Guilty Plea by Garofalo Ends Finance Probe

Former Huntington Beach Councilman Dave Garofalo pleaded guilty Thursday to one felony and 15 misdemeanors for repeatedly voting on matters involving companies that bought advertising from his publishing business.

The plea ends a 17-month investigation by local and state prosecutors.

Garofalo, who resigned from office last month, was given a suspended sentence by Superior Court Judge Ronald P. Kreber and placed on three years’ unsupervised probation. He must pay fines totaling $49,700 and complete 200 hours of community service by April 1, 2003. He also cannot run again for public office unless he can persuade a judge to clear his record after three years.

Of his fines, $47,000 will be paid to the state Fair Political Practices Commission for 24 counts of violating financial reporting laws. The commission is scheduled to formally approve the civil fines at a meeting Tuesday in Sacramento.

The FPPC agreement requires Garofalo to pay $2,000 immediately and the rest in 90 monthly payments of $500.

The former councilman spoke cordially Thursday outside the courtroom about what he called his “massive, total self-destruction.”

He insisted that he didn’t realize it was illegal to vote after soliciting tens of thousands of dollars in advertising from businesses seeking city decisions. He said the punishment was harsh but admitted that he broke the law.

“I’ve got to take my medicine,” Garofalo, 56, said. “I’ve become the icon. The icon has to pay the bill.”

But prosecutors said Garofalo’s behavior was not a case of a local official inadvertently stumbling over state law. His votes spanned two years and were “flagrant, repeated and consistent,” Dist. Atty. Tony Rackauckas said.

“The disposition on this is a very good one,” Rackauckas said. “It puts into perspective what was going on with Mr. Garofalo.”

The felony violation stems from Garofalo’s vote in 1999--with a unanimous council--for the city to fund the Huntington Beach Conference and Visitors Bureau, for which Garofalo had published an annual visitors guide since 1993. Under the contract, the city funded the nonprofit bureau with $200,000 for 1999-2000 and $270,000 for 2000-2001. The agreement allowed Garofalo to keep the advertising revenue from the guide.

Garofalo also published a newspaper called the Local News, the directory for the city’s chamber of commerce and two political mailers called Huntington Beach Today, distributed in 1994 and 1998--the same years Garofalo ran for council.

The misdemeanor violations involved 15 companies seeking city approvals that paid Garofalo from $500 to $13,000 annually for advertising between January 1998 and August 2000.

The FPPC fine stemmed from Garofalo’s failure to report that and other income on annual statements of economic interest. Among the unreported economic benefits: being placed in the top position on a waiting list to purchase a home, which he sold a day later to a friend; and receiving a discounted rate from December 1997 to May 1998 for a three-room suite at the Huntington Beach Holiday Inn.

The commission estimated that the benefit of being first on the waiting list was $20,000. The fair market value of the hotel rooms was $267 a night; the resulting gift totaled $6,510 for 1997 and $32,550 during 1998, according to the FPPC.

Garofalo also failed to report advertising “trades” that included a $6,000 discount from the Waterfront Hilton for his daughter’s wedding; mirror and glass work at his house worth $1,673; patio furniture worth $3,896; home landscaping worth $6,315; and $4,000 in real estate commissions from Century 21.

His fine is neither the smallest nor largest levied in a political case: The largest fine topped $800,000, FPPC spokeswoman Sigrid Bathen said.

Attorney Debbie Cook, a chief Garofalo critic, filed ethics complaints against him in May 2000. Cook was elected to the council in 2000 and is now mayor.

“We’re just relieved that it’s over,” she said Thursday. “It was a year too long. It was clearly something that should have been investigated years ago and there wouldn’t have been so many complaints against him. People lose faith in government when things like this drag on and on.”

Fellow Garofalo critic Susie Newman, who also filed an ethics complaint against him, said she wasn’t satisfied with the sentence: “For the length of the investigation and the resources that were spent, this was a pretty meager end.”

The city began the investigation of the ethics complaints in June 2000, after The Times reported that Garofalo voted at least 87 times since his 1994 election on matters affecting advertisers in his publications. State law requires elected officials who receive $250 or more in income to abstain for a year from voting on matters involving the giver.

In August 2000, Garofalo became the target of investigations by the Orange County District Attorney’s office and the political practices commission. He continued to serve on the council, but abstained on votes involving advertisers beginning in June 2000.

Before the probe was through, the then-mayor would suggest that his votes could have topped 300.

During the same period, Garofalo deposited $61,046 into his bank accounts from payments by seven advertisers, according to court documents. There were more than 100 advertisers in the Visitors Guide from 1995 to 2000.

Garofalo insisted that he took care of the conflict-of-interest issue in January 1998 by selling his publishing interests to a friend, businessman Ed Laird. But investigators said that the sale was on paper only and that Garofalo continued to control all aspects of his publications--including sole check-signing authority--until June 2000.

“It became clear Garofalo violated the law and knew he violated the law and tried to cover it up,” said Deputy Dist. Atty. Michael Lubinski, who handled the case.

Huntington Beach community leaders said Thursday that they were glad the scandal is behind them.

“It was completely appropriate for him to resign in light of this,” Councilwoman Connie Boardman said. “I think it’s unfortunate when anyone in a position of power violates the trust of the people, but in this case at least he was held responsible for his actions.”

Ron McLin, owner of the Longboard Bar and Grill and a member of the Downtown Merchants Assn., believes that the controversy dragged on too long.

“I would like to have seen him get out of the council a long time ago,” McLin said. “I think it’s good to see us put this behind us.”

Councilman Ralph H. Bauer, who considers his former colleague a friend, said Garofalo has shown his character in other ways, by caring for his ailing mother and son “through some terrible times.”

“You measure the person by their children to some degree, and by that standard, he’s a pretty decent guy,” Bauer said. “I don’t believe in beating somebody when they’re down. He’ll pay the price and the system will do what it has to do.”

Garofalo’s daughter, Nancy Garofalo Gray, said her father had taken “beating after beating” over the last year.

“He loved serving the city of Huntington Beach,” she said. “It’s a shame it had to end this way. He tried his hardest to not have this affect people around him. He has remained passionate about the issues and his job and about his family through all of this.”

Garofalo said he hasn’t received a paycheck in more than a year and hasn’t decided what he’ll do next. He said he planned to take “a break” and assess his future, including where to serve his community time; the court must approve his selection. He sits on the boards of directors of 12 community groups.

He said his only regret was in “relying on others for advice”--a reference to City Atty. Gail Hutton, whom he has repeatedly said gave him the go-ahead to cast votes. Hutton has said she outlined the law and told him to follow it when voting.

Under the terms of his plea, Garofalo could petition a judge in three years to reduce his felony conviction to a misdemeanor, then to have it removed from his record--clearing the way for him to run again for office.

Asked if he would consider that, he replied, “I can’t conceive of being that stupid.”

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Times staff writer Jack Leonard contributed to this report.