Guide Told to Cut Garofalo Ties

The Huntington Beach Conference and Visitors Bureau has been ordered to terminate its contract with Mayor Dave Garofalo, who is being investigated by county and state officials for possible conflict-of-interest violations.

City Atty. Gail Hutton put the visitors bureau on warning that if it does not immediately rescind its contract with the mayor, it may lose $270,000 in city funding--the organization’s entire budget.

Garofalo has published the agency’s Visitors Guide since 1993 and, under the terms of the contract, gets all profits from the guide’s advertising revenue. He has voted on the city’s funding contract for the bureau four out of the six years he has served on the City Council.

Hutton initially launched an investigation into Garofalo’s voting history but, saying her efforts had become redundant, handed the case off to the Orange County district attorney’s office and the state’s Fair Political Practices Commission. Hutton was not available Tuesday to explain her resumed interest in the case or her edict to the visitors bureau.

Garofalo was awarded a three-year contract to publish the Visitors Guide in December 1993. But, Hutton noted in her Aug. 1 memo, he sold his publishing rights in January 1998 to longtime friend Ed Laird, president of Huntington Beach-based Coatings Resource Corp., for $220,000. Laird also agreed to pay Garofalo an annual consulting fee to assist in the “mechanical and technical aspects of publishing,” according to the memo.

“We conclude that the publishing contract between the bureau and [Coatings Resource Corp.] is potentially invalid and that the bureau must take action to terminate that contract and immediately put it out to bid,” Hutton wrote.

If the contract isn’t terminated, the bureau could lose $270,000 in funding from the city, Hutton warned.

Laird said the contract with the visitors bureau is now held by a company his son owns and that he would take whatever steps are necessary to protect his business interest if the contract is rescinded.

“I think the city attorney is confused,” Laird said. “On one hand, she said she’s going to turn the investigation over to the FPPC and the district attorney, and yet she’s making a determination like this that could affect a lot of people. . . .”

Diane Baker, the bureau’s director, was not available for comment Tuesday. Garofalo, likewise, could not be reached for comment.

Hutton explained in her memo that her investigation found Garofalo has continued to act as publisher of the Local News and the Visitors Guide “in all respects” and that his “activities included the sale of advertising.”

She said state conflict-of-interest laws prohibit “self-dealing when making contracts,” and that “a government officer may not make or participate in the making of a government contract if he or she is financially interested.”

Hutton stopped short of saying outright that Garofalo was in violation of the code, citing among other things the ongoing investigation.

“It would be inappropriate to prejudge the results of that investigation,” Hutton said.

Still, the city attorney said she foresaw a “reasonable likelihood” a court would find that the city’s funding contract with the bureau violated conflict-of-interest laws.

David Treiman, a professor at Whittier Law School in Costa Mesa who specializes in local government and state conflict-of-interest laws, said the plain language of the law prohibits the City Council from making a contract in which any member has a financial interest.

Garofalo is being investigated by the district attorney’s office and the Fair Political Practices Commission for his votes involving advertisers in various publications, as well as the quick turn-around sale of a house. According to council records, Garofalo cast 87 votes in the last five years favoring guide advertisers.

In October 1998, the FPPC advised Garofalo to abstain from voting on “matters if the decision is substantially likely to have a financial effect on the advertiser” for a year after receiving money.

However, minutes from City Council meetings held between October 1998 and December 1998 show that Garofalo voted three more times on projects involving Visitors Guide advertisers.

City Councilman Dave Sullivan, a critic of the mayor, said he hoped the Conference & Visitors Bureau board of directors will act on Hutton’s advice.

The board’s next regular meeting is scheduled for Sept. 5.