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By Niki Cervantes
Staff Writer

December 2, 2015 -- Former Santa Monica City Manager Rod Gould has quit his consulting job as part of the settlement of lawsuit filed by local activists claiming he violated the City's anti-corruption law.

The settlement with Gould, who was hired by Management Partners after he retired from his municipal post, was reached November 27, according to an attorney for the plaintiffs.

The suit, which was filed in August, alleged that Gould violated the City’s 2000 Oaks Initiative by accepting employment with a private firm he repeatedly hired during his City tenure.

“We got everything we wanted,” said Bryce Gee, one of the attorneys representing the three members of the Santa Monica Transparency Project who filed suit.

In a letter to Mayor Kevin McKeown and the City Council, Gould said he agreed to the settlement because he could not afford to be personally sued.

“I do not have the resources to defend a lawsuit that carries with it the potential for significant penalties,” he wrote in the November 27 letter, which he emailed to the Lookout Tuesday after the settlement was announced by the Transparency Project.

As part of the agreement, Gould resigned immediately from his job at Management Partners, the San Francisco area consulting firm he signed up with after leaving his Santa Monica post in January.

Jerry Newfarmer, the president and CEO of Management Partners, confirmed he had accepted Gould’s letter of resignation and said Gould had already been on a leave of absence he had requested after the Transparency Project lawsuit was filed.

“He’s been gone ever since,” he said.

Newfarmer said his company was disheartened by Gould’s decision to leave, calling him a “consummate professional” snared by a “crazy” provision in the City’s Oaks Initiative that put him at “extreme financial risk.”

“It came as a major surprise to us and to him when he was personally sued,” Newfarmer said.

The lawsuit was filed in the Superior Court in Marin County, where Gould now resides. It came after the City declined to take action on a formal complaint the group filed with the City Attorney’s Office in June.

City Attorney Marsha Moutrie said her office could not take action against City employees and passed the complaints to county prosecutors, who also declined to get involved.

said the suit was filed only because the City did not act to enforce the Oaks Initiative.

“This is an important victory for Santa Monica,” said Mary Marlow, one of the plaintiffs and chair of the Transparency Project. “It is about time that the law is enforced. Unfortunately, residents had to do the enforcing because the City Attorney has refused to do so.

“The City has much greater investigative powers and resources than we do,” Marlow added. “Now that we have shown Oaks is alive and well, we expect the City to do its job.”

The Transparency Project contends Gould violated the voter-approved Oaks Initiative when he went to work for Management Partners after repeatedly approving City contracts with the firm during his five years as City Manager.

The settlement calls for Gould to resign from Management Partners and to decline to work for any company for which he approved City contracts until January 31 of 2017.

Gould also will pay $20,000 to cover the plaintiffs legal fees and related costs.

The other plaintiffs were Elizabeth Van Denburgh and Nancy Coleman. Fred Woocher, Bryce Gee and Beverly Grossman Palmer of the law firm Strumwasser & Woocher, LLP, represented them.

The Oaks Initiative amends the City Charter to specifically prohibit public officials from receiving personal benefits “from a person or entity” after official votes or from any “official action.”

Under the Oaks Initiative, City public officials are barred from receiving personal benefits tied to their employment “for one year from the time the City public official leaves office, or five years after conferring the 'public benefit,' whichever is shorter.”

The Oaks Initiative is the backbone of the City’s anti-corruption and conflict-of-interest laws, Marlow said.

“It helps ensure that the decisions of the City’s public officials are made solely for the benefit of the public,” she said.

Gould said he was caught by surprise when complaints followed his decision to move to Management Consultants, which works extensively with governments and is heavily staffed by those who come from the government ranks.

Gould said he was frustrated with the City's failure to take a firm position on its interpretation of the Oaks Initiative.

“That lawsuit has put me in the middle of a dispute between the City and the Charter proponents over enforcement of the Oaks Initiative Charter Amendment,” Gould said in the letter.

“Yet the City has refused to participate in the lawsuit or otherwise seek a judicial determination that its interpretation of the Oaks Initiative is correct and that the measure does not apply to employees,” he wrote. “That puts employees like me, who relied on the City’s prior position, in an untenable position.”

Gould also said it was not appropriate for him to contest the Oaks Initiative “since the dispute over the interpretation of this Charter provision is not mine.”

“Consequently, I have entered into a settlement that involves my relinquishing a job that was meaningful and allowed me to use my skills to better local governments,” Gould said.

Gould said the City “can no longer ignore this City Charter provision. It is now very important for the Council to clearly state how it will interpret and apply the Charter provision on employment going forward so that it may be properly administered and enforced and that other career public servants do not wind up as unwitting targets of civil lawsuits.”

He recommended several steps that the City Council could take to clarify the Oaks Initiative, including a clearer definition what constitutes a “public official,” and what positions in city government the Oaks Initiative includes.

Gould also recommended that City employees be better informed of the charter amendment when they start their jobs and be notified that they might be included when they are involved in negotiating and approving contracts.

“Staff estimates that during my tenure I approved over 6,500 contracts,” Gould said.

He also called on the City to adopt a way to enforce the initiative “administratively rather than through costly litigation.”

Last year, the Transparency Project accused then-Mayor Pam O’Connor of accepting campaign contributions from developers in violation of the Oaks Initiative.

The City Attorney’s Office passed on getting involved , although O’Connor did go on to return some of the money.

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