Council warned about ‘appearances’ of conflict
City Councilman Herb Katz defended his actions this week after questions were raised concerning his loyalties to Santa Monica’s lucrative auto dealers.
Katz, an architect, for years has drafted remodels and expansions for the auto dealers. His wife manages the Mercedes dealership on Wilshire Boulevard.
Still, Katz denied a conflict of interest in voting on city actions that affect the dealerships, which last year generated $5.1 million in sales-tax revenue for City Hall from new car sales alone.
“We have no financial interests in any of the dealerships,” Katz said Thursday. “I am simply a hired gun, like an attorney would be.”
The dealerships, located mostly on Santa Monica Boulevard, are pushing for a set of zoning-law changes that would allow them, among other things, to use empty lots for employee parking and to store inventory. The changes are scheduled to go before the City Council in August.
Katz on Tuesday asked his fellow council members to consider speeding up that process, which he said would benefit dealers and nearby residents. The debate over how best to accommodate the car dealerships, which are hemmed in by residential neighborhoods, has been ongoing for years.
The council voted against Katz’s suggestion after learning it would pull city staffers off other projects and could delay a more comprehensive update to zoning codes by up to six months.
During the discussion, however, the possibility of a conflict was raised, and City Councilman Ken Genser asked for a legal assessment of the situation.
City Attorney Marsha Moutrie explained there are two types of conflicts of interest covered by law. The first is a statutory conflict, where an official has a relatively direct financial stake, she said, adding Katz would have no statutory conflict in pushing ahead the zoning changes.
The second type of conflict, called the common law of conflicts, covers any situation where an official has competing loyalties. Therefore, this is more difficult to gauge, Moutrie said. She said she had advised Katz about a possible appearance of conflict.
“As to the common law of conflicts, I am not situated to judge when your internal loyalties are divided,” she said. “You will have to judge that for yourselves.
“However, I routinely advise all of you when the questions come up not only about your own loyalties, which are not mine to know, but about appearances,” Moutrie added. “And I uniformly caution all of you, as I have done in this case, that you must guard against the problem of appearance of divided loyalties as well as the actuality.”
Nearly all of the members of the Santa Monica City Council have abstained from voting at one time or another because they felt their participation might constitute a conflict of interest.
Katz on Thursday defended his decision to remain on the dais.
“Nobody can stop me from making a living,” he said. “As an architect, I also do a lot of mixed use, which includes retail and condos and apartments. I do custom houses. I do house remodeling. I do work for other cities, although not the City of Santa Monica. I do industrial. I do institutional, meaning school work. I’ve done churches. Having said that, if I am in conflict then I shouldn’t be able to bring up or vote on anything that is constructed.”
Katz, who said between 8 percent and 10 percent of his earnings come from work he does for the dealerships, added he and his wife, Brenda, are very careful not to discuss matters privately if doing so could violate his duties as an elected leader.
“I’ll come home and say, ‘Your project’s doing very well, but I have a problem with blah blah,’” he said. But “not with the city (matters). Very careful with that.”
Katz has been in a similar situation before. His previous wife, Ilona, who passed away from cancer in 2000, served for many years on the local college and school boards.
Katz’s colleagues had differing takes on the councilman’s ties to Santa Monica auto dealers, but most said it was best left to Katz to make the final determination.
“It’s between him and the voters, and him and his own sense of whether he has integrity in the vote or not,” City Councilman Bobby Shriver said. “Obviously he’s concluded that he does, and I take him at his word.”
Added City Councilwoman Pam O’Connor: “We all have to be careful... and then we all are going to be judged by other people: The folks, the citizens, the people who work in Santa Monica. We make our individual decisions... I don’t think there’s anything blatantly illegal going on.”
City Councilmen Ken Genser and Richard Bloom, on the other hand, pointed to Moutrie’s warning about the perception of a conflict.
“I think that [Katz’s participation] had the appearance of conflict,” Bloom said.
Added Genser: “Each council member has to make a decision based on the facts. I did hear Marsha (Moutrie) say very clearly that if there’s an appearance, one should conflict out. I would now think that if one doesn’t... conflict out, I think that the council member should at least explain in some detail why they don’t think the conflict exists.”
City Councilman Bob Holbrook, on the other hand, defended Katz’s decision to press ahead with the city’s business.
“He’s not initiating legislation,” Holbrook said. “He’s trying to get staff to start moving on this stuff that’s been going on for years and years and years, and I’m worried about it too, frankly. When I talk to people in this town who own car dealerships, they’re so fed up they’re about to leave.”
Originally published in the Santa Monica Daily Press print edition on January 14, 2005. Read the original PDF.