Official’s Vote Was Lawful, FPPC Says

Palos Verdes school board member Marlys Kinnel did not violate state conflict-of-interest laws when she voted in 1988 to ratify a policy giving an exemption from building fees to a number of developers, including the part owner of the mall where she did promotional work, state officials have ruled.

The ruling by the state Fair Political Practices Commission comes in response to a complaint filed last October by Rolling Hills Estates resident Joanne Petow. Petow’s complaint alleged Kinnel should have disqualified herself from voting on the policy because her employer’s interests were at stake.

“I knew I had done nothing wrong,” Kinnel said in an interview this week, adding that the complaint was a “very vicious tactic used to affect (last fall’s) election.”

The complaint was filed while Kinnel was running for reelection to the school board, seeking one of three open seats. Petow opposed her election, supporting three candidates who ran unsuccessfully as a slate. Kinnel handily won reelection.

Petow’s complaint stemmed from a $1.50-square-foot fee imposed on developers by the Palos Verdes Peninsula Unified School District. The fee went into effect in June, 1987, but district officials, without school board approval, granted exemptions to developers who contended their projects had been delayed beyond the deadline because of events out of their control.

Then, in June, 1988, Kinnel and other school board members unanimously approved a retroactive measure that officially instituted the district’s policy of granting the exemptions. The action allowed developer Ron Florance to retain a $274,500 fee exemption that he had previously been given for an 80-home development.

Petow alleged in her complaint that Kinnel should not have voted on the policy because she worked at the Shops of Palos Verdes, a mall owned by by H & F Associates, a partnership in which Florance is a general partner. As such, Florance should be considered a source of income for Kinnel, the complaint alleged.

But the commission disagreed. “The mere fact that Mr. Florance is a general partner in H & F Associates and has a 50% interest therein, does not support the conclusion that he should be considered a ‘source’ of income to Ms. Kinnel,” a commission attorney wrote in an April 24 letter to Petow.

“Rather, the partnership, H & F Associates, would be considered the ‘source’ of income to Ms. Kinnel. Based upon our investigation . . . there was no evidence that H & F Associates would have been materially affected by Ms. Kinnel’s participation in the governmental decision at issue.”

At the time the complaint was filed, Kinnel, who resigned from the mall job in December to devote more time to family matters, contended she did not work for Florance, but for a management company hired by H & F to run the mall. Florance said he never spoke to Kinnel about the exemption for his housing project and had nothing to do with hiring her to work for the management company.

Petow said she did not agree with the commission’s decision. “I am disappointed, naturally,” she said.

But she said that because Kinnel has stepped down from her job, “The conflict . . . has been removed.” Moreover, she said she is glad that the developer fee exemption granted to Florance has subsequently been rescinded.

David Capelouto, the district’s assistant superintendent for business, said the exemption on the property was removed late last year after Florance sold it to another company. The action was taken after the district’s lawyers indicated that the exemption was not transferable to another party, he said.

The new owner is paying the fee under protest, Capelouto said.