FPPC fines Mayor Kevin Johnson, former council candidate

rlillis@sacbee.comFebruary 10, 2014 

RB Tower Bridge Dinner

Sacramento Mayor Kevin Johnson speaks with members of the press during the 'Farm to Fork' private dinner on the Tower Bridge in Sacramento on Sunday, September 29, 2013.

RANDALL BENTON — RBenton@sacbee.com

The state’s political watchdog agency on Monday issued its second fine against Sacramento Mayor Kevin Johnson in just over a year. It also targeted a former City County candidate and a city planning commissioner.

Johnson was hit with a $1,000 fine by the Fair Political Practices Commission, which charged the mayor failed to properly report travel expenses funded by the Walton Family Foundation, the charitable organization started by the founding family of Wal-Mart.

Also Monday, the FPPC announced a $7,000 fine against former City Council candidate Joe Yee, alleging Yee did not identify some donors to his campaign and failed to pay full price for office space his campaign rented from developer Paul Petrovich. And Phil Harvey, a long-time member of the city’s planning commission, was revealed as the target of an FPPC probe focusing on his position as a senior manager in Petrovich’s development company.

For the mayor, the latest fine was much smaller than the $37,500 penalty he paid in 2012 for failing to report in a timely fashion thousands of dollars in donations he solicited for nonprofits and charities. Those donations – known as behests – have come into focus at City Hall in recent months as elected officials increasingly rely on them to boost organizations they either started or support.

According to the latest FPPC investigation, Johnson signed a grant proposal application to the Walton Family Foundation in 2012 that included a request for money to cover his travel to education conferences and events. The $500,000 grant was sought and received by Stand Up, an education organization that Johnson founded.

When the mayor filed his statement of economic interest with the city in 2013, he reported that the travel costs were provided by Stand Up – not the Walton Family Foundation, according to the FPPC. Johnson had reported that Stand Up paid $22,713 for him to attend education conferences around the country in 2012.

“The portion of the travel earmarked for Respondent (Johnson) was a gift from the Walton Family Foundation, not directly from Stand Up,” the FPPC complaint reads. “Respondent was required to disclose Walton Family Foundation as the source of these gifts of travel on his 2012 annual SEI (statement of economic interest).”

The mayor has agreed to pay the $1,000 fine. The commission will vote on whether to approve the fine at a later date.

Johnson’s solicitation of donations from Wal-Mart and the Walton Family Foundation – which has no direct link with the superstore chain – came to light last summer when The Sacramento Bee reported the company and the charitable foundation made nearly $800,000 in behests to groups associated with the mayor and members of the City Council since 2005.

The City Council voted last year to ease restrictions on new big box superstores in the city, a change that could benefit Wal-Mart. Despite the change, the company has said it has no immediate plans to build a new store in the city.

Daphne Moore, a Walton Family Foundation spokeswoman, said “foundation staff is not involved in Wal-Mart business decisions” and that the organization is separate from the Wal-Mart chain.

The foundation’s largest financial investment is in education, and “Mayor Johnson is engaged in national work related to that area and that’s why the foundation has supported these causes,” Moore said.

The complaint against the mayor was filed by Eric Sunderland, a former city school board candidate.

The FPPC declined to levy fines against the mayor for two of Sunderland’s three complaints. Sunderland had also alleged that the mayor had a conflict of interest when he voted to approve the changes to the big box ordinance and that the mayor had a financial stake in the vote after the Walton Family Foundation gave $8 million to StudentsFirst, the education organization started by Johnson’s wife, Michelle Rhee.

“The Mayor is pleased the FPPC dismissed two of the three allegations contained in the complaint,” Johnson’s spokesman, Ben Sosenko, said in a text message. “The only substantiated allegation boiled down to an issue of paperwork, with the FPPC noting that while he timely reported all travel reimbursements, another nonprofit source of those reimbursements should have been identified in the filed forms. Those forms have since been amended.”

The fine against Yee – who ran unsuccessfully in 2012 for the City Council seat representing Land Park, the central city and part of South Natomas – stemmed from his rental of an office adjacent to the Safeway supermarket on 19th Street in midtown. The office is owned and controlled by developer Paul Petrovich.

Yee told the FPPC he had paid Petrovich $1,400 for three and a half months of rent after the watchdog agency informed him they were investigating a complaint that Yee had not reported rental payments for the space.

But an FPPC investigation found that the fair market value of the office was $1,000 a month – or $600 more per month than Yee had paid. The agency said that by paying below market value, Yee accepted an unreported donation of $2,100 from Petrovich for the 2012 election cycle, which exceeds the city’s campaign limits.

Yee also failed to timely disclose the occupations and employers for 60 contributors to his campaign, the FPPC complaint alleges. He has agreed to pay a $7,000 fine. The complaint against Yee was filed by election law attorney Amber Maltbie.

Yee did not return phone messages seeking comment.

In the third city-related case, the FPPC alleged that Harvey tried to use his position on the planning commission to influence city decisions on the Curtis Park Village development. Harvey is a senior vice president with Petrovich Development, which is the developer of the 72-acre site, and FPPC documents said he “attempted to use his official position to influence a governmental decision in which he had a financial interest.”

According to FPPC documents, Harvey communicated with a senior planner about development documents related to the project and submitted paperwork stating that the removal of a heritage tree on the site would not be subject to requirements that call for the tree’s loss to be mitigated.

Harvey, who has served two stints on the planning commission totaling roughly 16 years, denied the allegations and said he would fight the charges before an administrative judge. He said he never mentioned his position on the planning commission when communicating with city staff, and recused himself from votes affecting Curtis Park Village.

“(The FPPC) offered me a settlement and I said ‘No’ because I didn’t feel I’ve done anything wrong,” he said.

Petrovich declined to comment.

Call The Bee’s Ryan Lillis, (916) 321-1085. Read his City Beat blog at www.sacbee.com/citybeat.

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