When transparency meets opacity

In 2000 voters in Santa Monica passed the “Oaks Initiative,” a charter amendment intended to stop corruption by preventing public officials from benefiting financially from decisions they make. Unlike laws against bribery, etc., that target actual malfeasance, the Oaks Initiative is based on a presumption. It presumes that only the promise of monetary benefit, in the form of campaign contributions or compensation for services, could have motivated any public official to make a decision beneficial to a person or entity if after making the decision the official receives a monetary benefit from the person or entity that received the benefit.

Oaks was nine years ahead of the Tea Party in its cynicism about government.

The Oaks Initiative is also odd because it doesn’t prevent officials from receiving benefits before making any decision. Worse, the Oaks Initiative, by restricting contributions directly to candidates, further encourages contributions to non-accountable independent campaigns that spend far more money in Santa Monica elections than the candidates themselves.

The Oaks Initiative was in the news last week because three members of the Transparency Project, including its founder, Mary Marlow, have brought a lawsuit against former City Manager Rod Gould for accepting employment from Management Partners, Inc., a company that Gould had hired while he was City Manager to perform services for the City. Marlow and the other plaintiffs brought the suit after City Attorney Marsha Moutrie told the Transparency Project that because of a conflict of interest, she could not enforce the law.

On its face, it appears that Marlow and her fellow plaintiffs have a strong case. Gould awarded contracts worth more than $25,000 to Management Partners, and within the relevant Oaks time period during which he was restricted from getting a benefit from Management Partners (two years after he left his employment with the City) Management Partners hired him.

However, after Oaks was passed, two trial courts found that it was unconstitutional. While those rulings were voided on appeal for procedural reasons, Gould will probably raise constitutional objections, and he may have other arguments. California law includes strong public policies in favor of a free labor market. For instance, in most circumstances California bans covenants not to compete. Courts might apply those policies against the application of Oaks when it prevents someone who hasn’t otherwise broken the law from getting a job.

But unless he has someone to pay his legal fees, there will be a lot of pressure on Gould to settle. Under Oaks, successful plaintiffs get 10% of any damages assessed against the defendant and repayment of their costs of litigation, but defendants who win have no redress against plaintiffs.

One thing is clear: the case further tarnishes Gould’s reputation. While Gould did a good job running the City after the Great Recession, his taking the job with Management Partners and the Elizabeth Riel fiasco raise significant questions about his judgment.

At the same time, the lawsuit raises questions about the Transparency Project and its collective judgment.

By any standard, let alone the standards of municipal government in California, Santa Monica is a well-governed city. Even if you believe that Santa Monica City Hall is a cesspool of corruption, do you think it stinks because a technocrat like Gould hired a firm of technocrats to help manage Santa Monica’s bureaucracy? The annual budget of Santa Monica is something like half a billion dollars; the total dollar amount of the four contracts Gould awarded to Management Partners was about $165,000, less than half of the annual compensation Gould received from the City, and I presume less than what he’s getting from his new employer. Sure, Gould done wrong taking the job, but is this really quid pro quo government?

Marlow and the other Transparency Project volunteers may be well intentioned, but the case reinforces the perception that the group is an adjunct of the no-growth side of Santa Monica politics. Here they’re bringing this lawsuit against Gould, but they’ve ignored the most opaque shenanigans in Santa Monica politics, namely the deal that got Sue Himmelrich the endorsement of Santa Monicans for Renters Rights (SMRR) in the 2014 City Council election.

Consider these true statements and then I’ll give you a thought experiment:

  • Months before SMRR, by far the most powerful political organization in Santa Monica, would be making its endorsements in the 2014 election, Himmelrich hired Denny Zane, a founder of SMRR, a member of its Steering Committee, and the most influential individual in SMRR, to be her campaign consultant.
  • Himmelrich failed to get the SMRR endorsement at the organization’s membership convention, and then she didn’t get the endorsement from the SMRR Steering Committee when it met behind closed doors after the convention. But a month later, at another closed-door meeting, Himmelrich’s supporters on the Steering Committee made a deal with two Steering Committee members who had strong ties to Santa Monica College to give the SMRR endorsement to Himmelrich if the Steering Committee also endorsed Andrew Walzer, who was running for reelection to the SMC Board of Trustees.
  • The SMRR Steering Committee makes its endorsements, the most impactful decisions in Santa Monica politics, not only in secret, but following rules and procedures that are completely opaque not only to the public but even to SMRR members.
  • Himmelrich’s husband gave tens of thousands of dollars in campaign contributions to organizations that run campaigns that are supposed to be independent of Himmelrich’s campaign.
  • Himmelrich spent over $100,000 of her own money to get elected, explaining that she would do whatever it takes to get elected.

Here’s the thought experiment. Substitute “Pam O’Connor” for “Himmelrich” in those statements. Then imagine what the reaction of the Transparency Project would have been.

Thanks for reading.

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