Newport Beach Mayor Mike Henn may have violated a City Council policy because he didn't properly disclose his financial interests in Lido Village's revitalization, according to the Newport Beach city attorney.
Based on the policy, Henn should have revealed his financial connections at a public meeting, even if he wasn't forced, under state law, to recuse himself from discussing or voting on Lido Village matters.
Henn has led the city's effort to rehabilitate the struggling seaside commercial district, where one of his consulting clients owns a shop.
Henn is paid more than $100,000 per year by the owner of Via Lido Drugs. He is also close friends with a major land owner who stands to benefit from the city's project.
The Daily Pilot on Aug. 13 first reported the mayor's business ties to Lido Village.
"It is somewhat indirect, but it is a definite connection and conflict, and he could have just stepped aside," said council watcher Jim Mosher.
Some of these relationships were discussed publicly about five years ago when the city was addressing rehabilitation home regulations, but Henn didn't reveal them again when the council first discussed the Lido Village revitalization plans in early 2010.
It appears that both Henn and current City Attorney David Hunt conflated the 2007 and 2010 issues, based on interviews with the two.
"The whole relationship is such old news at the city that people just stopped thinking about it," Hunt said.
In 2007, Henn asked one of the city attorneys and the state Fair Political Practices Commission if he was clear to vote on regulating group homes, despite a business relationship between some of the rehab operators and Via Lido Drugs. The FPPC said no, if the votes would trigger certain financial thresholds.
Soon after, the pharmacy stopped doing business with the rehab operators, and the city attorney advised Henn that he would be clear to vote.
Two years later, Henn asked Hunt if he could vote on revitalization, and the attorney analyzed the old opinions. Hunt also reviewed Henn's current connections to Lido Village, and determined that he would be clear to vote, based on state laws regulating politicians.
"I wasn't thinking about [the council policy] at the time," Hunt said. "I was thinking about the Political Reform Act."
He added that breaking this policy doesn't invalidate any votes, nor does it expose a council member to legal claims. But council members are required to read their policy manual, which contains the disclosure rule.
"It may have been a slip-up, but it doesn't have a consequence," Hunt said.