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Conflict of Interest Probe of Former City Manager Unlikely

Santa Monica Real Estate Company, Roque and Mark

Pacific Park, Santa Monica Pier

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

By Niki Cervantes
Staff Writer

July 8, 2015 -- Allegations that former Santa Monica City Manager Rod Gould violated local conflict-of-interest laws under  the 2010 Oaks Initiative will likely die at the City Attorneys office, according to City officials.

Citing its own conflict of interest concerns, the Santa Monica City Attorney’s office last month declined to investigate allegations that Gould violated the voter-approved law when he went to work for a firm for which he repeatedly approved City contracts during his tenure.

In a June 16 letter to the Transparency Project, the local watchdog group that made the allegations, City Attorney Marsha Moutrie advised the organization that her office can neither prosecute nor file a civil suit against a former client.

She added that the Los Angeles County District Attorney’s Office and the State Attorney General’s Office were also unlikely to pursue the probe.

Moutrie said she based her comments on a previous test of the Oaks Initiative that her office sent to the District Attorney’s Office. The 2014 complaint involved campaign donations to then-Mayor Pam O’Connor that the Transparency Project alleged were illegal, she said. 

The D.A.’s Bureau of Fraud and Corruption Prosecutions/Public Integrity Division sent Marlow and Moutrie a letter last fall stating it feared the D.A. would become “the de facto enforcer of this local misdemeanor offense.” 

It also stated that it had reservations about the “constitutional validity of this provision of the City’s Charter.”

Instead, the City Attorney’s office “create a wall of silence between an individual city attorney and the remainder of the office so recusal of the entire office is not necessary,” Patricia Wilkinson, head deputy of the Public Integrity Division, wrote in the November 24 letter.

The state Attorney General’s Office, which was also sent the Oak’s complaint regarding O’Connor, agreed.

“We concur with the District Attorney’s Office,” Lance Winters, senior assistant attorney general, said in an April 13 letter.

 “The assignment of a deputy city attorney who is a properly insulated from the rest of your office and the City Council should obviate any conflict concerns,”

Moutrie, however, did not agree.

In her June 16 letter to Marlow, Moutrie said she did not concur “because among other things, I do not believe that the public would have confidence in that attorney’s objectivity and independence and the attorney would apparently not be accountable to anyone.”

As an alternative, Moutrie noted that the City Council “might be able to hire outside counsel to enforce the Oaks Initiative or enter into a reciprocal agreement for enforcement with another city where the Oaks Initiative passed, such as Pasadena.”   

In addition, she noted that any member of the public could file a complaint in court, a suggestion that Marlow would not specifically comment on, saying only that her group “is looking at all the options.”

The disagreement between the City Attorney and The Transparency Project is not only a procedural one.

The Santa Monica watchdog group alleges it was a conflict of interest for Gould to leave his post and then months later go to work for Management Partners, a consulting firm that often did business with the City with Gould’s approval.

Moutrie, counters that the Oaks Initiative does not apply to the alleged conflict because it hasn’t been shown that Gould lived in Santa Monica when he accepted Management Partners’ offer.

“The announcement of his employment with Management Partners came recently, within the last few weeks, months after he moved to Northern California,” Moutrie wrote in her June 24 letter. “Moreover, your group’s complaint includes no allegation that the employment agreement was made in Santa Monica.”

She also says it is unclear whether the initiative applies to City staff.

Marlow counters that the law clearly states that the City Manager is included, and says Moutrie’s claim that the issue is moot because Gould currently lives elsewhere was made without “reference to law or setting forth a legal standard.”

Marlow’s organization focuses on six occasions when Gould approved contracts for Management Partners while he was city manager. The approvals were in cases where a City Council vote was not needed. 

The Oaks Initiative  “prohibits a public official from receiving specified personal benefits from a person or entity after the official votes, or otherwise takes official action, to award a ‘public benefit’ to that person or entity,” Marlow said.

The complaint calls for the funds received by Gould from Management Partners to be repaid to the City. Gould also should be barred from working for Management Partners until 2017, which Marlow said is required by the City law.

Gould, who announced in May that he had joined Management Partners, a consulting firm that helps governments improve their performance, has declined to comment on the complaint.

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