In a final report issued June 21, 2016, the Alameda County Grand Jury found that an Oakland City Council member used her position and office to advocate for private gain, and not the good of the City, in interfering with the planning process for a small housing development next door to her home.  The report highlights the importance of state and local conflict of interest requirements, training, and compliance, as well as the right of developers to be treated fairly in any project approval process.

The civil grand jury report comes in response to a citizen complaint citing a news report of a council member using City staff for her personal benefit to oppose a development project.  While the report does not identify the council member by name, the facts in the report indicate that the project is next door to Oakland City Council President Lynette Gibson McElhaney.

According to the report, the owner of a vacant lot in west Oakland proposed to build a five-unit townhouse project, as permitted by the applicable zoning regulations.  Such small projects are approved at a staff level by the zoning manager.  After working with City staff to prepare a design in compliance with City requirements, including compatibility with neighboring properties, and implementing staff recommendations, project approval appeared imminent.

Nevertheless, a next door neighbor contacted the owner and stated that his wife was an Oakland council member and further stated that he and his wife would be working to stop the project if the design was not changed to their liking.  Soon thereafter, the council member contacted the City’s planning director—a department head three levels above the staff person handling the project—to voice objections to the townhouse project.

The planning director then contacted the zoning manager and the assigned case planner, notifying them that she would be conducting her own design review of the project.  After visiting the site and conducting an independent review, the planning director suggested changes to the design plan.  The director also suggested that the property owner present the revised plans to the council member and interested neighbors so that the final design could be completed and approved by the City.  While the assigned case planner remained involved, the planning director became the City’s point of contact for the project.

The property owner then made the revisions the planning director requested and resubmitted the plans.  Staff approved the revised plans and two weeks later an appeal was filed on behalf of the council member’s spouse.

Five months later, the Planning Commission considered the appeal, and instead of ruling on the appeal directed the property owner and appellants to try to find a mutually acceptable solution.  After the owner completed additional revisions to the project, the planning director emailed the council member asking if the revisions were acceptable.  The council member responded that the revisions were not acceptable and copied her staff in the email communication.  The council member refused to meet with the owner’s architect unless the project was significantly downsized and other concerns were addressed.

Four months after the first Planning Commission appeal hearing, the Commission took final action to approve the owner’s new design, which reduced the number of units from five to four and addressed privacy issues by facing some of the units away from the council member’s home.  These units previously had downtown views, but were now facing another neighbor’s home and a freeway sound wall.  Despite these changes, the council member remained unsatisfied with the project.

Conflicts of interest for personal gain

The Grand Jury stated that the council member’s interference turned the department head into an intermediary—or even an advocate—for the elected official, giving the appearance that the council member was receiving special treatment.  According to the Grand Jury report, when the council member spoke to the Planning Commission at its second meeting regarding the appeal, she did not identify herself as speaking as a private citizen; rather, the council member spoke broadly and criticized City policy.  The report also indicates that the council member interrupted other speakers several times during the meeting and rose after public comment had closed, summarizing her position and stating she would seek the City Attorney’s advice, which gave the appearance that she had special access to City resources.  The Grand Jury found that the council member had a material financial interest in the City’s decision based on the proximity of the townhouse project to her residence and the likelihood that her privacy would be adversely impacted.  The Grand Jury also found that the council member should have taken steps to ensure that she did not use her official position to influence the decision regarding the townhouse project and that she should not have directly contacted City staff behind the scenes to influence a government decision.

Misuse of City resources or position for private gain

The Grand Jury report shows that the council member’s chief of staff researched and prepared a letter using City resources for the council member stating her opposition to the townhouse project.  The Grand Jury also learned that the council member’s chief of staff prepared talking points or notes using City time and resources for the council member’s opposition of the project.  He also had multiple conversations with City staff, including the planning director, about the council member’s opposition to the project.  The Grand Jury found that this was a direct misuse of City resources for the council member’s private benefit.

Non-interference in administrative affairs

The Grand Jury identified emails to City staff documenting the council member’s objections to the project, including an email from the council member to the planning director stating, “This process raises a series of serious concerns for your department including how well you track and enforce the city’s procedures.”  The Grand Jury concluded that these communications gave the appearance that the council member was speaking not as a private citizen but rather inappropriately wielding her power as a council member to influence an administrative decision.   Except for the purpose of inquiry, the City charter prohibits the council and any individual council member from giving orders to any subordinate of the City under the jurisdiction of the City Administrator or such other officers, either publicly or privately.  The charter also prohibits the council and council members from attempting to coerce or influence the City Administrator or such other officers with respect to any administrative action.

Oakland administrative code for employee conduct

The Grand Jury report indicated that the planning director may have informed the City Administrator about the project itself, but there was no indication that the director reported the council member’s conflict of interest or inappropriate interference with staff.  Instead, the planning director continued to advocate for a conclusion that satisfied the council member.  The Grand Jury found that this advocacy gave the appearance that backroom conversations were taking place outside of the property owner’s participation, placing him at a disadvantage.

Grand Jury recommendations

The Grand Jury report made several critical recommendations:

• The City’s Public Ethics Commission must conduct its own investigation of facts surrounding the townhouse project and take appropriate enforcement actions.
• The City’s Public Ethics Commission must reinforce its ethics training for elected officials and City employees regarding conflicts of interest, misuse of city resources or position, and professional conduct, including reporting council interference.
• The City Council must follow its Code of Ethics, including its mandate to “be willing to censure any member who willfully violates the rules of conduct contained in the Code of Ethics.”

The Grand Jury report is a reminder of the importance of fairness, openness, honesty, and integrity in local government.  The Grand Jury’s concern, of course, is that political interference from elected officials can erode public confidence and trust in government, thus damaging its effectiveness.  In addition, as noted above, developers have a right to be treated fairly in any project approval process.  See, e.g. Woody’s Group v. City of Newport Beach, 233 Cal.App.4th 1012 (2015).

Even if an agency official or staff member is uninclined to read and consider any of the myriad resources on ethics and transparency, the “front page test” (i.e., never do anything you would not want to see reported on the front page of the newspaper) provides a rule of thumb that at least provides an opportunity for one to pause and ask whether the action to be taken is one that could withstand publicity and scrutiny.  As Warren Buffett once aptly noted, “It takes 20 years to build a reputation and five minutes to ruin it.”