Dealings may pose trouble for Garofalo

Theresa Moreau

HUNTINGTON BEACH -- Initial findings from a city investigation into

whether Mayor Dave Garofalo violated conflict of interest laws as

publisher of the local visitors guide show “these sources of income to

him may create problems,” City Atty. Gail Hutton said.

Hutton launched the investigation last week to decide if Garofalo

violated a state law that forbids City Council members from doing

business with the city.

The city attorney’s office is trying to uncover the trail of a $2,995

check that a Downtown developer made out to David P. Garofalo &

Associates for an ad in the city-sponsored visitors guide, which Garofalo

has published since 1993.

If her office finds that the check was deposited into Garofalo’s company

account, it could prove that his company profited from city business,

Hutton said in an hourlong interview.

Hutton said if Garofalo is found to have violated state law, she will

forward the information to the district attorney’s office.

Garofalo has denied wrongdoing and said he has acted on the advice of the

city attorney.

Hutton, who donated $275 to Garofalo’s 1998 reelection campaign, said she

expects to wrap up her investigation in the next couple of weeks.

Also last week, Garofalo announced he would step away from his role as a

publisher until the matter is reviewed by Hutton’s office and the Fair

Political Practices Commission.

The state commission will investigate whether Garofalo broke a different

conflict of interest law when his company received Commercial Investment

Management Group’s $2,995 advertising check and four months later he

voted to push forward its $46-million Downtown project.

Garofalo is the publisher of the Local News and the city-sponsored

Huntington Beach Conference & Visitor’s Bureau visitors guide. Garofalo

has held the contract to publish the visitors guide since 1993, two years

before he took a seat on the City Council. During his tenure on the

council, Garofalo has voted more than 87 times on matters involving

advertisers in the visitors guide. Those advertisers include such

heavyweights as:

* the Waterfront Hilton Beach Resort hotel;* Hearthside Homes, formerly

Koll Real Estate Group;

* Huntington Seacliff;

* Seacliff Village;

* Commercial Investment Management Group, which has proposed a hotel,

retail and restaurant project Downtown.

Garofalo has said he sold the Local News in 1997 to Huntington

Beach-based Coatings Resource Co., owned by former Planning Commissioner

Ed Laird. But county records show conflicting information. Paperwork

filed with the county doesn’t reflect a change of ownership until January

1999, at which time the owner is named as Air Quality Consultants, a

company headed by Laird’s son, Jeff Laird. And papers filed with the

county in April name Garofalo as the owner since 1993.

Hutton is compiling a packet detailing those issues and information

regarding the check from Commercial Investment Management Group, which

she plans to forward to the Fair Political Practices Commission for

review.

“It appears that David P. Garofalo & Associates, a dba and a corporation

that [Garofalo] owns, received the check, and he in turn thereafter

immediately transferred that money to Coatings Resource,” Hutton said

during the interview in her City Hall office.

Scott Field, one of two assistant city attorneys who monitored Hutton’s

interview, said Garofalo’s acceptance of the check poses a problem even

if it landed in his business account temporarily.

“Even though it passed through the account, it appears to be a source of

income or a potential source of income,” Field said.

So far, Hutton said, Garofalo has been cooperative in the investigation,

though the information he has provided may not bode well for him.

“Mr. Garofalo has come forward, he is providing us with information, and

we have concluded that some of these sources of income to him may create

problems,” Hutton said. “And until we have an FPPC opinion, [the city

attorney’s office is] advising him not to vote on [businesses] where he’s

taken money for ads.”

But the trail of the check may not be easy to find, mainly because

Hutton’s investigative power is limited.

“I don’t have the kind of investigatory capability to go on and subpoena

records and do all that,” Hutton said. “I ask [council members] for their

records and try to give them the best lawfully supportable opinion that I

can.”

Since Garofalo was elected to office in 1994, the city attorney’s office

has reviewed his tangled web of business dealings several times for

possible conflict of interest violations. Each time, Hutton said, the

review was conducted at Garofalo’s request. But the office has never been

able to make a definitive judgment.

“We have not been able to -- beyond a reasonable doubt -- come to the

conclusion that it is a [conflict of interest] violation,” Hutton said.

As part of her investigations, Hutton said she conducts interviews and

sometimes requests documentation. When paperwork is not available, her

office takes a statement. All interviews are then transcribed and later

signed by the individuals questioned.

If the information gathered poses a serious legal problem, Hutton said

she will advise the elected official to consider hiring a private

attorney -- advice she said she has recently given to Garofalo.

Hutton did not disclose the nature or content of the documents she has

gathered from Garofalo, nor did she elaborate on discussions Garofalo has

had with her office. Hutton also did not respond to follow-up questions

faxed to her from the Independent.

Hutton said she has found the job of investigating the 54-year-old

Garofalo troublesome, at best.

“It’s awkward because [council members] are kind of at risk when they

come and talk to me about [possible conflicts of interest] because I’m

also responsible to make sure the city is free of corruption,” Hutton

said.

Hutton has also received information suggesting Garofalo’s conflicts of

interest with the city may date back to his time serving on the

Conference & Visitor’s Bureau Board of Directors. Staunch Garofalo critic

Debbie Cook late last week sent Hutton a copy of a Fair Political

Practices Commission ruling that stated the Bakersfield Convention &

Visitors Bureau is bound by the Political Reform Act because it is a

nonprofit, city-funded agency that was formed to conduct business

typically performed by the city.

Cook, an environmental attorney, surmised that the Huntington Beach

Conference & Visitor’s Bureau would also be governed by the same conflict

of interest laws because it, too, is a nonprofit, city-funded agency that

performs services traditionally handled by the city, namely promoting

tourism. Garofalo served as a voting member of the bureau’s board of

directors from 1993 to 1996, and returned as an ex-officio member of the

board in 1998.

“In my opinion, there is no longer any wiggle room for Garofalo with

regard to a violation,” Cook said.

This won’t be the first time the Fair Political Practices Commission

reviews Garofalo’s business dealings.

In 1998, Hutton dispatched a packet of information to the state agency

after articles in the Independent raised questions about a vote Garofalo

cast to approve a city grant for the Conference & Visitor’s Bureau, and

his relationship with advertisers in the visitors guide and the Local

News. The commission reported back that it didn’t have enough information

to make a decision but advised him that even with a sale of his business,

he should abstain from voting on matters affecting advertisers for one

year.

Hutton stressed she’s not taking this latest investigation lightly.

“I’m not saying this is a little crime, and therefore we should let him

do it,” Hutton said. “I’m sure this is a little confusing, but if there’s

anyone who has the straight scoop on this, I think the only one would be

Dave Garofalo.”