FPPC Advice Requested on Conflict Issue

The state Fair Political Practices Commission has been asked by the city to decide whether City Councilman David L. Margrave’s votes to approve more than $14,500 in payments to his own plumbing company since his election in 1982 are in violation of state conflict-of-interest laws.

Margrave’s relationship with the plumbing firm has been well known and his votes in connection with it were made on the advice of a former city attorney, both Margrave and other city officials reported. But at a recent council meeting Councilman Lee Prentiss questioned the votes and Margrave’s doing business with the city.

“There is new leadership in the city and there is a new city manager and a new city attorney,” Prentiss said. “We can’t have a shadow over the city.”

City Atty. Ronald J. Einboden said Wednesday that he has asked the FPPC for a letter of advice on Margrave’s possible conflict of interest under the state Political Reform Act of 1974. Einboden said he made his inquiry at the request of the Council.

Einboden, who took over as city attorney in October, said he is not certain whether former City Atty. Charles Martin’s interpretation is correct. He said he plans to issue his own opinion after he receives the commission’s response, which is expected in about two weeks.

City Stops Doing Business With Firm

Meanwhile, the city has stopped using the plumbing firm’s services, city officials said.

Einboden said he also is reviewing other laws that may apply to the Margrave case. Specifically, Einboden said, he is studying the applicability of state Government Code Section 1090, which states that city officers “shall not be financially interested in any contract made by them in their official capacity” and that city officers shall not “ . . . be purchasers at any sale or vendors at any purchase made by them in their official capacity.”

A violation of section 1090 is punishable by a fine up to $1,000 or by imprisonment and a ban on holding public office again, Einboden said.

Margrave, who is president of Morrow and Holman Plumbing Inc., which he owns with his wife Diane, has never made secret of his business relationship with the city or the fact he has voted to approve every plumbing bill to the city since his election. He has steadfastly denied that he has a conflict of interest.

“If you’re narrow-minded, you can see a conflict,” Margrave said. “If the FPPC rules I should not do plumbing (for the city) anymore, I will not. If it doesn’t, I continue to work.”

Margrave has voted on the billings since Martin advised him shortly after Margrave’s election that there would be no conflict of interest. Martin had cited a provision of Government Code Section 1091 stating that an official who has supplied goods or services to a “contracting party” for at least five years before assuming office has no conflict of interest in voting to continue that business.

The issue was raised anew by Prentiss at the March 6 council meeting. Prentiss objected to the payment of a $1,386.76 bill to Morrow and Holman until the matter was resolved. Prentiss said in an interview that the council directed Einboden to conduct the inquiry.

City records show that from January, 1980, until Margrave was elected to the council in April, 1982, his company billed the city for $2,495.04 in services. In roughly the same length of time after his election, the company’s billings nearly quadrupled, to $9,279.14, the records reveal. The company billings have totaled $14,666.31 since Margrave assumed his council seat.

Margrave said his company’s work for the city increased because, in an economy move in which he sided with the council majority, the city eliminated many employees, including those who used to do plumbing maintenance.

Margrave said he has bid against other firms for at least some of the work, but City Manager John Bernardi said Margrave’s firm has never bid for a specific job or service contract and that Margrave’s plumbing company has been the only plumbing concern to do business with the city since Margrave took office. Bernardi said that the city generally does not ask for bids for maintenance services and that it commonly uses outside firms for maintenance work including landscaping and painting.

FPPC spokesman Lynn Montgomery said that under the state Political Reform Act, an official with more than a $1,000 investment in a concern doing business with a city has a conflict of interest if the annual business the official does with the city amounts to at least $100,000 or at least 1% of annual gross revenues, or to $50,000 or 0.5% of annual net profits or 0.5% of the current assets or liabilities.

Margrave said his business grosses $1 million a year and that the amount of business he receives from the city is a negligible part of his operation. If Margrave’s figures are accurate, his firm’s highest annual income from the city--$6,571.28 in 1983--would be less than 1% of his firm’s annual gross revenue.

Margrave placed ads in two local newspapers last week that included the full text of Einboden’s letter to the FPPC. Margrave told he readers he would continue to deliver “the best possible service to the city.”

Councilman Robert Wagner, a longtime political foe of Margrave’s, said he has advocated a ban on councilmen doing business with the city since he joined the council last year.

Margrave said the conflict-of-interest question was raised for political purposes not by Prentiss or Wagner, but by the Committee for Responsive Government, a group of local citizens who have frequently criticized City Council actions. Its members include several former council candidates.

Tom Biesek, who heads the committee, confirmed that he supplied information about Margrave’s billings to city officials. Biesek also suggested that Morrow and Holman overcharged the city for some work, a charge Margrave denied. City officials, however, said they are looking into the matter. Biesek said that he considers Margrave a friend and that Margrave was warned that his votes on the warrants were considered by some to be a conflict of interest.

Margrave said he viewed the admonitions as political threats and decided to bring the issue to the fore with the ads now rather than wait for his political enemies to use it against him next year, when he plans to run for reelection.