Santa Monica City Hall (File photo)

Former City Manager Rod Gould has settled out of court with the Santa Monica Transparency Project over allegations his employment with a Marin based consulting firm violates the city’s anti-corruption laws.

While Gould did not admit fault, he agreed to resign his post-Santa Monica job, abide by the limitations of the Oaks Initiative and pay $20,000 to cover Plaintiff’s attorney fees.

“Basically gave us everything we wanted,” said attorney Bryce Gee who represented the plaintiffs alongside Fred Woocher, and Beverly Grossman Palmer of the law firm Strumwasser & Woocher, LLP.

The Oaks initiative is supposed to prevent public officials from reaping personal gains based on their time working for the City. The law prohibits public officials from receiving a personal or campaign advantage from a person or organization that benefited from a decision made while that official was in office. Those provisions are in place for two years following the official’s departure from their city position.

According to the complaint, Gould should be prohibited from working for the company because Management Partners was hired to provide several services to Santa Monica under Gould’s tenure. Gould retired in January of 2015 and moved to Marin County. In May, Management Partners, Inc. hired him.

In a letter sent to the City Council, Gould said he was never informed that his future employment options would be subject to the law.

“At no time before, during or after my five years of employment with the City of Santa Monica did I ever receive any advice from the City that my post-City employment could give rise to a violation of the Oaks Initiative,” he said. “Moreover, the City Attorney has consistently taken the position that the Oaks Initiative likely does not apply to City employees, including the City Manager and suffers from Constitutional and drafting infirmities.”

Gould said he was specifically told his part-time employment with Management Partners was not a legal violation by the City Attorney’s office and the civil suit came as a surprise.

“That lawsuit has put me in the middle of a dispute between the City and the Charter proponents over enforcement of the Oaks Initiative Charter Amendment,” he said. “Yet the City has refused to participate in the lawsuit or otherwise seek a judicial determination that its interpretation of the Oaks Initiative is correct and that the measure does not apply to employees. That puts employees like me, who relied on the City’s prior position, in an untenable position.

I do not have the resources to defend a lawsuit that carries with it the potential for significant penalties. Moreover, at this point in my life I do not believe it is appropriate for me to contest the Oaks Initiative since the dispute over the interpretation of this Charter provision is not mine. Consequently, I have entered into a settlement that involves my relinquishing a job that was meaningful and allowed me to use my skills to better local governments.”

Under the terms of the settlement he will resign from the company and agree to restrictions on his employment through January 31 of 2017.

“This is an important victory for Santa Monica,” said Mary Marlow, a Plaintiff and Chair of the Transparency Project. “It is about time that the law is enforced. Unfortunately, residents had to do the enforcing because the City Attorney has refused to do so. The City has much greater investigative powers and resources than we do. Now that we have shown Oaks is alive and well, we expect the City to do its job.”

The settlement is the first result of any kind stemming from an Oak’s complaint. The Transparency Project previously filed a complaint against Councilwoman Pam O’Connor over campaign contributions but the Santa Monica City Attorney, County District Attorney and State Attorney General’s office all declined to proceed with criminal prosecution of the charge.

The City Attorney’s office has stated it would be a conflict of interest to pursue complaints against individuals who are also its client. The City has also raised questions over the constitutionality of some Oak’s provisions.

While the District Attorney agreed there might be Constitutional concerns, both the DA and the Attorney General suggested the formation of a special prosecutor within the City Attorney’s office could allow the city to proceed with complaints on its own.

City Attorney Marsha Moutrie said establishing a special investigator within her office would be impractical due to the small size of her staff. Even if her office were to create such a position, Moutrie said residents would be unlikely to trust that anyone employed by her office could be completely objective when it came to prosecuting councilmembers or other officials.

Alternate enforcement ideas have been discussed in the past including formation of an independent ethics commission, hiring outside lawyers or forming a partnership with the City of Pasadena. Santa Monica and Pasadena are the only two cities to have adopted the Oaks rules and the two could agree to investigate each other’s complaints.

Marlow said the success of the civil suit shows the law can be enforced and should prompt the city to move forward with existing Oaks complaints.

“We hope the message to the city is you need to find a way to enforce Oaks or if you think it has a constitutional problem, bring it up and lets deal with it,” she said. “I think it’s unfortunate that private citizens had to bring a lawsuit in order to show the city that you can deal with these issues.”

In his letter, Gould said the City has a responsibility to reconcile the Oaks wording with the interpretation that has been presented to city employees. He said council should make clear who is covered by the rule, train staff on the implications of the rules prior when hired, clarify who is covered when contracts negotiated by others are approved by the city manager and adopt an enforcement mechanism that handles complaints administratively rather than through litigation.

Moutrie said Oaks clearly applies to elected officials but said she believes it is unclear as to the law’s application to city employees.

“I think the residents deserve to have that clarified,” she said.

Moutrie said she agreed with the need to establish an enforcement mechanism and said it would be up to the City Council to use its authority to refine the rules and create a system of enforcement.

Mary Marlow, Elizabeth Van Denburgh and Nancy Coleman filed the civil suit against Gould earlier this year. The three are members of the Santa Monica Transparency Project, an all-volunteer organization that describes itself as concerned about openness and accountability in city government.

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