‘Flat-Out Wrong,’ She Replies : Cleator Aide Questions O’Connor’s Income Disclosure

San Diego City Councilman Bill Cleator’s mayoral campaign charged on Monday that his opponent, former Councilwoman Maureen O’Connor, may have failed to disclose $1,500 in monthly income for more than nine years--an allegation that O’Connor dismissed as “absolutely, flat-out wrong.”

In a letter sent to the state Fair Political Practices Commission, Terry Knoepp, Cleator’s campaign attorney, included a photocopy of a 1983 group insurance enrollment card signed by O’Connor and listing monthly income of $1,500 from R.O.P. Inc. The fact that O’Connor did not report that purported income on financial disclosure forms, Knoepp charged, “appears to be a flagrant disregard for campaign disclosure laws” that merits an FPPC investigation.

O’Connor, however, said that she has never received a wage from R.O.P. Inc., which she described as a “bookkeeping corporation” through which her husband, multimillionaire businessman Robert O. Peterson, “pays his personal staff.”

“I received no money, no salary and there was nothing to be reported,” O’Connor said. “If they’re saying I failed to report income, that’s false.”

The $1,500 monthly wage figure listed on the May, 1983, insurance form, O’Connor contended, was “simply a secretary’s estimate of what I was going to earn” as R.O.P.’s vice president.

“But I never took a salary, so the number’s irrelevant,” O’Connor said. “In fact, the whole form’s irrelevant, because the reality is that I received no income from R.O.P. Inc. It just looks like Cleator’s people are reaching into the mud bucket again.”

The Cleator camp argues that the insurance document demonstrates one of two things: either that O’Connor failed to properly report income on her Statements of Economic Interest since 1977, or that she knowingly signed an inaccurate insurance application form.

O’Connor filed the financial disclosure statements, required of public officials, because of her service on the City Council and later on the San Diego Unified Port District, and because of her candidacy in the 1983 and current mayoral campaigns.

The insurance form in question was an application for group coverage sent to National Group Trust. The application, which bears O’Connor’s signature and is dated May 1, 1983, states that O’Connor had been employed by R.O.P. Inc. since January, 1977.

Immediately above O’Connor’s signature is a paragraph in small type that reads: “I hereby declare that I am an active full-time employee of the employer indicated above and that I regularly work at least 30 hours per week. . . All information given by me on this form is true and complete and is offered as an inducement to grant insurance.”

O’Connor, however, said that she “never worked any regular hours” for the corporation, but added that she had occasionally “helped out around the office” when her husband, who suffers from leukemia, was ill.

A document filed with the California secretary of state’s office in December lists Peterson, O’Connor and John J. McCloskey as R.O.P.’s officers and board of directors. The same document defines R.O.P. as a “services-business management” firm.

O’Connor said R.O.P. is “not a business corporation in the normal sense” and that the organization essentially functions as a checking account through which Peterson pays his staff, including secretaries and housekeepers.

“R.O.P. has never had a meeting and it doesn’t provide any business advice at all,” O’Connor said. “It’s basically a holding company that (Peterson) uses to pay his personal staff. R.O.P. does no business, it’s not a business.”

McCloskey, O’Connor said, is a banker “and business associate friend” of her husband.

O’Connor added that, “to my knowledge,” the firm is not involved with any of Peterson’s business holdings. If the firm was involved with the business holding, it conceivably could preclude her from voting as mayor on any issues that might affect Peterson’s property and other holdings.

The Cleator camp’s letter to the FPPC, however, questions O’Connor’s explanation that R.O.P. is and has been uninvolved with Peterson’s business holdings, citing another document filed with the state showing that the corporation formerly was named “U.S. Grant Hotel Inc.” Peterson formerly held an interest in the U.S. Grant Hotel downtown but sold it before the mayoral race to avoid any conflict of interest for O’Connor if she is elected.

“The name’s certainly a coincidence for something that supposedly has nothing to do with (Peterson’s) business,” Knoepp said.

Meanwhile, O’Connor raised questions of her own about how the insurance application form, a private document, ended up in the hands of the Cleator campaign.

“I think that’s important to know, too,” O’Connor said. “Let’s take a look at their tactics. This isn’t a public record. How did they get it?”

Cleator’s campaign aides refused to fully answer that question Monday.

“It was given to me by someone . . . who said he was sworn to secrecy,” Knoepp said Monday night. “But I’m certain that it’s genuine. Its authenticity is beyond question.”

O’Connor, though, pointed out that the insurance form’s photocopy includes several factual errors. One mistake, obviously a typographical error, listed Peterson’s birth date as being in 1983. The form also states that O’Connor had been employed by R.O.P. since January, 1977--a time that, O’Connor said, predates R.O.P.’s formation.

O’Connor also claimed that another insurance form dated two months before the document in question shows her receiving no income from R.O.P.

Late Monday night, O’Connor said that she needs more time to answer several questions, including the time period during which she was covered by R.O.P.’s insurance policy.

O’Connor, who served on the City Council from 1971 through 1979, said that she was covered by a city insurance policy through 1979, but is not certain whether she simultaneously was carried on the R.O.P. policy or whether she currently is included in that policy.

“It takes longer to respond to the mud than it does to throw it,” O’Connor said.