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Chula Vista Mayor Cox Cleared of Conflict of Interest by FPPC

December 15, 1987

Chula Vista Mayor Greg Cox was cleared Monday of any wrongdoing in failing to disclose a $2.2-million commercial real estate loan from Home Federal Savings on his 1985 and 1986 financial statements.

The state Fair Political Practices Commission notified Cox in June that he should have disclosed the loan and told him the transaction was under review by the watchdog agency for possible violations of the state Political Reform Act.

The Times reported that Cox failed to disclose the loan on his financial statements and that he cast favorable votes on two large housing developments in Chula Vista that were co-developed by Home Federal. According to the articles, Cox was initially turned down by Home Federal but appealed to Kim Fletcher, chairman of Home Federal, and eventually got the loan approved.

Cox subsequently amended his 1987 statement of financial interest in April to include the loan. After amending his financial statement, Cox abstained on about 10 City Council votes that involved Home Federal projects.

No Conflict of Interest

On Monday, Cox was notified in a brief letter from the commission that its review concluded that he did not violate conflict-of-interest laws by voting on Home Federal projects after receiving the loan. In addition, the FPPC said that Cox's reporting of the loan, though tardy, was proper.

"We note that you have appropriately amended the specified statements of economic interest. Furthermore, on the basis of evidence presently before us, we are unable to conclude that the Home Federal loan was made other than in the ordinary course of business and on terms available to the public without regard for official status," said the commission letter, which was two paragraphs long.

Cox was unavailable to comment on the FPPC's ruling, a secretary said Monday. In June, Cox insisted that he did nothing illegal because he neither sought nor received preferential treatment from Home Federal in obtaining a market-rate loan. His votes in favor of Home Federal on development matters in Chula Vista were not influenced by the loan, Cox said.

Chula Vista City Atty. Tom Harron supported Cox and said that his review of the loan revealed no conflict of interest on the mayor's part. "As long as this is a market rate loan, he can participate in (council) decisions," Harron said in a June statement.

Initially, Cox was turned down by three lenders--Great American First Savings Bank, Coast Federal Savings and Home Federal--before he asked Fletcher to intervene on his behalf and resubmitted the loan application to Home Federal's loan committee.

Cox used the loan to refinance a troubled Texas apartment investment. Home Federal foreclosed on the loan in July, less than 18 months after approving it.

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