Former state Sen. Michael Rubio (D-Shafter), left, shown in 2012, denied… (Rich Pedroncelli / Associated…)
SACRAMENTO — Ethics officials are reviewing financial dealings between a state senator who abruptly resigned last week to work for Chevron and an oil executive whose firm lent him hundreds of thousands of dollars while he was in office.
Officials at the Fair Political Practices Commission said Thursday they are studying a complaint that Michael Rubio, a Democrat from the Central Valley town of Shafter, may have improperly benefited from real estate deals with a refinery executive. The executive, Majid Mojibi, is the president of San Joaquin Refining Co.
Mojibi's refinery company is among those that could benefit from the state's push to relax environmental laws, an effort Rubio was spearheading in the Legislature.
Kern County records show that a separate firm run by Mojibi, DCM Asset Management LLC, bought Rubio's Bakersfield home for $185,000 in a short sale in 2011. The price was $40,000 above the home's assessed value. The real estate website Zillow.com had estimated the home to be worth $97,000 at the time.
Rubio said Thursday that the Zillow listing was inaccurate and that the deal was consistent with the market at the time. Rubio paid $270,000 for the house in 2004.
After the sale of the Bakersfield home, Rubio said, he accepted a loan from Mojibi's firm to buy a $681,000 home in El Dorado Hills, a Sacramento suburb.
Rubio sold that 4,660-square-foot home back to Mojibi's company for the same price and now rents it for $3,000 a month. The transactions were originally reported Wednesday by the Bakersfield Californian, Rubio's local newspaper.
"I wanted to get a conventional loan. I was unable to do it because of the [Bakersfield] short sale," Rubio told The Times.
He said he acted on his attorney's advice, and the original loan was for 6%, while market-rate loans were going for 4%. "It was above the market-rate interest," Rubio said.
Rubio, who wrote bills in the last two years that would have made it easier for the oil industry to operate in California, said the real estate deals were proper.
"Mr. Mojibi is a family friend. I consider him family," Rubio said. "I have a personal relationship with him irregardless of his occupation or the business interest that he has."
Phillip Ung, an advocate for California Common Cause, said an investigation should be conducted because public and private interests are inherently in conflict in such transactions. "On its face, that is a lot of money and favor to be exchanged," Ung said.
A decision on whether to launch a formal investigation will be made within 10 days, said Gary Winuk, chief enforcement officer at the Fair Political Practices Commission.