Santa Monica Observer - Community, Diversity, Sustainability and other Overused Words

City Councilman Accused of Taking $ From Developer After Approving Project

Oaks Complaints Filed Today Against Councilmember Terry O'Day over Village Trailer Park


November 5, 2016

City of Santa Monica

Terry O'Day is in the lower right in this 2012 official photo.

The Santa Monica Transparency Project today filed with the City 2 Complaints alleging violations of Santa Monica's anti-corruption law, Oaks, by Councilmember Terry O'Day. Mr. O'Day is seeking re-election and these violations have just come to light.

Oaks prohibits public officials, including councilmembers, from, among other things, receiving campaign contributions or a job from contractors and developers after the official voted to approve a public benefit for them.

It is aimed at avoiding even the appearance that public officials are looking to their own future benefit when doing the people's business.

The alleged violations were particularly egregious, including Councilmember O'Day receiving a campaign contribution from Marc Luzatto the principal of Village Trailer Park after Mr. O'Day had approved a development agreement in Mr. Luzatto's favor. The vote in favor was 4-3. The Village Trailer Park project was highly controversial as it replaced low cost housing with largely high rent units. After getting approval for the project, Mr. Luzatto flipped it profiting by many millions of dollars.

"It is particularly troubling that so soon after the Council discussed Oaks at such length, publicly affirming its importance, Councilmember O'Day should so cavalierly disregard his legal obligations under the law as the Transparency Project alleges. As a senior public official he should be especially vigilant in abiding by the law that directly pertains to him as a public official. We expect the City to enforce Oaks," said Mary Marlow, Chair of the Transparency Project.

Transparency Project Complaints Against Councilmember Terry O’Day Alleging Violations of Oaks Initiative

The Santa Monica Transparency Project is filing these Complaints with Terry White, Chief Deputy City Attorney, Criminal Division, alleging violations of Santa Monica law as embodied in the Oaks Initiative by Councilmember Terry O’Day who is seeking re-election in November 2016 relating to campaign contributions he has received in his campaign. Taxpayer Protection Amendment, Art. XXII of the City Charter.

We are filing these Complaints with you as you have been designated by the City Council to enforce Oaks—including civilly--after many years of non-enforcement. This should be a priority as Oaks is the backbone Santa Monica anti-corruption law. As John Hueston recently found in his report to the City Council:

“The Oaks Initiative contains provisions that, if enforced, fulfill important anti- corruption goals.” Emphasis added.

Public confidence in the impartial administration of our laws is implicated as our Complaints allege illegal contributions to one of the City’s most senior government officials.

Under Oaks, any illegal campaign contribution must be returned within 10 days of receipt. As this does not appear to have been done with these contributions, the monies must be turned over to the City’s General Fund, among other remedies that may be sought. Section 2206

Under Oaks, Councilmember O’Day has a legal obligation to exercise due diligence to review his contributions when received so that he returns them within 10 days.

“City public officials shall practice due diligence to ascertain whether or not a benefit defined under Section 2202(a) has been conferred, and to monitor personal or campaign advantages enumerated under Section 2202(c) so that any such qualifying advantage received is returned forthwith, and no later than ten days after its receipt.” 2204(a), Emphasis added

Councilmember O’Day signed his Campaign Disclosure Statements under penalty of perjury, certifying that he has reviewed the statement:

“I have used all reasonable diligence in preparing and reviewing this statement and to the best of my knowledge the information contained herein and in the attached schedules is true and complete. I certify under penalty of perjury under the laws of the State of California that the foregoing is true and correct.”

We attach a chart listing the Complaints we allege. Each of these acts allege violations of Oaks as it presently stands and also as it would be amended by Measure SM on the November ballot.

We also attach the relevant minutes showing Mr. O’Day’s votes, his Campaign Disclosure Statements showing the contributions and the Oaks Log maintained by the City Clerk listing the names of those who are owners, directors or officers of the entity for which Councilmember O’Day approved substantial financial benefits.

Complaint 1: Marc Luzatto Campaign Contribution to Councilmember O’Day

On April 9, 2013 Councilmember Terry O’Day voted to approve a contract in favor of the Village Trailer Park redevelopment project. On September 26, 2016, within the same term of office, Mr. O’Day allegedly illegally accepted and did not return within 10 days a campaign contribution from Marc Luzatto, a principal of Village Trailer Park, in violation of Oaks. This contribution was reported to the City Clerk by Mr. O’Day on October 22, 2016.

Complaint 2: Dan Emmett Campaign Contribution to Councilmember O’Day

On September 10, 2013 Councilmember Terry O’Day voted to approve a contract in favor of Douglas Emmett. On August 22, 2016, within the same term of his office, Mr. O’Day allegedly illegally accepted and did not return within 10 days a campaign contribution from Dan Emmett, the Chairman of Douglas Emmett, in violation of Oaks. This contribution was reported to the City Clerk by Mr. O’Day on September 28, 2016.

Marc Luzatto and Village Trailer Park in particular were matters of great public interest, including at Council meetings and in numerous articles in the press. Not only did Mr. O’Day have a legal obligation to use due diligence, it is not credible that he would not know that he had voted to approve Mr. Luzatto’s extremely lucrative and highly controversial project.

Both Mr. Luzatto’s and Mr. Emmett’s names appear first on the Oaks disclosure list in the Oaks Log for both the project and the contract that were the subject of Mr. O’Day’s votes in Complaints 1 and 2. A simple search of the Oaks Log kept by the City Clerk and available on the City’s website discloses this.

These violations come shortly after the Council hired a special counsel to, in part, review Oaks and after the Council engaged in long discussions of Oaks in recent Council meetings culminating with putting Measure SM on the ballot. While lack of knowledge of the law is no defense, it cannot be doubted that through this process Councilmember O’Day became acutely aware of his obligations under Oaks.

Given all of this, for Councilmember O’Day to merely pay these contributions over to the General Fund is not enough. Violations of Santa Monica’s important anti-corruption law must be enforced even against its most senior government officials.

Please let us know if you need any further information or have any questions. Respectfully submitted,

/S/ Mary Marlow


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