Eye On Modesto

Thoughts and observations about Modesto and Stanislaus County

Archive for the month “October, 2011”

Attention Joe Muratore, No Conflict of Interest? That’s NOT Entirely True Is It

We understand how Bee reporter Ken Carlson has a difficult job getting reality past his editors and we truly sympathize. So we contacted the City Attorney Susan Acala Wood through City Clerk Stephanie Lopez to find out what really took place.

Here is the Ms. Wood’s response:

Dear Mr. Drake:
The City Clerk’s Office forwarded your request to me for response.
It’s unfortunate that the newspaper mis-reported the facts, because their botched article has obviously caused your concern.
The actual facts are that once the OIG auditors flagged the Tully Road transaction to City staff, a number of steps which included analyzing the transaction under three separate and applicable conflict of interest statutes: 1) HUD and NSP regulations; 2) The Political Reform Act; and 3) Government Code Section 1090.
In the first one, the City of Modesto found that Councilmember Muratore violated conflict of interest laws under the NSP program and HUD regulations when, as a principal of Benchmark, he participated in the sale and acquisition of the Tully Road property which was purchased by Trinity Ventures through the NSP program. Enforcement action was taken, which included the issuance of a violation notice and a demand for a return of the $62,000.00 commission that Benchmark received. As a result, Councilmember Muratore and Benchmark forfeited the commission (A number of enforcement actions were also taken against Trinity Ventures however Councilmember Muratore is not a principal of Trinity). This enforcement action was pursued in consultation with HUD officials in the regional office in San Francisco. Both HUD and the City await the final audit from OIG to determine if they will require us to take additional action.
In the second one, the FPPC found that Councilmember Muratore violated conflict of interest laws under the California Political Reform Act regarding his vote on two NSP related action items. They issued him a written warning, and set forth reasons why they were declining to assess a fine or penalty against him and considered their enforcement action closed.
Regarding the third, out of an abundance of caution, the Council asked my office to review the Tully Road transaction and determine whether the Councilmember’s involvement implicated Government Code Section 1090. We engaged the law firm of Meyers Nave, and Mr. Richard Rudnansky to assist in this analysis and review. The City paid approximately $2200.00 for this work. The analysis concluded there was no 1090 violation because the transaction was not one that was presented to the Council for action, nor did it require ratification by the Council, and also because the delegation to the CH&CDC, which was the body authorized to give final approve to the loans, occurred prior to Councilmember Muratore being elected to office (so he was not in a position to influence the delegation to the CH&CDC). Accordingly, no additional enforcement action was required under this statute.
That is the statement that the Mayor provided yesterday. If you would like a copy of the statement that was given, just let me or Ms. Lopez know.
I know this is more information than you actually requested. But since you always take care to research into the actual facts, I thought you might appreciate the information.
If I can answer additional questions, please feel free to contact me.
Susana Wood
City Attorney
Here is the official city news release:

Mayor Provides Update Regarding Councilmember Conflict of Interest Issue

Below is the formal statement from Modesto Mayor Jim Ridenour regarding the Councilmember Conflict of Interest issue related to the Neighborhood Stabilization Program (NSP):
I want to take this opportunity to provide an update to the public about the conclusion of the City’s review of the receipt of a real estate sales commission earned by Benchmark Realty, the company co-owned by Councilmember Muratore for the sale of a property that was purchased using NSP funds.
As soon as the City became aware of the Councilmember’s involvement, a number of actions were simultaneously initiated to address the matter:
• To begin with, staff conducted an immediate investigation to verify the facts and to determine the appropriate manner in which to proceed under NSP regulations. This included coordinating with HUD staff. As a result, the City took immediate corrective action to recover the commission
• I requested that the OIG conduct a full audit of the City’s NSP program. The OIG also determined that the involvement by the Councilmember would trigger a more comprehensive audit of the City’s NSP transactions. That review has been ongoing and is expected to conclude in the next 6-7 weeks.
• Benchmark principals were notified of the violation of NSP regulations and were ordered to return the commission to the city. Benchmark immediately responded and returned the funds.
• Councilmember Muratore self-initiated a report to FPPC for determination of whether he had violated conflict of interest laws under the California Political Reform Act. The FPPC responded that he had violated the Political Reform Act and he was given a written warning. They also determined that because Mr. Muratore promptly brought the matter to their attention they would close the case without fine or penalty.
• Finally, the City Council requested from its attorneys a formal review, analysis and opinion as to whether the transaction constituted an impermissible Conflict of interest violation under California Government Code section 1090. The analysis concluded there was no 1090 violation because the transaction was not one that was presented to the Council for action, and the delegation to the CH&CDC, which was the body delegated to approve the loans, occurred prior to Councilmember Muratore being elected to office.
I have personally overseen this process on behalf of the Council, and feel that the City has been diligent in its response to this incident. The City Manager has kept the OIG auditors fully informed of all responses to this matter, and has continued to request HUD’s assistance and review of every step of the enforcement action taken.
We will also continue to wait for the results of the OIG audit and respond to any additional actions they may require of the City.

We want to thank Ms. Woods and Ms. Lopez for their timely response to our queries.

MID Blinks and Valley Bio-Energy Profits

By Emerson Drake

On August 31, 2010 the MID Board voted to reject the alleged bio-mass project proposed by Stephen Endsley and Valley Bio-Energy (VBE.) Sitting in the audience we heard Mr. Endsley tell the Board they would be sorry and that he planned to sue them.

We were reassured by MID General Council the ratepayers had nothing to worry about and the suit would come to nothing. Yet little over fourteen months later MID announced they were going to settle with VBE for $1.2 Million dollars.

The Board was questioned by the public about the litigation cost incurred by MID. We were just informed by way of a Public Information Request the total cost for representing MID in this matter was $96,755.13.

Was MID misled by their legal advisor as to their culpability in this matter? If so why is he still representing the MID Board?

All this money terminate a bio-mass project that never should have been considered? Other companies considering a similar start-up have questioned the availability of the necessary bio-mass to support a 24/7 operation.

Mr. Endsley had requested permission from the San Joaquin Air District to use only 7% bio-mass and the rest was to be made up of garbage.

So the ratepayers are on the hook for a total of just short of $1.3 M for a misguided fiasco that was a boondoggle from the beginning.

Remember that every member of the MID Board was endorsed by the Modesto Bee Editorial Board which begs the question, what do they have against us?


By EyeOnModesto Staff

I would like to encourage everyone to support the “Occupy Wall Street” protestors. They are fighting for us, the middle and lower class Americans who live from paycheck to paycheck.

99% of this nations’ wealth is controlled by 1% of its citizens. Those very wealthy Americans and corporations can afford to make million dollar donations to political campaigns, expecting and receiving in return, continued tax breaks, while the rest of us pay a higher and higher percentage of our income in taxes.

Warren Buffett has publicly said that the super wealthy can and should pay more taxes. Following is a quote from an interview he did with the New York Times:

“Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

Doesn’t it seem unreasonable that someone who makes $50,000 a year pays a higher percentage of income tax than someone who makes millions? Mr. Buffett’s secretary actually paid a higher tax rate than he did.

Many of us struggle with minimum wage jobs that provide absolutely no benefits. No health insurance. No sick time. No vacation time. No retirement plan. It’s not that we are unskilled, there just aren’t any jobs available that pay a living wage and offer benefits. The idea that giving tax breaks to the very wealthy will create jobs has been proven wrong. President Bush gave those tax breaks to his wealthy friends and they did not create jobs.

And now there is a new problem for the unemployed. Many potential employers have taken the stance that if an applicant has been unemployed for six months or more, they are considered “unemployable”. If you have 30 years of experience, and the company you work for closes, do you believe you’ve lost the skills you developed over a lifetime in just six months? Regardless of what you may think of President Obama’s jobs bill, a portion of it stated that “an employer cannot disregard an applicant due to his/her current unemployment status”. Who needs a job more than an unemployed person?

Who needs tax breaks more, someone earning $20,000 or someone earning $250,000?

Our political leaders need to stop coddling the super wealthy. They need to listen to the Wall Street protestors. They need to listen to us.

Modesto’s Future vs the Mayoral Candidates

By Emerson Drake

After watching both the first and last mayoral candidate debates I was struck by the sameness of the questions and responses. At the first of the forums there were six candidates and only four the last time but unfortunately that was the major difference.

So what have we learned after four months and over $150,000 having been spent?

Armando Areola, while a nice man, likes running for public office and hasn’t a clue what the problems are or what he might do if elected.

Brad Hawn has accepted the largest single donation in Modesto campaign history.  Stephen Endsley, a greedy and misguided developer, with more money to spend than a tree has almonds,  jump started Hawn’s campaign with $14,000 and followed it up with even more. In for a penny, in for a pound I suppose.

But our larger concern is what the money is trying to buy. Endsley has financial ties to Councilman Joe Muratore that amount to between $100,000 and $1,000,000 dollars, according to Muratore’s financial disclosure forms.

Why is that a concern? Because Hawn continues to deny a financial relationship between himself and the solar company he was involved in with Endsley, Muratore, and Ryan Swehla.

If he’ll deny this connection, how many others will he deny in the future? Endsleys donations have obviously purchased Hawns’ ear and potentially his vote, considering the former ties.

After Muratore was caught making personal money from the NSP2 funds, all he had to do was return the money (he still sits on the council and votes for his friends) and considering his close relationship with Hawn we don’t feel the need to have a member of this evil cabal as Mayor.

Bill Zoslocki, a former President of the Building Industry Association of Modesto, has sued the county (they lost) over farmland mitigation rights. Mr. Zoslocki has been a long time home builder in Stanislaus County and takes prime farmland and plants driveways and homes, neither of which are very good to eat, nor worth very much right now.

Zoslocki has come right out and said he will refuse to follow any advisory vote of the citizens if he disagrees with it. His idea of city government by the people, would seem to be more of a monarchy than democracy. To his words, “I know better than the voters what is best for them.”

That is a very scary prospect.

Another concern is Mr. Zoslocki’s negative comments on the extension of the library tax. He would prefer a new tax to be spent on roads rather than an extension of the library tax. While our roads do need repair it shouldn’t be at the expense of our children. When questioned about this after the forum he stuck to his decision, while acknowledging 85% of the library’s budget comes from the tax and that the library would be in dire straights up to and including closing all but the main branch and curtailing its hours by more than 50%.  Many fore-closed and low-income families don’t have computer access for their children to work on school projects or do research.  Libraries provide this access. 

This suggests he and his supporters are more concerned about building roads for developers to exploit than the literacy rate in Modesto.

Many politicians and business people have said it’s difficult to bring new business to Modesto because we have an uneducated work force.  Reducing hours and closing library branches will contribute to the unpreparedness of the next generation work force.

Garrad Marsh, a small business owner and eight year councilman, has a more thought out viewpoint. He believes the decisions of the public should be honored by public servants in office.

He prefers building up rather than out, believes in in-fill, and has refuted Bill Zoslocki’s claims of not enough shovel ready land around Modesto.

While we would rather see someone from outside the local political movers and shakers run for Mayor, and we are not recommending anyone for political office, Garrad Marsh would probably cause the least damage.

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