A Questionable Transaction

If there's a financial conflict of interestSanta Ana Councilwoman Claudia Alvarez has been able to avoid, then the public sure as hell doesn't know about it. Last spring, Alvarez, who by day is an Orange County deputy district attorney, provoked a state attorney general's investigation after vowing to vote on a proposed 37-story building despite receiving $3,200 from the project's developer (see “The War on One Broadway Plaza,” April 16, 2004). Now, another major Santa Ana construction proposal is about to come before the City Council, and once again, its backers previously ponied up thousands of dollars for Alvarez.

The development: City Place West, a mixed-use project slated for a weed-choked, 3.12-acre lot across from MainPlace Mall. The parcel's owners, William Hammerstein of Beverly Hills-based Hammerstein Investments and Robert Bisno, president of TransAction Financial Corp. of Berkeley, envision an urban village with a 2,000-square-foot movie theater, shops, restaurants, 74 live/work units and 168 town homes. Santa Ana's Planning Commission approved the project on Dec. 13; it now heads to the City Council for a yet-to-be scheduled vote.

The two-year effort behind City Place West didn't come cheap for Bisno and Hammerstein. When Alvarez unsuccessfully ran for the 69th Assembly District Democratic primary last spring, the developers each gave her $3,200, the maximum an individual can give candidates for the state legislature under California law. Others associated with TransAction donated a total of $21,200 to Alvarez's campaign.

There's nothing wrong with giving a candidate money, of course, as long as there is no conflict of interest. But Bisno and Barbara M. Fuchs, wife of TransAction CPA Frederick Fuchs, threw their cash into the Alvarez pot on March 30, 2004. If Alvarez votes on City Place West before March 30, she'd seemingly violate Santa Ana's campaign-finance law—seemingly because the law was so ambiguously worded, according to the attorney general's office, the state could not make conflict-of-interest allegations against the councilwoman stick.

The ordinance prohibits council members from voting on matters in which “it is reasonably foreseeable that the decision will have a material financial effect
. . . on a recent major campaign contributor” who donated $250 or more within the past year. But, according to the AG, it's unclear whether the law as written applies to contributions collected for non-city campaigns while city business is before the candidate.

While Alvarez may use this apparent loophole to flout campaign-finance law, it's obvious her campaign contributors are keenly aware of the law's limits. Both Bisno and Hammerstein forked over $249 to Alvarez's successful council re-election race last fall, just $1 less than the amount that would put her in conflict-of-interest limbo.

This regulation is the same bugaboo the ethics-challenged councilwoman faced last year. As the Weeklypreviously reported, Alvarez accepted $3,200 from developer Mike Harrah during her failed Assembly race and was to vote on his One Broadway Plaza proposal until the attorney general's office stepped in. (Full disclosure: Harrah is the Weekly's landlord.) By the time the AG concluded its investigation, declining to discipline Alvarez due to the confusion inherent in Santa Ana's campaign-finance law, the City Council had delayed approving the project for months so that the statute of limitation on Harrah's donation would expire.

Alvarez did not return a request for an interview, but one prominent Santa Ana activist expects Alvarez to vote on City Place West regardless of the city's ordinance because of the law's unclear wording. “What is really bothersome is Claudia will cling to the fact she's not violating the law,” said Joann Ramírez, a member of the Santa Ana civic group Broadway Bulldogs and a frequent Alvarez critic. “But we haven't addressed ethics. Santa Ana citizens passed the campaign-finance law with the intention that City Council candidates wouldn't be influenced by money. Ethics is predicated on adhering to the intent and the morality of the law, though, and Claudia has no regard for that. What makes it worse, she's an attorney.”


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