MAYOR TO PAY $3,000 IN FINES FOR VIOLATIONS.
Los Angeles Mayor Richard Riordan has agreed to pay $3,000 in fines to the state Fair Political Practices Commission for violating state conflict-of-interest laws by increasing a city contract for a tenant in a building he co-owns.
Riordan's attorney confirmed Wednesday that the mayor signed a stipulated settlement with the FPPC in which he admits to two counts of violating state conflict laws.
``The mayor felt this was a fair settlement,'' said Riordan attorney Colleen McAndrews. ``It was an honest mistake.''
Because he admitted the mistake, FPPC investigators agreed to reduce the administrative fines from the maximum of $2,000 per count to $1,500, sources said.
``The reason the fines were reduced was because he turned himself in,'' said one source familiar with the case.
The Daily News reported in April that Riordan had signed off on a $4 million contract for City Hall renovation that financially benefited A.C. Martin and Associates, a major tenant in the downtown Fine Arts Building that Riordan partly owns.
The mayor also approved a $1 million addition to the contract.
Riordan notified the FPPC of his action after he was questioned about it by the Daily News.
``The mayor went to Sacramento and informed them of the conflict and cooperated fully with their review,'' McAndrews said. ``They proposed what they felt was a fair settlement. He felt it was fair given the circumstances.''
Riordan has a $1.75 million interest in the Fine Arts Building. The settlement said the Martin firm, referred to as ACMA, occupied three floors of Riordan's building, encompassing more than 25,000 square feet, and paid monthly rent of $50,000 to Riordan's partnership.
``Accordingly, at all relevant times, Richard Riordan had a financial interest in any governmental decisions involving ACMA,'' the settlement says.
Riordan stipulated on two counts that he had violated the state government code ``by participating in a governmental decision in which he knew or had a reason to know that he had a financial interest.''
``The failure of the respondent to comply with the requirements of the Political Reform Act justifies the imposition of the agreed upon penalty,'' the settlement report states.
Riordan wrote a cashier's check for $3,000 to the state agency Aug. 9.
If the settlement recommended by the FPPC investigators and signed by Riordan is approved by the state commission Sept. 5, the penalty would be an administrative one, not a criminal penalty.
McAndrews said that on Aug. 8, 1994, Riordan signed off on the scope of work and $153.5 million budget for the City Hall rehabilitation project adopted by the City Council. On June 7, 1995, the mayor concurred with an ordinance adopted by the council adding more than $4 million to the contract for engineering and design services by A.C. Martin, bringing the firm's contract to more than $12.8 million.
Then, on July 12, 1995, the mayor signed an amendment to A.C. Martin's contract, adding more than $1 million for seismic analysis and design services.
``By the time it got to the mayor (Riordan), his signing off on it was almost pro forma,'' McAndrews said in April. ``Thirty-eight hundred documents come through his office in a year, and this was one of them.'' The mayor did not see the conflict in having A.C. Martin as his tenant and as the beneficiary of a major city contract because the building the firm occupies does not turn a profit, his attorney said.
She said all of the rent from the Fine Arts Building has gone toward mortgage payments, property taxes and building operating expenses.
However, one state official familiar with the case said Riordan should not have acted on the Martin contract.
``He has a financial interest,'' the official said, speaking on condition of anonymity. ``He made a governmental decision that materially affected an interest of his.''
The fines come as Riordan is facing criticism for another possible conflict of interest involving his work to get the owners of the Kings hockey club to build a $240 million sports arena next to the downtown Convention Center.
Riordan disclosed last week that he is recusing himself from any governmental decision on the project because he owns The Original Pantry Cafe and a parking lot that is 390 feet from the proposed arena site.
He also cited the ownership of the Fine Arts building within 2,500 feet of the proposed arena boundary.
California Common Cause director Ruth Holton said Wednesday that Riordan should have removed himself from involvement in the project months ago, when his office first started pushing the matter.
``He should have recused himself from the beginning,'' Holton said. ``He had a very clear conflict of interest. He stands to gain economically if they build the arena next to his property. He stands to make a lot of money.''
Before he recused himself, Riordan signed a letter Aug. 6 that invited developers Philip Anschutz and Ed Roski to submit a proposal to the city to build the sports arena next to the Convention Center.
In the letter, Riordan and four other city officials said that they felt ``an arena adjacent to the Los Angeles Convention Center would further the goal of revitalizing downtown Los Angeles by providing a venue for sports and entertainment that will draw visitors to the downtown area.''
Mayoral spokeswoman Noelia Rodriguez said McAndrews has determined that the letter did not violate conflict rules because ``it was not a government action or decision. It was simply an invitation to build in Los Angeles.''
``The mayor's counsel has cleared it,'' Rodriguez said.
Still, McAndrews has asked the FPPC to provide advice on the issue, including whether Riordan's staff also is disqualified from acting on the arena proposal, Rodriguez said.
FPPC spokesman Gary Huckaby said the review is ongoing.
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|Publication:||Daily News (Los Angeles, CA)|
|Date:||Aug 22, 1996|
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