Question of Conflict Raised in Orange

City Atty. David A. De Berry said Wednesday that he will ask the Orange County district attorney’s office to examine a possible conflict of interest involving City Manager David L. Rudat.

The possible conflict concerns actions that Rudat took or failed to take in city dealings with Jeffery Hambarian, the former head of Orange Resource Recovery Systems Inc., after Rudat’s wife sold a house for Hambarian.

Rudat, formerly fire chief in Orange, was named interim city manager in September 1995. In November 1995, real estate agent Carol Rudat sold Hambarian’s $580,000 home.

Under California’s Political Reform Act, officials are required to recuse themselves from governmental decisions in which they have financial interest.

In October 1995, the city was notified that money belonging to the city could not be fully accounted for by an auditor preparing the annual report for Hambarian’s company.

In February and April 1996, the auditor sent letters and reports to Rudat’s staff indicating that there were serious irregularities at the recycling company and that money belonging to the city was apparently missing.

The city manager said Wednesday that he had no idea there might have been a potential conflict.

“I’m frustrated because I know there’s no damn conflict and I don’t let myself be influenced by anything,” he said. “If I had understood the law, I might have made more overt attempts to steer clear of the issues. . . . I guess I got educated.”

Rudat said he asked De Berry to prepare a legal analysis of the potential conflict and send it to the state’s Fair Political Practices Commission and to the district attorney.

The city manager said he also informed the police in April that his wife had sold Hambarian’s house.

“The D.A. wasn’t concerned, but because of the notoriety of the case, the D.A. has asked for the analysis to be sent in,” Rudat said.

Carol Rudat, a real estate agent who specializes in luxury homes, said Wednesday that she doesn’t discuss her clients with her husband and never thought about the possibility of a conflict.

“I’ve developed a good business and I’ve done it on my own, entirely my own,” she said. “I absolutely did not know any of those rules.”

She added, “Of course, now I will pay very close attention.”