By Matt Coker
By R. Scott Moxley
By Charles Lam
By Nick Schou
By Gustavo Arellano
By Gustavo Arellano
By Steve Lowery
By R. Scott Moxley
The German philosopher Hegel observed that all great persons and "facts" appear twice in history. Marx added, "The first time as tragedy, the second as farce."
The controversies surrounding Huntington Beach Mayor Dave Garofalo got more farcical last week, when the Weekly learned that his exclusive, no-bid contract to publish his city's annual tourism guide proceeded for the better part of seven years without any official oversight.
Terms of the original 1993 contract allowed Garofalo to sell advertising in the guide, so long as ad revenue was deposited in a checking account jointly held by him and bureau officials. After the guide hit the streets and Visitor's Bureau expenses were paid from the account, Garofalo was free to reap his reward: every dollar and cent remaining in the account.
Now Diane Baker, the Visitor's Bureau president, admits the joint checking account doesn't exist, making it impossible to determine how much money Garofalo made from a contract he voted repeatedly—as a council member and as mayor—to give himself.
Garofalo failed to return the Weekly's phone calls for this story. But he has said that he "took all the risk" in the tourism guide's production and that in some years, he made little or no profit on the deal. Other sources have estimated that Garofalo's profits from the guide have ranged between $10,000 and $65,000 per year.
However, at least one former employee familiar with Garofalo's publishing company says the mayor bragged that he made most of his income from his contract with the tourism bureau.
"He makes the majority of his money off the Visitor's Guide," said Charles Bouley II, who spent three years as Garofalo's graphic artist on that and other projects. "The guides are his profit centers. That's what he told me. Those are the things he said 'help pay the bills around here.'"
According to Bouley, Garofalo saw the guide as his No. 1 priority, more important even than The Local News, the biweekly newspaper Garofalo was also publishing. "He preached countless times that the paper barely pays for itself," said Bouley. "He'd say, 'You think that newspaper pays for itself?'"
Baker said the checking account "existed in the beginning" of the arrangement with Garofalo, but she could not recall when it closed. "It will start up again shortly," she insisted.
Failure to maintain the account raised new and serious questions for Garofalo's colleagues on the City Council. "When one of the key terms of the contract isn't in place, it's troubling and suspicious," said City Councilman Dave Sullivan.
Baker said the account disappeared because the bureau very early on began treating Garofalo's contract as a mere formality. "It became a trust that was built between us," said Baker. "I just said, 'We'd like you to continue for another year or two.' It was like an oral agreement, more or less."
As for why the bureau is reopening the joint checking account, Baker was very clear: "We have a new publisher with AQC."
AQC is Air Quality Consultants, a Huntington Beach-based consulting firm owned by Garofalo's political benefactor Ed Laird. Perhaps to distance himself from a separate scandal involving The Local News, Garofalo has insisted publicly that he sold the publishing business to Laird in early 1998.
Garofalo has become a kind of reverse King Midas—making everything he touches politically radioactive. Collateral damages now include city attorney Gail Hutton, who for years has allowed Garofalo to vote on matters in which he had an apparent personal interest. And the votes that Laird cast as a member of the planning commission could also be tainted by conflict of interest, depending on when and if he bought Garofalo's publishing business.
More recently, though, Hutton has taken a hard line with Garofalo. Her Aug. 1 memo—an eight-page summary of her department's investigation into the Visitor's Bureau contract —recommends that the bureau terminate Garofalo's publishing contract. Failing that, she wrote, the city should halt all bureau funding. In any case, the city contract funding the Visitor's Bureau includes the proviso that "No officer or employee of the CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code."
Baker refused to comment on Hutton's memo, except to say that the bureau's board of directors will decide what to do on Sept. 5. But she clearly has no illusions about the next Visitor's Guide. "The contract will definitely go out to bid next time," she said. "I have one letter in the file of a person who is interested in bidding. And another person called today."—Anthony Pignataro and Dave Wielenga