Councilman Releases Tax Returns : O’Connor, Cleator Continue Financial Debate

With the April 15 income-tax filing deadline as a backdrop, San Diego’s two mayoral candidates used the first debate of the runoff campaign Tuesday to continue their lengthy squabble over political and personal financial disclosure.

Seeking to prove that he is a “squeaky clean” mayoral candidate able to “remove the clouds” caused by recent City Hall scandals, San Diego City Councilman Bill Cleator released his 1985 tax returns and a financial disclosure statement Tuesday showing his net worth to be $1.8 million.

During a lunchtime debate before the San Diego Navy League at a Mission Bay hotel, Cleator also chided his opponent, former Councilwoman Maureen F. O’Connor, for refusing to fully disclose her assets, challenging her to join him in “laying all the cards on the table.”

While vigorously insisting that she has “nothing to hide,” O’Connor rejected Cleator’s demand and renewed her criticism of Cleator for his acceptance of campaign contributions from developers and his refusal to endorse a package of campaign finance reforms that she proposed earlier in the race.

In addition, O’Connor, in her own effort at “fully informing” voters, released a statement Tuesday--one not required by law--showing that she has received about $25,000 in campaign contributions in the last three weeks.

Since O’Connor and Cleator finished first and second, respectively, in the Feb. 25 primary, the runoff has been dominated by their skirmishes over financial disclosure, a fight in which the two have staked out different pieces of turf on the same issue. While O’Connor persistently has pressed for more complete disclosure of campaign contributions and finances, and has proposed changes in campaign laws, Cleator has repeatedly called for fuller disclosure of the candidates’ personal assets.

An inherent irony in the candidates’ occasionally sharp remarks Tuesday, however, is that both O’Connor and Cleator are in full compliance with existing personal and campaign disclosure laws. In short, each has faulted the other for not releasing more information about his personal and campaign finances than city and state laws now require.

Both mayoral finalists acknowledged that irony Tuesday but argued that, in the wake of recent City Hall scandals, candidates should meet a higher standard by going beyond disclosure laws. What has sparked their disagreement, however, is their inability to agree on how best to do that.

“I just think we have to put all our cards on the table . . . to (remove) this cloud that’s been hanging over the city for the last two to three years,” Cleator told about 200 people at the Navy League meeting.

Earlier, at a news conference outside City Hall, Cleator released his 1985 tax returns, showing that he and his wife, Marilyn, paid $7,788 in taxes on a taxable income of $44,627. The Cleators’ gross income last year was $89,515--including his $38,000 council salary, $30,000 in capital gains and about $21,000 in interest--but various personal and business deductions reduced that figure by more than half.

An accompanying statement of Cleator’s assets showed that he has a net worth of about $1.8 million, including an $860,000 interest in a local family-owned furniture business and a $400,000 Point Loma house.

“Anybody that is going to be running for mayor of one of the 10 largest cities in the United States should be willing to disclose any conflict of interest that (he) may or may not have,” Cleator said. “I want to be squeaky clean. I don’t want a soul out there to think that I am going to do anything that will benefit Bill and Marilyn Cleator.”

However, Cleator’s assertion that he had “disclosed all there is to disclose” was undermined by his refusal to release his furniture company’s clients--a list that conceivably could expose potential conflicts of interest.

Asked whether any of the firm’s clients also do business with the city, Cleator replied: “I don’t have the slightest idea.” Cleator explained that his firm, as required, does not do business with the city, but added: “I’m not going to tell my competitors who my customers are.”

During both the news conference and the debate, Cleator hammered away at O’Connor’s unwillingness to “disclose . . . down to the last dollar” the assets held by the former councilwoman and her husband, multimillionaire businessman Robert O. Peterson. If O’Connor does not fully disclose her personal assets, Cleator added, she will “leave a serious question mark in the eyes of the public as to why she won’t.”

O’Connor pointed out during the Navy League debate that, as required by city law, she filed a Statement of Economic Interests earlier this year that listed all of her and Peterson’s property holdings and other assets within two miles of San Diego.

“If the City Council and the city attorney feel strongly that the council and the mayor should disclose all assets and their income tax, as mayor, if I’m elected, I will abide by whatever ordinance is law when I take office,” O’Connor said. “I am abiding by every law that is . . . on the books now.”

Seeking to put Cleator on the defensive on the disclosure issue, O’Connor accused him of accepting $12,000 in anonymous campaign contributions--a reference to sub-$100 donations received by Cleator that, under city election laws, need not be identified by the donor’s name on campaign finance reports. Cleator later said that he is willing to disclose every contributor even though the law does not require him to do so.

In her attempt to shape the disclosure dispute to her own liking, O’Connor also told the Navy League audience that conflicts of interest are more likely to stem from campaign donations than from a public official’s personal financial holdings. In support of that contention, O’Connor noted that council members are forbidden from voting on issues that might affect their holdings or their family’s assets but can cast ballots on issues of interest to major campaign donors.

“Mr. Cleator . . . is free to vote on any item (affecting) developers that gave money to him,” said O’Connor, who has refused to accept contributions from developers. “If my husband had a project . . . I wouldn’t vote on it. That’s the difference.”

O’Connor has proposed that council members be banned from voting on issues relating to companies from whose employees they have received cumulative contributions of more than $1,000. The proposed ban would last for one year from the time that the contributions were received.

The voluntary campaign finance report that O’Connor released Tuesday showed that, from March 18 to April 4, she received contributions totaling $24,270. Last month, O’Connor pledged to release reports on her campaign finances every three weeks during the runoff, even though the next required report is not due until late May.