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Through spokeswoman Diane Gaynor, Rancho Mission Viejo officials—including Moiso—declined to be interviewed about the transaction and the specific reason they decided to sell. But Gates says he thinks the Ranch saw a chance to cement its historical ties with San Juan Capistrano.
Others think the motives were less noble. “I don’t think there’s any question that the principal beneficiary is Rancho Mission Viejo,” Jim Reardon says. “Follow the money: $27.5 million of public funds is going to end up in the hands of the Ranch.”
Gates says that despite his close relationship with Rancho Mission Viejo, he and the other open-space committee members worked to get the best deal from the Ranch for San Juan Capistrano—not the other way around. “We’ve been friends, very strong friends—I’d be very clear about that—for many, many, many years,” Gates says of Moiso. “Friendship may get you in the door to get the conversation started. But from that point on, it’s a business deal.”
For now, most city leaders appear to be taking him at his word. State law requires elected officials, staffers and appointees in decision-making positions to file conflict-of-interest forms detailing many of their financial holdings. But when the Open Space Committee was established in 2005, it was done with the understanding that the committee would only exist temporarily and its members wouldn’t have to disclose anything.
That fact has also led to criticism. If Gates were benefiting from the Ranch’s sale of the riding park—perhaps through holding a stake in seeing the Ranch have more cash—how would anyone know?
“All I can do is say, the City Council set it up this way, and as a volunteer, I came to the table based on that circumstance,” says Gates, who says he doesn’t have a business relationship with the Ranch. “I’ll just tell you straight out if they weren’t set up that way, I might not have stepped up and offered my help at all in this process. Why would I want to reveal everything I own in the world when I’m here volunteering my time to do a good job for the city of San Juan Capistrano?”
To hear open-space supporters tell it, Gates’ close ties to the Ranch have been an asset. “In business, I’ve negotiated deals where I’ve found a former executive of the company that we’re trying to do business with, and I get them to help me negotiate a deal because of the relationship they have,” Nielsen says. “Because they know the players, because there is a certain amount of trust that exists between that company and that former executive, it gives me a leg up in the negotiation.”
Reardon snorts at that argument.
“Governance of a public body is not the same as running a business,” he says. “I run a business; I hire people all the time with conflicts of interest, and I look for them as advantages. When you’re governing a town, we have laws in this state that are supposed to assure us there’s transparency in government.”
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It’s rare to see Gates sitting in the audience at a City Council meeting. Instead, he stands. Often wearing a windbreaker from Point Center Financial (the investment firm owned by the husband of state Assemblywoman Diane Harkey), he leans against the chamber’s back wall, taking quick glances at the door whenever someone enters or leaves.
The suspicion leveled at the former sheriff from some in the town is intense. A provision in the riding-park purchase agreement allows for the operation of one new stable on the property; at council meetings, Lefner and Reardon charged the provision was inserted for the benefit of Gates’ stables-operating sister-in-law, who will soon see the lease on her property expire. Protecting the land from development helps the property values around it; doesn’t the fact that Gates lives in a home nearly adjacent to the riding park, they ask, constitute a conflict of interest?
But the questions remain only questions. Accusations and needling queries to the council during public comments have been met with assertions that the critics don’t have the facts to back up their claims, as well as assurances that final-decision-making power rests with the council and not the members of the Open Space Committee.
After the approval of an earlier, just-as-controversial open-space deal in January—which gives the council the option to spend $10 million to acquire 116 acres around a planned, yet-to-be-approved retirement community—Lefner filed a public-records request with the Orange County Transportation Authority (OCTA). She received pages and pages of e-mails that showed Gates had set up meetings between OCTA staffers, San Juan Capistrano city employees and the developer of the proposed retirement community to hash out an agreement on how to improve a railroad crossing near the area in question. Overhauling the crossing would be an essential component of developing the land—and allowing the public to use its open areas—but Gates hadn’t been directed by the council to do any of the legwork.