within the twelve months preceding the decision. An important exclusive from this is if there are persons with whom gifts are normally exchanged on birthdays and holidays, they are not gifts to the official unless there is a substantial difference in the value of gifts being exchanged. Mr. McLean explained effect, giving some general a substantial likelihood. seeable. the definition of foreseeable outlines, such as there must be A mere possibility is not fore- Redevelopment Project Areas Mr. McLean, Counsel, Fair Political Practices Corcunis- sion, answered questions concerning an elected official who was the listing broker on a piece of property within a Rede- velopment project area. The official voted on the formation of the project area. He explained that at the time of the vote, the official may not have been able to foresee that his vote would have a material financial effect, especially if only one parcel were listed. Mr. McLean added that there's nothing in the Political Reform Act that prohibits an official from selling property or carrying on business. Mr. McLean, Counsel, Fair political Practices Commis- sion, answered questions regarding a situation in which a Council Member is asked to serve on a committee that will address a specific area of property and during the course of time that member is participating in three levels: as a member of the Committee, of the Redevelopment Agency Commis- sion and of the Board. Decisions are made on that parcel of land and attempts are made to influence decisions with re- gard to the area. The Member in question then later dis- qualified himself from a vote. Mr. McLean stated that he couldn't comment on specific conduct, but in a general sense that an official who is required to disqualify at the time the actions are occurring, has a conflict if the four com- ponents are met: using his/her official position to influ- ence a governmental decision; a reasonably foreseeable ma- terial financial effect on income which is not distinguis- able from the effect on the public generally, and in such case, the official cannot vote nor seek to influence the vote. 5 10/23/86 Mr. McLean, Counsel, Fair Political Practices Conunis- sion, answered questions regarding the policy that governs a situation where actions do not come before the governing body, but have official sanction, such as administrative actions taken by City departments. If the four parameters are present in the member's situations, then must that mem- ber also not participate in any administrative action which would implement policy when that action would affect his/her finances. Mr. McLean stated that if there were some kind of clerical type of decision that didn't affect the decision, it is possible that they could do that. For example, if a Council Member were disqualified, he/she should not be talk- ing to staff trying to influence them. Claim appeal application before Council Mr. McLean, Counsel, Fair Political Practices Commis- sion, explained that there are several tests in determining what constitutes a material financial effect on an economic interest. Generally, one must look at what the dollar value of the effect of the decision is. He stated, however, there are a couple of special situations in which the official is disqualified regardless of the dollar value. The first one of those: If the person or the business entity or the non- profit entity in which the official has an economic interest appears before the Council with an appeal, claim, or appli- cation. If the case being discussed is about a nonprofit entity, the member would need to disqualify from that deci- sion. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding the policy of whether or not that decision applies if more than just one nonprofit enti ty is being discussed. In other words, would it apply across the board to allow setting policy for nonprofits and must the member then abstain. He stated there are two things that must be looked at: (1) Determine what the type of appearance before the Council is: a claim, appeal, or application; (2) Is the effect on the member's economic interest distinguishable from the effect on the public generally. Administrative decisions - Information gathering Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding nonprofit entities which have a contract with the City. The specific question was when a Council Member is the Executive Director of a non- profit entity and is charged with the responsibility by that board to acquire information for a particular project. Con- sequently, this Council Member has to deal with the various departments within the City. The question was where does the Conflict of Interest lie? He stated that what the Po- litical Reform Act prohibits is the participation or seeking to influence a decision. Gathering information does not constitute seeking to influence a decision, so there's noth- ing to prohibit a person from gathering information. Mr. McLean, Counsel, Fair Political Practices Cornmis- sion, answered questions, stating that the provisions being discussed also include influencing a staff decision. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding a situation in which a Council Member asks a staff member for his opinion on a particular bit of information and if this would constitute a conflict of interest. He stated that it depends on what is in the folder, such as a letter from the Council Member saying he/She thought it was a good idea. That would appear to be an attempt to influence. That is the kind of thing that might require an opinion based an specific facts. b 10/23/86 Nonprofits Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding a situation in which someone is an official or administrator of a nonprofit or- ganization and there's some funding from the City. Is it the financial interest of the individual or of the organization which triggers the conflict of interest? Mr. McLean stated that it depends on the situation. If it is affecting the pocketbook, obviously it affects the individual. If it af- fects a source of income to the individual, one must look at the effect on that source of income. Mr. McLean, Counsel, Fair Political Practices Corruuis- sion, answered questions regarding a scenario where the interaction of Council Members serving as both members of the Council and on boards, commissions, and nonprofit organ- izations may affect public services. In essence, what if the financial standing of a nonprofit corporation doesn't directly affect the financial interests of the individual member. Mr. McLean stated that unless there is a source of income to the melwer, there.s no basis for disqualification. If a member is just sitting as a Director of Boy Scouts, or whatever, there is no basis for disqualification. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding the prior scenario if there were a stipend. He stated that the amount has to be over $25U a year to be considered a source of income and received within the twelve months prior to the decision to be a basis for disqualification. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding a scenario in which a Council Member served on the board of a local opera company that applied for a grant of $5,000 which would go through the Fine Arts Commission of the City. Seats worth $300 a year were given to the Member for him and his family be- cause of his place on the board. The recommendation for the $5,000 grant then comes before the Council from the Fine Arts Commission. What must the member do? Mr. McLean stated that the Commission's gift regulations are being reconsidered and there's a real question as to whether or not those gifts would be a basis for disqualification. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding a similar situation in which a Council Member gets a stipend of $300 a year. He stated in that case, and the matter comes before the Council, that would be a basis for disqualification. He answered further questions, stating that the benefit doesn't have to be direct, it can be indirect benefit to the organ- ization in which he serves. Mr. McLean suggested that the effect to be considered is that of the source of income, not on the member's. Nonprofit - Community Property share of gift Mr. McLean, Counsel, Fair POlitical Practices Commis- sion, answered questions regarding the previous scenario, with the exception that the spouse of the Council Member was the recipient of the gift from the opera company. He stated that in that case, she would have to receive $500 to dis- qualify because of the 50% community property share to the member. Material financial effect - Stockholder There is a variety of tests for material effect, depending on the size of the business decision isn't material on a Fortune 500 Company going to affect revenue or assets by a million financial entity. A unless its dollars or 7 lU/23/86 affect expenses by $250; 000. So if a member has stock in IBM, it would take a major decision before a disqualifica- tion is required. On the bottom end of the scale, in the smallest size business entity the decision is going to be considered material if it has a $10,000 effect on revenues or assets or $2,500 effect on expenses. If the decision is going to affect zoning, permitted use, or an annexation decision in real property that a public official has an interest in, that would be a basis for disqualification. Mr. McLean further explained that if a member has an interest in real property, if its going to be affected by less than $1,000, there is no basis for dis- qualification. This is the case of a situation where there is more of an indirect effect. Public Improvements Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding a situation where the City provides services, public improvements or paves the street where a member lives and whether or not this presents a conflict of interest. He stated that the answer to this is found in the fourth component which asks if the effect of the decision on the official's economic interest is distin- guishable from its effect on the public generally. Mr. McLean, Counsel, Fair Political Practices Commis- sion, explained that there are a lot of opinions and law underlying all these tests and again, he stressed that he was giving a general framework so that the Council will know when to ask questions and get further counsel. Legally required participation Mr. McLean, Counsel, Fair POlitical Practices Commis- sion, answered questions regarding a situation in which the majority of the seven Council Members would have a conflict of interest in an issue. He stated that there is a process called "legally required participation", which is essen- tially a lottery system or drawing names to give enough officials to establish a quorum. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding the ownership of stock, stating that both the amount of stock and the interest could be involved. A public official could have the investment in a business entity of over $1,000 or more. In that situation one needs to look at the effects that the decision was going to have on the business entity. If there was a deci- sion involving a closely held local corporation that was going to effect income, he/ she would need to look at what the effect is going to be on the official. If it is going to effect the official by $250 or more, then that could potentially be a basis for disqualification. Referring to the four components, he stated that even in situations where the other three criteria are met and the decision would otherwise be a basis for disqualification, if it is going to effect you similarly as the public generally, then its not going to be a basis for disqualification. Mr. McLean, Counsel, Fair POlitical Practices Commis- sion, answered questions, stating that the law applies to all public officials who are in a decision making capacity. This includes commissioners serving on the Planning Commis- sion, Parks & Recreation Commission, etc. Appearances at hearings by Council Members Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding a situation in which a Council Member attends a Commission meeting for the purpose of espousing his own feelings or attempting to influence his 8 10/23/86 commissioner's vote, and stated that the regulations spec- ifically say that attempts to influence include appearances before bodies which are subject to the appointive or legis- lative control of the Council. If there is a conflict there, the Council Member could not appear before those bodies to attempt to influence. But the one exception to that is if the decision effects property Wholly owned by the Council Member, spouse, dependent children or business entity, a Council Member could appear to represent his/her interest if it is made clear that he/ she is there in a personal capacity and not as a public official. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding a scenario in which a Member states for the public record that he was protecting his client and protecting the City. How can the member be doing both without having a conflict of interest? Mr. McLean stated that the law requires in that situation that the Member disqualify because a client is a source of income to him. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding a situation in which Council Members participated in decisions, such as a project area, up to a point and then a direct bearing on something that financially affects them comes up. At what point does the member abstain? Mr. McLean stated that the question is as each vote comes up, is it going to have a foreseeable material financial effect. In each situation it needs to be analyzed. Redevelopment Project Areas Mr. McLean, Counsel, Fair Political Practices Commis- sion, explained that the Commission had written an advice letter where these types of questions about a Redevelopment Plan were addressed. It discussed the questions of at what point was it so general that it was not foreseeable that there was going to be an effect on anything in the Redevel- opment Area and at what point it becomes specific. Each case has to be addressed with the facts and if at some point there is a close call, the member needs to start asking questions and contact the commission for answers to protect that member. Mr. McLean, Counsel, Fair POlitical Practices Commis- sion, answered questions regarding a situation in which Council Members put together a Redevelopment project Area and two of the members were respectively a real estate brok- er, and sign maker. At the time the proj ect area was put together, there was no indication that either Council Member would conduct their business of listing and selling real estate, or erecting signs. However, in the future some potential customers could request services from either of these business men. Should the Council Members disqualify themselves from any decision in putting this project to- gether because sometime in the future they may do business in that area? Mr. McLean referred to a Commission Opinion called the Thorner Opinion which attempts to describe some of these situations and suggested it be looked at in such a situation. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions, stating that under the previous scenario, there is no conflict of interest for the Council Members/real estate broker/sign maker to list and sell prop- erty, or erect signs at some distant time in the future in a Redevelopment project Area in which each Council Member had participated. 9 10/23/86 The point is the question that comes into play under the Act is what was the situation at the time the vote oc- curred. If there is a conflict, a member can't vote. Imether or not there was a conflict at the time of the vote does not matter when you're conducting the business. The Act doesn't say if you have a conflict you can't conduct business. It says if you have a conflict you can't vote. Mr. McLean answered questions regarding a situation in which the areas of a Redevelopment Project Area have been set, but not yet adopted. A Council Member/real estate broker is asked to sell property in that project area. At what point does that Council Member have a conflict of in- terest? Mr. McLean stated that there is a conflict of in- terest at the point where that customer becomes an economic interest to him and when the property is actually sold. If there is a multitude of property that has been listed by the Council Member/real estate broker, the Commission has said it is reasonably foreseeable that one of those prop- erties is going to sell. If there is continuing business with an entity, it is going to have been a source of income in the twelve months before the decision. If many proper- ties were listed with the Member, but none of them had sold and was not a source of income up to that point, the fact that all these properties were listed could still poten- tially make them a source of income. Goods and services Mr. McLean, Counsel, Fair Political Practices Cormuis- sion, answered questions regarding a situation in which an enti ty is coming before the City for assistance to build a building. The Council/Redevelopment Agency takes action to do what has been requested. A Council Member/sign maker has no intent at the time in any way to do sign work on this project. Sometime later a bid package is sent to him and a request for a bid. At what point is there is conflict of interest"' Mr. McLean stated that the point at which the Council Member/sign maker needs to disqualify is when he knows he is going to bid on the project. If, at the earlier stage, there was a substantial amount of competition among sign people and there was no idea of bidding or connection by the Council Member/sign maker, it wouldn't be considered reasonably foreseeable. Mr. McLean, Counsel, Fair Political Practices Commis- sion answered questions regarding governmental decisions. An example was given regarding the City's negotiations with the State of California for financial assistance on Seccombe Park. The City is going to get a tremendous benefit from these negotiations. Is there a conflict of interest because the City negotiated for the benefit of the City with another governmental agency? Mr. McLean stated there is no conflict of interest unless there is some financial interest to the Council Members in a decision when they appear before some other agency under which they have no appointive or budge- tary control. If there is a financial interest in the deci- sion, then the Council Member needs to make clear that he/- she is appearing in a private capacity. He further ex- plained that its all right to participate in a decision unless there is a conflict of interest. If all four of the conflict of interest components are present, a Council Mem- ber could not participate in a decision. Mayor wilcox stated that all City Department Heads had been invited to attend and asked if there were any questions or comments from them. Mr. McLean, Counsel, Fair political Practices Commis- sion, answered questions regarding a situation in which a Council Member could persuade a City employee about City 10 10/23/86 actions that might foreseeably have an economic interest on that Council Members' pocketbook. For example, a Council Member strongly recommends to a City employee that the City needs more fire hydrants, and the City employees implements the request. Does that person have a conflict of interest? Mr. McLean stated the decision would depend on what the effect of the decision would be on the official's interest. Department questions Gerry Newcombe, Fire Chief, asked, as a Head, how to restrict himself on decisions in the conflict of interest and in using his discretion. Department case of a Mr. McLean, Counsel, Fair Political Practices Commis- sion, stated it is possible in a situation where there is only one official who is legally authorized to make deci- sions, the legally required participation clause mentioned earlier could be invoked. An analysis should be made to determine if this could be used, or someone else be ap- pointed to make that decision. It would depend on what is legally authorized. Ken Henderson, Director, Community Development Divi- sion, had questions regarding action taken by the State Bar against the City Attorney of Los Angeles who was publicly reproved for misconduct in office. There were instances where City staff persons came to him with respect to whether or not there was a conflict of interest. In one instance it was the Planning Director who was alleged to be operating a business out of his office. The State found that in prose- cuting the Planning Director and members of his staff that the City Attorney was guilty of violating his confidential relationship of attorney-client. Mr. Henderson asked whether or not the City Attorney's Office serves as the attorney for the officers and employees of a local govern- ment and if the fact there is a confidential relationship. Mr. McLean, Counsel, Fair Political Practices conunis- sion, responded by explaining that there's a case Hayes vs. Woods, a Supreme Court Case, which dealt with some of the disclosure provisions of the Political Reform Act, and spec- ifically with situations of attorneys' disclosures. It essentially said that many private attorneys serve as mem- bers of boards or commissions and are required under the political Reform Act to report sources of income. They may decline. But the Court in that case said tnat the impor- tance of the Political Reform Act was such that disclosure would still be required unless there was a situation, for example, where the attorney defended child molesters and so disclosure of a client would be implicating that individual. He stated that the Court has a strong tilt toward enforcing the Political Reform Act. Ken Henderson, Director, ConmlUni ty Development Divi- sion, stated that it was his understanding that the issue was whether or not in consulting with the City Attorney as a staff person or officer of the City, that a confidential relationship exists. Mr. McLean, Counsel, sion, responded by saying sion had not specifically Fair Political Practices that to his knowledge the addressed that question. Commis- Commis- Shauna Clark, City Clerk, as Filing Officer, asked questions regarding a situation in which a Council person receives salary from a nonprofit organization of over $250. This organization has received grant funds in the past and has an opportunity to receive grant funds in the future. Knowing that he/she can't vote as a Member of the Council 11 10/23/86 ,--------- , this Council person still attempts to influence staff. Ms. Clark specifically asked what her obligations were towards reporting in this situation. Mr. McLean, Counsel, Fair Political Practices Cormnis- sion, stated that he didn't know immediately whether there is legal obligation to inform the Conunission or not, but offered to get the information. Shauna Clark, City Clerk, answered questions of the Council, stating that as City Clerk, she received all the statements. Because of this position, she sometimes becomes aware of situations that the average person would not hear of. She also agreed with the statement that the documents are public record, and even though access is available to everyone, she sometimes becomes aware of situations unknown to others. Mr. McLean, Counsel, Fair Political Practices Conunis- sion, stated there is nothing in the Political Reform Act that places any obligation on anyone to file a complaint if they are aware of a conflict, although there may be some- thing in general law terms of which he is not aware. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions regarding the question of whether or not there are any obligations on the part of elected officials or executive management of the City to file a complaint or make public knowledge of a reasonably suspected violation of the conflict of interest laws. He stated that there is nothing in the Act, but he thought it would be similar to obligations of any violations of law. Mr. McLean, Counsel, Fair Political Practices Commis- sion, responded to questions regarding Redevelopment Law that if there is a contractual relationship between entity A and the Redevelopment Agency and that an actual conflict of interest became a reality at a later date, would that con- tract be abrogated"" Also questioned was what the legal obligations are for the Mayor and/or the Councilor Chief Administrative Officer if they know that at the time of the deal or shortly thereafter there might be effects on the City at a later time. Mr. McLean stated, that in response to the second question, there's nothing in the Political Reform Act that indicated what that obligation is or if there is an obligation if there is knowledge of a conflict. He also stated he didn't know if this subject is covered in another act. He stated that the POlitical Reform Act does provide that if there is a vote that occurs in violation of the Political Reform Act and someone seeks an injunction to stop the action from occurr ing, there is authority in the Act for the Court to issue an injunction from any further action being taken. I f the court says that the vote af- fected the outcome, and it only needed three votes and it was 5-0, and there was one person disqualified, then this provision would not allow the court to enjoin the action. But if it was a swing vote, there could be an order for the Court to enjoin further action. Government Code 1090 and Health & Safety Code 33130 Sr. Assistant City Attorney Briggs answered questions regarding Health & Safety Code Section 33130 and Government Code Section 1090, which both apply if any member of the board or the cOlrunission has a contractual interest in the contract. Under such circumstances if that interest isn't disclosed and the board goes ahead and enters into the con- tract and its later found out, then the contract is void, just as it would have been if it had been disclosed at the time. The Commission and the Council cannot enter into a 12 10/23/86 contract in which any member of the body has a financial interest whether that interest is known or not. If it later becomes known, then that contract can be set aside. Mr. Briggs referred to a Supreme Court case Thompson "'$. Call where a councilman sold property to a developer who in turn sold it to the City. That whole transaction was set aside and the Councilman not only lost the property which the City got to keep, but had to pay to the City all the money that he received from the property plus interest. Mr. McLean, Counsel, Fair Political Practices Conunis- sion, stated that consequences of violation of the Political Reform Act may be different from the consequences that occur in violation of Government Code Section 1090 or in provi- sions of the Health & Safety Code. Sr. Assistant City Attorney Briggs answered questions regarding the possible codification of all conflict of interest laws and stated that legislation was pending to give the Fair Political prdctices Commission authority to at least render advice on Government Code Section 1090, which they can't do now. When there is a complaint or a request for advice, the Fair Political Practices commission can only respond in terms of the Political Reform Act. He stated that if there is a 1090 type of situation involved, that is a contractual interest, as opposed to a strict conflict of interest, they can't even talk about it. Mr. Briggs pointed out, for instance, some of the questions referred to Mr. McLean this morning were about nonprofit corporations where members of the board want to participate in decisions af- fecting them, and that is a 1090 type of situation. Also, there is a statute as part of Government Code Section 1090 that says if the Council Member or the member of the legis- lative body actively lobbies for the decision then he loses his exemption from 1090, as a nonprofit and the contract then becomes void. Mr. McLean, Counsel, Fair Political Practices Commis- sion, answered questions about the Commission's authority to issue opinions or advice. He stated that the Conunission can provide general guidance, but cannot answer a specific disqudlification except to the public official who has a potential conflict or his/her representative. He stated that the regulations only relate to the Commission, and don t include any reference to a local City Attorney. Mr. McLean, Counsel, Fair Political Prdctices Commis- sion, answered questions, stating that an opinion from the City Attorney does not provide immunity to the Council Mem- ber requesting advice on a conflict of interest. An opinion in writing from the Conunission does provide immunity from enforcement action. Ci ty Attorney Prince answered questions, stating that the Attorney General answered questions regarding violations of Government Code Section 1090. ADJOURNMENT At 11:45 a.m., the meeting was adjourned. ___ ,~#~U4/ ..- Clty Clerk 13 10/23/86