Downtown Alhambra Revival Stirs Up Business and Controversy

Arthur Wong, an Alhambra businessman, thinks it stinks.

It’s not just that the city of Alhambra wants to forcefully acquire his property to allow a private developer to build a theater and shopping complex there. It’s that two of the council members who voted for the deal also have financial interests near the area.

Vice Mayor Mark Paulson is a real estate agent who manages and rents out property across the street from the site. And Alhambra Redevelopment Agency Chairman Paul Talbot had a partnership interest in a restaurant 1 1/2 blocks away, which he sold two years ago--but is still receiving sale payments.

It’s not uncommon for elected officials to have financial stakes in the community they serve. But those with conflicts of interest--real or potential--normally would not be allowed to vote on such projects.

How Paulson and Talbot, who were both reelected Tuesday to their council seats, were able to participate in the city’s approval of a $20-million development by Edwards Theater Circuit Inc. and Edwards Megaplex Holdings, offers a window into the sometimes surprising terrains of California’s conflict-of-interest laws.

The state’s Political Reform Act prohibits public officials from participating in decision-making when they have an economic interest, such as owning property, earning income or receiving sale payments, that could be affected by the outcome.

But the law also requires higher-than-normal majority votes for certain municipal decisions. When the number of officials with conflicts of interest makes such approval impossible, the law allows them to be “rehabilitated” and restores their voting power under what is often called “the rule of necessity.”

Under this rule, so-called conflicted officials must disclose their interest. If the decision cannot be made without their participation, they are eligible to be rehabilitated.

“You can’t stop government just because some decision-makers have conflicts,” said Robert M. Stern, co-director of the Center for Governmental Studies, who co-sponsored the Political Reform Act.

The “rule of necessity” can have a perverse effect: a conflicted official who normally would be barred from voting may be able to participate only because one or more of her colleagues also have conflicts of interests.

Imagine, for example, a five-member city council where only one person has a conflict of interest. If a decision requires a quorum of three or “super-majority” of four, the sole conflicted member will always be barred from voting on that matter. But if others also have conflicts, each conflicted member then has a chance to participate in the decision. A lottery determines which council member will be rehabilitated.

That’s what happened in Alhambra, where all five council members comprise the redevelopment board.

In addition to Paulson and Talbot, Councilman Talmage Burke owns residential rental property near the Edwards project. All three recused themselves from voting. But when the agency needed a quorum to approve the Edwards deal in March, it chose Paulson by lot, rehabilitated him and got his vote.

On Oct. 12, when the agency needed a super-majority to proceed with a condemnation lawsuit--required for eminent domain--against Wong and another property owner, it chose Talbot by lot, rehabilitated him and got his vote.

“There are some things that are perceptually unethical but are legal under the law,” said Gary Huckaby, spokesperson for the state Fair Political Practices Commission.

Wong’s attorney, William Driscoll, blasted that logic. “Why don’t they put someone on the [redevelopment] board who doesn’t have conflicts of interest?”

Adds Wong: “It may be the law, but it doesn’t mean it’s morally right.”

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Times researchers William Holmes and Julia Franco contributed to this story.