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PASADENA WEEKLY
May 01, 2005

by Joe Piasecki

Payback Time

Pasadena officials could face misdemeanor convictions and heavy fines for alleged 'pay-to-play' under Supreme Court-backed anti-corruption initiative
Pasadena City Councilman Chris Holden and Board of Education member Esteban "Steve" Lizardo have a price on their heads.

Each is in violation of Measure B, an anti-corruption initiative that makes it a crime for Pasadena public officials to accept campaign contributions from those whom their votes have benefited - and offers cash rewards to citizens who prosecute them.

Though the city has repeatedly challenged the measure as an unconstitutional restriction of political speech, the California Supreme Court on April 27 upheld the 2001 voter-approved ballot initiative by denying the city's petition for review.

"Pasadena has no other legal options. They have to enforce Measure B," said consumer advocate Carmen Balber, a spokeswoman for initiative authors the Oaks Project, which operates under the Ralph Nader-backed Foundation for Taxpayer and Consumer Rights.

More than $1,000 in reward money awaits any citizen who successfully sues a city leader over alleged violations of the measure, violations which currently total thousands of dollars in gifts from some of the area's wealthiest men to city officials who have supported their business causes.

Under Measure B, offenders can be fined up to five times the amount of their violation and, in particularly flagrant or repeat offenses, can be convicted of a misdemeanor or barred from public office.

Holden's numerous alleged violations of at least $2,100 in campaign gifts came less than a year after he cast deciding votes on the fate of the Raymond Theatre and changed city development rules to accommodate a massive downtown development for one of the world's richest men.

"Holden should come forth quickly with information in his defense, or otherwise we have to assume its pay-to-play," said San Gabriel Valley open government activist Rich McKee.

"The Oaks initiative is a response to this kind of thing - people getting wealthy just serving in office," said McKee, a Pasadena City College chemistry professor who co-founded the California First Amendment Coalition.

"It's this kind of thing that gives public agencies a black eye," he said.

Now, thanks to the Supreme Court, anyone who would sue Holden over Measure B violations would stand to recover attorneys' fees and profit up to 10 percent of the fines assessed against him, which could be as high as $10,500.

Lizardo's alleged violations involve a $250 gift from Measure Y bond contractor Pacifica Services, a business that Lizardo supported in April 2003 to receive a $3.7 million contract, and $250 from Pacifica Executive Michael Camacho, which is headed by Pacifica CEO Ernest Camacho.

If successfully prosecuted, Lizardo would be fined up to $2,500, with $250 going to whoever filed the suit.

"I have never and will not accept contributions for influencing my vote," said Lizardo, who told the Weekly that he did not know, despite this newspaper's March coverage of the violations, if the law, which according to its text "includes any elected or appointed public official acting in an official capacity," applied to school board members.

"If any contributions I received in campaigns fall under the purview of this measure, I will comply with the intent and spirit of the law. I voted for the measure when it came up [on the ballot in 2001]," said Lizardo, who would not specify if he would be returning the contributions this week.

Campaign records show Holden accepted $1,000 on Dec. 14 toward his unopposed 2005 re-election bid from MS Properties, a Pasadena-based real estate company owned by billionaire and Wesco Financial Corp. CEO Charles Munger. The contribution came less than a year after Holden offered his unswerving public support and council vote for a controversial MS Properties / Munger-owned construction project.

Named one of the world's 400 richest men this year by Forbes magazine, the 80-year-old Munger convinced Pasadena City Council members to change city building rules to allow the construction of two massive condominium projects near City Hall in downtown Pasadena.

During hearings on these projects, known as Montana I and II, Holden moved and voted to defeat further review of the structures before casting a deciding favorable vote for its 5-3 approval.

Holden, son of former LA City Councilman Nate Holden, maintains a policy of not speaking to the Weekly since being angered over a 1998 investigation into inappropriate personal spending of public funds by the Burbank Airport Commission, of which he was president at the time.

But that's not all.

Also according to campaign finance records, Holden also received $100 from Hahn & Hahn attorney R. Scott Jenkins, who represented Munger and his Montana projects before the council.

Just two days after receiving the Jenkins and MS contributions, Holden took $500 from Buchanan-Symonds, listed owners of the embattled Raymond Theatre, and another $500 from the Gene Buchanan-headed AJB Enterprises.

In May 2004, Holden moved that the city adopt a concept design review for converting the historic theater into luxury apartments, and then cast the deciding vote for its approval.

"That's damn ridiculous," said Buchanan, who was not familiar with provisions of the measure, and now feels it violates his rights to back political candidates.

"I give money to all of them. Now nobody can vote?" he asked before it was explained only donations made after a vote are subject to the measure.

"That's no favor to me," he said of the Raymond Theatre vote. "He's just doing his job as a council person. He voted what was code. I wasn't doing anything that wasn't according to code. ...That means anybody who does any business in the city, the council can't take anything from him?"

Incidentally, Holden contributor Jenkins also represented Buchanan before the City Council.

Calls to Pacifica Services, MS Properties and Jenkins were not returned by press time.

Measure B was approved by more than 60 percent of Pasadena voters in March 2001. A similar measure, Prop LL, was approved in 2000 by Santa Monica voters.

After the 2001 election, Pasadena city officials tried to scrub the Measure B by refusing to report election results to the state.

In May 2001, Santa Monica City Attorney Marsha Moutrie sued City Clerk Maria Stewart who, as ridiculous as it sounds, refused to implement Prop LL on Moutrie's advice.

Ironically, Stewart served as Pasadena City Clerk before moving on to Santa Monica.

Santa Monica's legal challenge of the law would eventually become combined with Pasadena's.

Pasadena good-government proponent Rene Amy and the Foundation for Taxpayer and Consumer Rights sued the city to place the law on the books, to which the city responded in April 2002 by filing a countersuit to force a ruling on Measure B's constitutionality.

A few months later, Superior Court Judge J. Michael Byrne forced the city to adopt the law, which was later declared unconstitutional by the court.

In February of this year, the state's Second District Court of Appeals reversed that constitutionality ruling.

In all, Pasadena's failed legal challenge has cost the city well over $150,000, according to published reports.

The lawsuit was handled by T. Peter Pierce of the firm Richards, Watson & Gershon - the same firm from which current City Attorney Michele Beal-Bagneris was hired. Beal-Bagneris did not return calls regarding question on how much money the city has spent fighting Measure B.

Many Pasadena City Council members have said they fear implementation of the initiative would discourage public participation in government, and have expressed some confusion about what actually amounts to a violation.

Proponents of the measure argue the rules are pretty straightforward, and that the Measure would not prohibit city government from carrying out its duties.

For example, the Pasadena Firefighters PAC has given $1,000 each or more to Mayor Bill Bogaard and Council members Paul Little, Victor Gordo, Steve Madison and Joyce Streator after each has voted on firefighter raises.

This, however, is not a violation, said Balber, because city officials are "required to go through those sorts of situations with unions. Contract negotiations are not included in the definition of a public benefit."

Though allegedly having violated Measure B twice, Lizardo remains nonetheless a proponent of the law, which no other city officials have vocally supported.

"I think that our elected officials' motives should not be subject to question. If some contributions call those into question, they should be returned so that there is no question," he said. "Even without this measure we must be aboveboard at all times."


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