Councilman Fails to Report Wife’s Income From Firm : Ethics: Gary L. Hausdorfer might have violated state law in not disclosing the information. His spouse works for a company that has city contracts.

City Councilman and regional transportation commissioner Gary L. Hausdorfer, in possible violation of state law, has failed to disclose income received by his wife from a prominent planning and engineering firm that does business in the city.

Records reviewed by The Times also show that Hausdorfer--who was mayor at the time--voted in September to approve a city contract with a company whose subcontractors included the firm that employs his wife.

In an interview, Hausdorfer said Friday that he was unaware when he voted that his wife’s employer, The Keith Cos., was authorized in the contract to receive $8,100. That vote and his failure to report his wife’s income on his 1988 and 1989 disclosure forms, he said, might have been “mistakes.”

“You try to avoid all these things, and life’s too short not to,” said Hausdorfer, who owns a commercial mortgage business. “ . . . If I’ve made mistakes, then I’ll take the blame. . . . We certainly have nothing to hide.”

Hausdorfer’s wife, Debora, is director of public affairs for The Keith Cos., a firm that does work on behalf of developers and public agencies throughout Orange County. She said that she began working for Keith in late 1988 and that her duties include efforts to obtain new contracts--although not in San Juan Capistrano.

State conflict-of-interest law requires public officials to disclose the sources of their income--including community property income generated by a spouse--and to abstain from governmental decisions that affect those income sources.

In addition to being a councilman since 1978, Hausdorfer also is a member of two powerful regional transportation agencies: the Orange County Transit District and the Foothill-Eastern Transportation Corridor Agency.

Hausdorfer said that he recently abstained on one matter that came before the Foothill Transportation Corridor--the agency that is building two toll roads in eastern Orange County--because The Keith Cos. had an involvement.

“I don’t vote on anything that has their name on it,” said Hausdorfer, 44.

The San Juan Capistrano council vote involving the Costa Mesa-based firm came in September, at a time when Hausdorfer was serving as mayor. The issue was whether to approve a $304,197 contract for a study of how to use 140 acres of agricultural land that San Juan Capistrano voters agreed last spring to acquire through a $120-million bond issue.

The Keith Cos., which had received earlier city payments for studying the 140 acres and surrounding properties in the city’s northwest area, was authorized in the September contract to get $8,100 of the total award. After presentations by planners and discussion, the council voted unanimously to approve the contract, according to minutes of the meeting.

“If they (The Keith Cos.) are officially a part of the team, I didn’t know it, and it wasn’t pointed out to me” at the time of the council’s vote, Hausdorfer said, noting that the bulk of the award went to The Keith French Group, a San Clemente firm unrelated to the company that employs Debora Hausdorfer.

Hausdorfer had championed the open-space initiative approved by voters last spring. And, The Keith Cos. has been involved in studying that land since at least 1988, according to city records.

San Juan Capistrano paid The Keith Cos. $19,081--on Aug. 10, 1989, and on June 28, 1990--for work related to the city’s “Northwest Planning Study.” Records reviewed by The Times also show that, beginning in May, 1987, and continuing through October, 1990, San Juan Capistrano paid the firm $109,321 for other professional services. The council approved all the Keith payments in routine “consent calendar” actions.

Hausdorfer, commenting on his not reporting his wife’s income on his disclosure statements, said that he did not believe he was required to do so because Keith was not operating and “located” in San Juan Capistrano.

State law, however, requires officials such as Hausdorfer to disclose such an income source if the company is located or has done business within the city, according to Jeevan Ahuja, an attorney with the state Fair Political Practices Commission. Ahuja said that a company’s physical location is irrelevant.

“If that’s the case,” said Hausdorfer, “it’s easy to amend (the earlier disclosure statements) and I’ll check with the FPPC and the city attorney.”

The Keith firm has been active with a number of other significant projects in San Juan Capistrano since the mid-1980s, including the planning and designing of a members-only development that was approved by the council in 1987 and 1988--the Marbelle Golf and Country Club.

Hausdorfer said his wife went to work for Keith in late 1988 after being introduced to the firm’s owner by her former employer.

“I stay out of my wife’s business career,” Hausdorfer said. “She stays out of mine.”

Times staff writer Jeffrey A. Perlman contributed to this report.