The Santa Monica City Council has asked the city attorney to draft a "revolving door" ordinance that would keep high city employees, elected officials and appointees from conducting business with the city for two years after leaving office.
There is no city law, other than general conflict of interest provisions, prohibiting departing employees and officials from representing people and companies before the city on issues in which they were substantially involved while in office. "This is a city that operates in a goldfish bowl," said Mayor Christine E. Reed. "I think we have to be cleaner than clean."
Interested in Airport Land
The proposed law, which could affect department heads, council members and upper city management officials, appears to have been sparked by concerns about the business projects of former City Manager John H. Alschuler since he left his post last September. The law would not be retroactive, however.
When Alschuler left his post, he became a partner with the consulting firm of Hamilton, Rabinovitz & Szanton, which had done much of the economic analysis on the city's land-use plan. About a month before stepping down as city manager, Alschuler also became a trustee with the Stahl family trust, which owns several acres of property in Santa Monica.
Last week, Alschuler contacted city officials on behalf of David Stein, an Orange County real estate developer who is interested in submitting proposals for a development on residual land at the Santa Monica Airport. The city is trying to decide how to use 43 acres that will become available for development as a result of reorganization of the airport.
Stein, a partner with Barry Brief of the Stein-Brief Group, is developing 550 acres of beachfront property between Laguna Beach and Dana Point in what is known as the Monarch Beach project. Stein's company purchased the land for $80 million in September, 1983, in one of the largest real estate deals in Orange County history.
"I work with him," Alschuler said of Stein. "At this point . . . we're discussing the possibilities (at the airport) as a lot of other developers are."
At Tuesday's City Council meeting, Reed placed the "revolving door" issue on the agenda at the last minute.
"I feel that it puts me in a difficult position to make an informed and impartial decision, and I think that other people are put in a difficult position to deal even-handedly with all developers when one developer is being represented by the immediate past city manager of the City of Santa Monica," Reed said.
'An Honest Guy'
"I don't think John is guilty of anything," Councilman David G. Epstein said. "But people sometimes raise their eyebrows on things. It's like the procurement guy from the Pentagon going to work for Lockheed."
Epstein said Alschuler's involvement on the airport issue may not look good for the city. "(Alschuler) had taken a responsibility for the (airport) plan," Epstein said. "It could seem to someone that he was selling not his expertise but some kind of inside information he had from working in the city. I think John is an honest guy, but it may be better to have some rules about it."
Councilman Dennis Zane disagreed. "In my mind there were no misgivings about John's activities that prompted this move," Zane said. "I think it is possible in the future for people to use their position in an improper way. I don't think that has occurred in the case of John Alschuler."
Councilman Ken Edwards said that Alschuler's actions may have motivated Reed to offer the proposal but that the city has been thinking of enacting a "revolving door" law for a long time.
Denies Competitive Advantage
"(The airport) is one area where (Alschuler) certainly has an advantage over other competitors because of his having participated in the final negotiations with the Federal Aviation Administration (over the airport)," Edwards said. "I don't think anyone has expressed any animosity toward John, but we wanted to bring to light similar incidents in the future."
Alschuler denied that he has a competitive advantage. "I don't think so," he said. "You have to understand this is not pertinent to the deal I negotiated with the Federal Aviation Administration. Yes, I understand the context, but the question of what to do with the residual land was not dealt with in the negotiations. This is a whole new issue, a whole new ballgame."
In an interview last fall, Alschuler said that he had "no present plans to do business in Santa Monica." Alschuler also said that while he was city manager representatives from the Stahl family trust would "periodically call and ask for advice. I assume they found the advice useful, as did many other people."
The City of Los Angeles, the State of California and the federal government have laws governing activities of former employees. In Los Angeles, a past employee is permanently restricted from representing a party before the city on an issue in which he was substantially involved as a city employee.