Oakland Public Ethics Commission Regular Meeting - March 2, 2020

The Oakland Public Ethics Commission (PEC) held its regular meeting on Monday, March 2, 2020, at 6:30 p.m. in Hearing Room 1 of Oakland City Hall (One Frank Ogawa Plaza). Commissioners present included Chair James E.T. Jackson, Vice-Chair Nayeli Maxson Velázquez (absent), Jill M. Butler, Michael MacDonald, Janani Ramachandran, Joseph Tuman, and Jerett Yan. Executive Director Whitney Barazoto, Enforcement Chief Kellie Johnson, and Deputy City Attorney Trish Shafie were present. The meeting covered enforcement actions, a City Council salary adjustment, and informational reports. Notably, the Commission found probable cause against a building inspector for bribery, imposed a $5,000 fine on Lane Partners for an unlawful contractor contribution, and unanimously approved a 7.1% CPI-based salary increase for City Councilmembers.

Agenda Item 7 Pulled

• Executive Director Whitney Barazoto announced that Item 7 (In the Matter of the City of Oakland Police Department, Case No. 16-15, mediation summary) was pulled from the agenda and would be brought back the following month.

Consent Calendar / Minutes Approval

• The Commission approved two sets of minutes unanimously (motion by Commissioner Tuman, seconded by Commissioner Ramachandran): the January 17, 2020 Special Meeting Minutes and the February 3, 2020 Regular Meeting Minutes. Note: The agenda labels the January minutes as "January 17, 2019," but the attachment is dated January 17, 2020 — a discrepancy in the source materials.

Public Comments & Testimony

• Gene Hazard spoke multiple times during Open Forum and on agenda items, alleging that the PEC and Enforcement Chief were engaging in "selective enforcement." He raised concerns about the Oakland Promise program, claiming it operated illegally inside City Hall for two years without a legal entity status, MOU, lease, or insurance, and received approximately $4 million in city funds. He stated he had filed complaints with the Secretary of State, the District Attorney's office, and the City Clerk, and planned to file a formal cease-and-desist complaint with the California Attorney General. He also alleged the Oakland City Council violated the Brown Act four times since October 2019 by failing to report closed-session votes publicly.
• Ms. Olavalu (Love Life) echoed Hazard's concerns about Oakland Promise, stating the mayor and city administrator misused city resources and failed to produce financial statements. She also urged commissioners to vote no on Measure Q and Measure S.
• Ralph Kanz discussed the history of the PEC and City Council salary-setting, noting that the Commission was originally created (in part) to provide political cover for council salary increases. He also raised concerns about his own four-year-old public records request involving the Planning Department.
• Zach Wasserman, attorney for Andrew Haydel and Lane Partners, answered commissioner questions. He noted that the contribution to the defense fund was arguably in a "gray area" of the ordinance, but his client had instructed him not to make that argument. He also acknowledged the ordinance may need revision regarding consequences for recipients.

Discussion Items

In the Matter of Anthony Harbaugh (Case No. 18-11)

• Enforcement Chief Kellie Johnson presented the case. Harbaugh, a City building inspector hired in 2007, was alleged to have participated in a bribery scheme with another inspector, Thomas Espinosa, between January 2015 and December 2016. The alleged conduct included: soliciting and receiving bribes (approximately $300 per inspection); making or participating in governmental decisions with disqualifying financial interests; misusing City resources; failing to report significant income on Form 700 statements; and intentionally entering false inspection records into the Accela database for properties he never inspected.
• The investigation involved properties owned by Elizabeth Williams (857-859 Mead Avenue, 2735 Market Street, 877 27th Street), Bill Charman (4163 Rifle Lane), and Alex Machado (2326 Myrtle Street, 6220 Valley View). Harbaugh allegedly logged false "Pass" results in the City's Accela database, reassigned inspections to himself, and received under-the-table cash payments.
• Staff identified 13 counts of alleged violations of the Oakland Government Ethics Act, including bribery, conflict of interest, failure to disclose income, and misuse of public resources. Commissioner MacDonald asked about the dollar amounts involved; Johnson confirmed the total was "well over $5,000" and noted an FBI investigation was ongoing for potential federal prosecution.
• Commissioner questions focused on investigative techniques (bank records, text messages, witness testimony), the FBI investigation, and the recommendation to use an outside hearing officer. Commissioner Yan asked about the rationale for an outside entity; Johnson cited the complexity of the case and the need for an independent record given potential appeals.
• Votes (both unanimous): The Commission voted to find probable cause (motion by Commissioner Ramachandran, seconded by Commissioner MacDonald) and to refer the matter to an outside hearing (motion by Commissioner Butler, seconded by Commissioner Yan).

In the Matter of Andrew Haydel and Lane Partners (Case No. 19-24)

• Chief Johnson presented the case. Lane Partners, a commercial real estate firm and City contractor, made a $1,000 contribution to the Lynette Gibson-McElhaney Defense Fund on October 21, 2018, during the contractor contribution blackout period (November 2015 – July 2019) related to the Eastline project at 2100 Telegraph Avenue. The contribution violated Oakland Municipal Code section 3.12.140.
• Staff recommended a $2,000 fine (baseline penalty of $1,000 plus the $1,000 unlawful contribution). Mitigating factors included the respondent's self-reporting and lack of prior violations.
• Commissioner Tuman raised concerns about the recipient (Councilmember Gibson-McElhaney) facing no consequences, and questioned whether the fine was sufficient to deter future violations. He noted that $2,000 could be seen as a "slap on the wrist" for a major developer.
• Commissioner Butler and Commissioner MacDonald expressed views that the contractor was experienced and likely knew the rules, making the violation more serious.
• Commissioner Ramachandran initially moved for a $3,000 fine, which was amended to include a warning letter. That motion failed on a 3-3 vote (Yan, Ramachandran, Jackson in favor; Butler, Tuman, MacDonald opposed; one abstention).
• A subsequent motion for $4,000 with a warning letter also failed.
• Final motion: Commissioner MacDonald moved, and Commissioner Butler seconded, a $5,000 fine plus a warning letter. The motion passed narrowly (final tally: Yan aye, McDonald aye, Ramachandran aye, Jackson aye, Butler aye, Tuman aye — with some initial passes that converted to ayes).

Oakland City Council Salary Adjustment

• Executive Director Barazoto presented the required bi-annual salary adjustment under Oakland City Charter Section 202. The CPI for the San Francisco-Oakland-San Jose metropolitan area rose 7.1% from December 2017 to December 2019, requiring an increase to $97,480.55 per year (from the current $91,018.25). The resolution authorized only the mandated CPI increase, with no additional discretionary increase.
• Commissioner Tuman questioned whether the salary was sufficient to encourage lower-income candidates to run, and whether councilmembers receive additional benefits (health benefits were confirmed). Commissioner MacDonald clarified that the CPI increase is mandatory ("shall"), while any increase beyond CPI is discretionary.
• Public comment from Ralph Kanz and Ms. Olavalu raised concerns about the salary-setting process and compared it to other city employees who had to strike for raises.
• Vote: The resolution passed unanimously (motion by Commissioner Yan, seconded by Commissioner MacDonald).

Key Outcomes

• Harbaugh case (18-11): Commission unanimously found probable cause on 13 counts of Oakland Government Ethics Act violations and referred the matter to an outside hearing officer.
• Lane Partners case (19-24): Commission approved a $5,000 administrative penalty (up from staff's recommended $2,000) plus a formal warning letter to Lane Partners and Andrew Haydel.
• City Council Salary Adjustment: Commission unanimously approved Resolution 20-01, increasing Councilmember salaries by 7.1% (CPI-mandated) to $97,480.55, effective the first payroll period of Fiscal Year 2020-21 (July 2020).

Information Items (no action taken)

• Disclosure and Engagement: Director Barazoto reported on behalf of Lead Analyst Suzanne Doran. For the March 3, 2020 special election, approximately $300,000 in contributions were reported for Measure Q ($177,000 in support, $94,264 in opposition) plus $205,835 in independent expenditures opposing the measure. Twenty-four candidates declared intention to run for Oakland offices, with nine registered campaign committees reporting $226,856 in contributions. A candidate/treasurer training with the FPPC was scheduled for April 8, 2020.
• Enforcement Program: Chief Johnson reported on the status of 55 enforcement and mediation cases (8 in intake, 15 under active investigation, 10 under post-investigation analysis, 13 in settlement or awaiting hearing, 6 public records mediations). Three complaints were dismissed: Police Commissioner Ginale Harris (no evidence of badge misuse), Mayor Libby Schaaf (lack of PEC jurisdiction over State of the City address), and a Public Works employee harassment complaint (lack of jurisdiction).
• Executive Director's Report: Barazoto announced the annual retreat scheduled for April 10, 2020 (4-9 p.m.), and noted upcoming work including new commissioner orientation, PEC ordinance amendments going to City Council, midcycle budget responses, and the annual report.