The ethics of the San Diego Ethics Commission: keeping secrets from "two-bit newspapers" about lobbyists who serve as its attorneys

“You have an excellent reputation in the community; you are an extremely careful person, and I don’t see why your answer should not be sufficient,” Commissioner and retired Judge William Howatt Jr. told Fulhorst.

The ethics of the Ethics Commission
By Dave Maass
San Diego City Beat
Oct 12, 2011

At a September meeting of the San Diego Ethics Commission, the agency’s executive director, Stacey Fulhorst, presented the mother of all catch-22s.

While inspecting lobbyist-activity records, CityBeat had learned that private attorneys retained by the Ethics Commission are also working as counsel for the Southeastern Economic Development Corporation (SEDC), a city redevelopment agency, and as lobbyists for private companies. The relationships seem to present a potential conflict of interest on multiple levels, since the commission both regulates lobbyists and enforces ethics in city government, including SEDC. Asked about this, Fulhorst said the law firm—Stutz, Artiano, Shinoff and Holtz—and the commission have put several firewalls in place.

However, since attorney-client confidentiality covers legal agreements, Fulhorst couldn’t offer proof of these safeguards without first asking the commission’s seven members to release the information.

“I would personally recommend that you do approve a waiver, a very limited waiver of just, literally, a handful of paragraphs, because I do think it’s important to demonstrate to the public that we recognize it would not be appropriate for us to receive legal services from the same law firm that was providing general counsel to SEDC on SEDC matters,” Fulhorst told commissioners on Sept. 23.

Paradoxically, Fulhorst couldn’t show the commissioners the relevant paragraphs because they’d then become public record. Nor could the commission turn to its legal counsel for advice, since the lawyers were the subject of the discussion.

The commission deliberated for 15 minutes on whether an agency that investigates conflicts of interests should be transparent regarding its own potential conflicts. Some members wondered why CityBeat wouldn’t just take Fulhorst’s word.

“You have an excellent reputation in the community; you are an extremely careful person, and I don’t see why your answer should not be sufficient,” Commissioner and retired Judge William Howatt Jr. told Fulhorst.

Some worried about setting a precedent.

“I just think we should be careful with granting such a waiver,” Commissioner Larry Westfall, an accountant, said. “Once you do it, we start to open the door for every little, two-bit newspaper in town to come here and make requests for information, too.”

Some recognized the public interest in releasing the document, but Commissioner and attorney John O’Neill alone saw that as overriding other concerns.

“I think it puts to rest any suspicion there is any impropriety here,” O’Neill said. “I don’t think it helps us to not give the document.”

The commission voted 5-1 (one member was absent) against releasing the information, rejecting Fulhorst’s offer to conduct more research on an issue that wouldn’t have come up a year ago.

With Proposition E in 2004, San Diego voters authorized the Ethics Commission to hire its own legal counsel instead of relying on the advice of the City Attorney’s office. Proponents argued it was problematic for the city attorney to represent both the commission and the city officials subject to commission investigations. They also noted that City Attorney staff are also subject to commission enforcement actions.

For the first five years, the commission employed a staff attorney, but when the lawyer departed last year, the agency decided to contract with an outside firm to allow more flexibility. The Stutz firm submitted a bid and, Fulhorst said, was selected because of the “unique expertise and knowledge” of Christina Cameron, a longtime City Hall staffer specializing in ethics and campaign reform who’d recently earned a law degree. Under the terms of the bid, Cameron would serve as a general counsel, working under the supervision of “associate general counsel” Prescilla Dugard and Leslie Devaney. All three were serving as counsel to SEDC and lobbyists, but the firm agreed that Cameron would be severed from SEDC matters and no longer register as a lobbyist.

In the first half of 2011, the Ethics Commission paid the Stutz firm $48,000 in fees, and another $3,000 to a second firm that handles cases when a conflict arises. During the same period, the Stutz firm collected at least $203,000 from SEDC. As a lobbying organization, the firm represents EverFlow Resources, Staff Pro and Western Towing.

Fulhorst, Cameron and Devaney described to CityBeat many of the physical and procedural measures in place to protect against a conflict. The firm also amended its lobbyist reports following CityBeat’s inquiry to better reflect Devaney and Dugard’s involvement with the Ethics Commission: Each provided less than an hour of legal services in the first half of the year.

Tracy Westen, CEO of the Center for Governmental Studies, a Los Angeles-based watchdog organization, says he’s less concerned with the specific SEDC issue than he is alarmed to learn that registered lobbyists are providing legal advice to lobbyist regulators.

“Ideally, if you contract for ethics advice with outside counsel, you want that outside counsel to give you independent advice,” Westen says. “But if the outside counsel is also lobbying the city, its advice may tilt in favor of lobbyists in general. Simply recusing themselves from judgments involving a client they’re lobbying for is a good idea, but it does not purge them of pro-lobbyist sentiments.”

Of the 106 complaints processed by the commission in 2010, 38 percent—the largest portion—were alleged violations of the city’s lobbying ordinance, according to the commission’s annual report.

“If a matter were heavily related to lobbying and I felt it was inappropriate to talk to [Devaney or Dugard] because they are registered lobbyists, then I have other partners and other senior attorneys that I can work with if I need to,” Cameron says.

Westen says that’s not enough. “It’s very difficult for a law firm to purge itself of this appearance of a conflict if some partners are lobbying and others are not,” Westen says. “I think the city really needs to go to a law firm that is not doing lobbying.”

Fulhorst says that’s an impractical idea coming from someone “working in academia,” since the “vast majority of law firms” in San Diego are registered as lobbyists under the city ordinance...