Friday, January 7, 2011

The Fair Political Practices Commission and Tom Fuentes

     Months ago, DtB noted the curious fact that Trustee Tom Fuentes did not list LFC (Lang Financial Corporation) on his economic disclosure forms. In fact, Fuentes has flatly stated that he has no financial interest in LFC. DtB, however, found seemingly clear indications that, at least until a few years ago, Fuentes was a Senior Vice President with the firm.
     Today, the OC Reg reports that, according to Fair Political Practices Commission officials, Fuentes seems to be violating the law:

Should public official have disclosed business relationship?

     Should a public official disclose his status as an officer of a company that does business with public agencies, even if he doesn’t get paid?
     The Fair Political Practices Commission says yes.
     Tom Fuentes, former chairman of the Orange County Republican Party, long-time trustee of a community college and senior vice president of a Newport Beach auction house called LFC, says no.
     Fuentes maintained an office at LFC for about three years beginning around 2004, he says. As recently as this week, he was still sending out emails on an LFC account.
     But as our colleagues over at Voice of OC have reported, Fuentes never mentioned LFC on any of the economic disclosure forms he was required to file from 2004 to 2010 as a trustee of the South Coast County Community College District.
     That’s a potential violation of state law, punishable by a fine of up to $5,000 for each violation, the FPPC says.
     Fuentes’ relationship with the auction house and with Public Administrator/Public Guardian John S. Williams, who uses LFC for land sales, has drawn the interest of county officials.
     Williams’ office was criticized in two Orange County grand jury reports in 2009, and has come under renewed fire since August. That’s when former state Assemblyman and county supervisor Todd Spitzer was fired from his post at the Orange County District Attorney’s office after he started asking questions about a conservatorship being handled by Williams.
     Fuentes and Williams served together on the community college district together for years until Williams resigned last month.
     Williams also gave a testimonial for LFC on the company’s website, praising LFC’s Internet-based auction program and highlighting its work to help Orange County out of its bankruptcy in 1990s.
     County officials worry that this is all too cozy; the supervisors have ordered a review into the Public Administrator/Public Guardian’s Office along with its dealings with LFC.
     In an email obtained by The Watchdog through the California Public Records Act, Fuentes explained to Williams his relationship with LFC. Williams had asked him to write the explanation, Fuentes told The Watchdog.
     Fuentes acknowledged in the Sept. 28 email he had maintained the office space and had access to a company email account. But Fuentes maintained “I have no financial interest in LFC, nor do I receive any compensation from LFC.”
     Fuentes reiterated that claim in an interview with The Watchdog.
     “I’ve never been on their payroll,” Fuentes told us. “I have no fiduciary interest in LFC.”
     As for his Statements of Economic Interest, no disclosure was made of his relationship with LFC because no money was changing hands, he said. And the title of senior vice president was merely a courtesy title given by the owners of LFC, who are lifelong friends.
     The California Political Reform Act says that public officials who hold a title with a for-profit company are required to disclose the relationship on their Form 700 Statement of Economic Interest.
     Section 18703.1 of the Regulations of the Fair Political Practices Commission states that “a public official has an economic interest in a business entity if … The public official is a director, officer, partner, trustee, employee, or holds any position of management in the business entity.” A pamphlet published by the state explaining how to fill out an economic disclosure form states that officials are required to “(d)isclose the job title or business position, if any, that you held with the business entity, even if you did not receive income during the reporting period.”
     In other words, if you have a title with a company you have, by definition, a business interest in that company and are required to disclose it, said Roman Porter, executive director of the California Fair Political Practices Commission, the state’s political watchdog.
     Porter said disclosing such relationships are important, even if no money changes hands, because it “makes the official and the public aware of any potential conflicts of interest.”
     Porter, speaking generally about the law, said failing to disclose a business interest carries the same penalty as any violation of the Political Reform Act: a fine of up to $5,000. He noted, however, that determining whether a violation occurred requires some investigation. Sometimes the specifics of a case may mean there was no violation.
     The law firm hired by the county to investigate Williams and his agency is expected to make a report of its findings to the county CEO in mid-January.
     It is unclear how much of that report will be made public.

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