Councilman Violates State Law by Abstaining on Developer Deal
By Alberto Garcia
A Chula Vista councilman currently under investigation for alleged campaign finance violations ran afoul of state law during a City Council on Tuesday by improperly abstaining from voting on a developer’s project amendments after the developer gave McCann a $10,000 contribution last December.
Councilman John McCann is already under two separate investigations for using a legal defense fund to raise $90,000 from developers to reimburse himself for legal fees he incurred in a failed defamation lawsuit he filed in 2014.
McCann collected 21 contributions ranging from $1,000 to $12,000, including a $10,000 from HomeFed Corporation, a landowner in Chula Vista that has been involved in large development projects in the City for decades.
La Prensa San Diego first reported on May 20, 2021, that McCann used his legal defense fund to cover legal expenses incurred in a lawsuit where he was the plaintiff, not the defendant. State and City laws restrict the use of legal defense funds to expenses incurred in defending against lawsuits and administrative or criminal prosecutions, but not for lawsuits filed by the candidate of office holder.
Dr. Peter Watry, a retired Economics professor, then filed a complaint under penalty of perjury asking the City to investigate McCann’s use of the legal defense fund to determine if he violated local campaign rules. Another resident, Maty Adato, filed a similar complaint with the California Fair Political Practices Commission (FPPC), the state agency that regulates and enforces state campaign laws.
While McCann has not made any public statements since the first La Prensa San Diego article or after the two complaints were filed, he has told people privately that he doesn’t believe he did anything wrong in taking $90,000 from developers and also voting on their projects.
During last night’s Council meeting, however, McCann announced that he would abstain on an item on the agenda involving the rezoning of three parcels owned by HomeFed. HomeFed gave McCann a $10,000 contribution for his legal defense fund on December 29, 2020.
“Yes, I will be abstaining on Items 5.3 and 5.4,” McCann said before the Council voted on the items. Item 5.3 was the HomeFed project rezoning and Item 5.4 was an amendment to the City’s campaign fundraising rules for the upcoming Council races.
The project proposal under Item 5.3 included rezoning three parcels owned by HomeFed; an industrial parcel being rezoned to residential, an office parcel rezoned to residential, and increasing the density zoning of the project to included more overall housing units. The project is near the intersection of Heritage Road and Main Street in Eastern Chula Vista.
McCann’s use of a recusal from a vote should only be used when an elected official has a financial conflict-of-interest in an item before a governmental body. State regulations specifically outline the types of conflicts that could create a reason to abstain, and the regulations outline the public disclosure an elected official must make when deciding not to vote.
“The public official must publicly identify each type of financial interest held by the official that is involved in the decision and gives rise to the disqualifying conflict of interest (i.e. investment, business position, interest in real property, personal financial effect, or the receipt or promise of income or gifts),” the state’s regulations state.
Additionally, the elected official must provide details for the conflict-of-interest, including the “name of the business entity in which each investment is held“, “a general description of the business activity in which the business entity is engaged as well as the name of the business entity“, “the address or another indication of the location of the property“, if “income or gifts, the identification of the source“, if “personal financial effect, the identification of the expense, liability, asset or income affected,” the regulations require.
McCann did not provide any details of the type of financial conflict of interest he believes he has in voting on the HomeFed’s project, or any details on his involvement with the company.
Last year, when other projects owned by HomeFed came before the City Council, McCann did vote to approve those items.
During the August 4, 2020, and October 6, 2020, City Council meetings, items related to HomeFed development projects were on the agendas for final approval. McCann voted to support all of the HomeFed items without abstaining.
Those votes took place before HomeFed gave McCann the $10,000 contribution toward his legal defense fund in December. The contribution may now be the financial conflict-of-interest McCann believes required him to abstain on the latest HomeFed project vote.
No City official cautioned McCann on the missing details of his abstention last night, even though the City Council has dealt with similar issues in the past few years.
Last year, Councilwoman Jill Galvez sought to abstain from voting on an agreement between the City of Chula Vista and Bank of America where the City was planning on purchasing two fire trucks through a lease financed by the bank. Galvez believed the fact that she and her husband owned shares in Bank of America and the fact that Galvez’ husband worked for Merrill Lynch, which is owned by the bank, constituted a remote financial interest and therefore created a conflict for her.
Galvez was advised by City Attorney Glen Googins that she could still vote on the lease because the financial interest would not directly benefit her or her husband, but the City still sought an opinion from the California Fair Political Practices Commission (FPPC) to be sure.
On June 25, 2020, the FPPC responded with an opinion that Galvez did indeed have a “remote” financial interest and that she was “required to recuse herself from the decision.”
“Councilmember Galvez is prohibited from taking part in a contracting decision between the City and Bank of America, as she has an interest in Bank of America as a business entity and a source of income, and the decision would have a reasonably foreseeable, material financial effect on Bank of America based on its express involvement in the contract,” the FPPC opinion read. “Under Sections 1090 and 1091, Councilmember’s financial interest in the contract is considered “remote” and she is similarly required to recuse herself from the decision, but the City may still contract with Bank of America.”
The City Council eventually approved the lease agreement on July 28, 2020, and Galvez abstained from voting on the items related to Bank of America.
During the Council’s discussions before the vote, City Attorney Glen Googins interrupted to clarify that Galvez was abstaining due to financial conflicts of interest due to her “husband’s employment with an affiliate of the lease/purchase financing entity.” The remaining Councilmembers voted to approve the lease deal.
McCann’s abstention last night without proper disclosure of the details of his financial conflict-of-interest could be investigated by the FPPC which has jurisdiction over such violations.