Orange Official Pays $2,000 to Settle Suit

The city manager of Orange has agreed to pay a $2,000 fine to settle a lawsuit alleging a conflict of interest involving a trash recycling firm executive who was recently indicted.

In the settlement reached Wednesday, David L. Rudat chose not to contest allegations in a suit filed by the Orange County district attorney’s office that he intervened in the aftermath of a real estate transaction brokered by Rudat’s wife for Jeffery Hambarian, the former president of Orange’s long-time trash recycler.

Rudat on Thursday admitted no wrongdoing and said he had agreed to the settlement only to avoid dragging out the ordeal. “I don’t need to spend more time and money to litigate this,” Rudat said. “I just may as well go along with it.”

But one city official criticized the settlement, saying it should not end investigations into the matter. “There’s no supporting evidence or facts or reports,” Orange Councilman Michael Alvarez said. “I feel we have to do our own due diligence to find out if there were any violations of law at the city government level.”

The district attorney’s office would not comment, saying the settlement has yet to be approved by a judge.

The agreement caps an 18-month probe of Rudat’s role in the 1995 sale of a $580,000 home owned by Hambarian. Rudat’s wife, Carol, a real estate agent, received a $13,735 commission for selling the home.

After the transaction closed, the buyers said they found numerous undisclosed defects and called a city inspector, who was unable to find permits for modifications that had been made to the house. He issued a number of citations for code violations.

When the buyers threatened to file a lawsuit, Rudat asked the inspector to review the citations, most of which were subsequently revoked.

In a 1997 report, Orange City Atty. David A. De Berry said Rudat’s involvement constituted a conflict of interest because Rudat’s wife was involved in the home sale.

On Thursday, De Berry defended Rudat, saying he did not benefit financially from his involvement in the matter. De Berry termed the violation a “technicality.”

“There was a violation, but it was unintentional,” he said. “Conflict-of-interest laws are very complex, and you can unintentionally violate them.”

But Alvarez said there was “no excuse” for Rudat’s actions. At the least, Alvarez said, “it shows bad judgment on Rudat’s part, particularly given that Jeffery Hambarian was involved.”

Last year Hambarian was indicted on 65 felony counts charging him with bilking the city out of $4 million in a 13-year fraud and embezzlement scheme. Hambarian, released from jail last month after posting $500,000 bail, faces a preliminary hearing in April.

Rudat, who had been city manager for only a few months when the housing transaction was done, said Thursday that his lack of experience contributed to his poor judgment.

“Knowing then what I know now, I would have steered a million miles away from it,” he said. “I would have handled it differently.”