O’Connor, Cleator Face Off Again Over Financial Issues

There’s an old sports adage that you can’t tell the players without a score card. And in the San Diego mayoral race, it’s getting so that you can’t tell what’s going on without an accountant and a lawyer.

Friday produced yet another round of squabbling over disclosure of the candidates’ financial interests, as City Councilman Bill Cleator accused former Councilwoman Maureen O’Connor of failing to properly report two holdings. Ironically, Cleator made that allegation while disclosing that, since 1982, he has violated financial reporting laws by failing to disclose a list of the major clients doing business with his family-owned furniture manufacturing company.

After some testy remarks and mutual finger-pointing, both Cleator and O’Connor announced that they are in the process of amending their financial statements to correct the disclosure errors related to the various transactions discussed Friday.

“Is this going to go on forever?” O’Connor asked upon being informed of Cleator’s charges, the latest in a series. “What is this, the financial-allegation-of-the-week game?”

After weeks of watching the two candidates trade barbs over financial disclosure--with most of the recent salvos originating from the Cleator camp--San Diego voters might well pose the same question.

Cleator conceded recently that the protracted debate over the candidates’ financial holdings “really doesn’t tell you who’s going to be the better mayor.” However, Cleator and his handlers have justified their emphasis on the issue by arguing that voters are overly sensitized to financial disclosure matters in the wake of former Mayor Roger Hedgecock’s forced resignation after his conviction of campaign law violations and Councilman Uvaldo Martinez’s indictment on charges of misuse of city funds.

“It’s really important that voters know that their next mayor is going to be squeaky clean,” said Cleator, who has released his income tax return and a net worth statement, and persistently chided O’Connor for not doing the same.

At a news conference at his campaign headquarters, Cleator charged that O’Connor violated state law by failing to disclose an interest in a North City parcel of property and income from dissolution of a restaurant.

The property in question is part of a 1,200-acre parcel formerly owned by O’Connor’s husband, multimillionaire businessman Robert O. Peterson, that was later developed into Fairbanks Country Club.

In response to earlier allegations from Cleator, O’Connor has explained that, before her 1977 marriage, Peterson and several partners donated 1,160 acres to charities, and sold the remaining 40 acres to Watt Industries, the firm that developed the Fairbanks project. The tract was in escrow until 1978, when the title was transferred to Watt.

O’Connor, who served on the council until 1979, has said that attorneys previously advised her that because the property was in escrow, it did not need to be reported. However, a spokeswoman for the California Fair Political Practices Commission said Friday that the land should have been listed on O’Connor’s financial disclosure forms.

“Property in escrow still is reportable,” said FPPC spokeswoman Lynn Montgomery. “It should be reported until the title actually changes hands.”

O’Connor said that she learned of the disclosure error several weeks ago, when another attorney contacted the FPPC as a result of Cleator’s earlier charges, and that she plans to amend her financial statements to correct the mistake.

“All of these disclosure forms have been done on the basis of the advice of attorneys,” O’Connor said. “We found out there was a technical problem on this thing and we’re correcting it.”

Cleator’s second allegation relates to income that Peterson received from liquidation of the Taco Factory Inc. Saying that Peterson received more than $7,000 in January from that transaction, Cleator charged that O’Connor had failed to properly report that income as community property.

O’Connor, however, said that the Taco Factory “is an entirely separate holding of my husband,” but refused to specify whether that arrangement was the result of a prenuptial financial agreement.

“It’s not mine, it doesn’t have to be reported and that’s all I’m saying,” O’Connor said.

Meanwhile, Cleator also released amendments to his own Statements of Economic Interests showing more than a dozen companies that have done at least $25,000 in business with Cleator Furniture. Disclosure laws require that public officials report business income of more than $10,000. Because Cleator owns 40% of the furniture company, sales above $25,000 trigger that reporting requirement--a fact that Cleator says he learned this week.

“I am making this information available immediately to reinforce my commitment to the fullest compliance with the law,” Cleator said.

Cleator also said that he would not be surprised to learn that some of his firm’s clients probably do business with the city.

“I don’t know for sure . . . but I would guess that most of these people probably do business with the city from time to time,” he said.