SOUTH PASADENA — Councilman David Margrave's plumbing company will not be permitted to do business with the city as long as he serves on the City Council.
The council last week voted 4 to 0 to heed the advice of former City Atty. Ronald J. Einboden and cease doing business with the firm because Margrave's presence on the council and his votes to approve payments to his own company might be in violation of a state conflict-of-interest law. Until March, Margrave's Morrow & Holman Plumbing Inc. had done all the city's plumbing maintenance service, City Manager John Bernardi said.
The action came after a May 23 state Supreme Court ruling in a case involving the same law. The council had been waiting for the court ruling before deciding whether to follow Einboden's recommendations.
Margrave, who was out of the country and did not participate in the vote, could not be reached for comment.
The council postponed a formal decision until its July 17 meeting on whether to seek reimbursement of more than $14,500 paid to Margrave's firm since his election in April, 1982, Bernardi said. Einboden had indicated in a written opinion to the council in April that the city could seek reimbursement for the money under state Government Code Section 1090, the conflict-of-interest law. Einboden resigned his position June 1 saying Margrave had threatened to sue him over the opinion, an allegation which Margrave denied.
Councilman Lee Prentiss said in an interview that he thinks the Supreme Court ruling in an Albany, Calif., case forces the city to demand reimbursement for the money paid to Margrave's firm. The court ruled unanimously in that case that former Albany Councilman Hubert F. Call must reimburse the city all the money he was paid for land he sold to a developer whose condominium project was approved while Call was on the council, even though Call had abstained from most votes involving the project. The court also ordered Call to pay interest on the money and forfeit the property and made it clear that the stiff penalty was imposed to deter other public officials from violating the conflict of interest law.
"In reality," Prentiss said, "the decision has been made (for us) by the Supreme Court that Mr. Margrave is going to have to pay it back."
Margrave always has acknowledged his financial interest in the firm and voted on the payments only after Einboden's predecessor, Charles Martin, told him it was legal, Margrave and other city officials have said.
But Prentiss, who was elected to the council last year, broached the subject again in March. The council withheld payment of a $1,386.76 plumbing bill and suspended business with Margrave's firm while the matter was being studied.
Einboden was directed to ask the Fair Political Practices Commission for an opinion on whether Margrave had breached the Political Reform Act of 1974, which is enforced by the commission. The council also instructed Einboden to render his own opinion.
The commission said that Margrave had not violated the Political Reform Act.
But in his 14-page opinion submitted to the council in late April, Einboden said that Margrave had violated Government Code Section 1090, which places an "absolute prohibition" against the city doing business with a councilman's firm while he is on the council.
Prentiss said it is unlikely that criminal charges will be brought against his colleague because "Margrave never showed any malice; he just had bad advice."
Margrave has repeatedly disagreed with Einboden's opinion and has vowed to seek a separate interpretation of the law from the attorney general's office. He said in a recent interview that he believes he should be paid for the plumbing work and said that his own attorney advised him that Einboden's interpretation may be flawed.
Meanwhile, the council Wednesday appointed Assistant City Atty. Charles (Casey) Vose to succeed Einboden. Vose works for Oliver, Stoever & Laskin, the same Los Angeles law firm as Einboden, and will work under the same $1,500-a-month retainer arrangement, Bernardi said.
The council also put off action on its own conflict-of-interest guidelines because some councilmen believe that the court's ruling and existing state law make it unnecessary, Bernardi said.
"I feel state law adequately covers this area," Mayor Sam Knowles said.