Story and photos by Joe Livernois
The state Fair Political Practices Commission has opened an investigation into allegations that the Pacific Grove city manager failed to disclose a gift of discounted air flights on his statements of economic interests.
The allegations were first made public in a report by the Monterey County grand jury last year. The grand jury looked into several issues surrounding the doomed Project Bella development, an effort to build a 160-suite luxury hotel at the site of the American Tin Cannery building, across the street from the Monterey Bay Aquarium at 125 Ocean View Blvd.
Among its findings, the grand jury determined that the city spent more than $100,000 to assist the developer, Domaine Pacific Grove, on expenses that were never reimbursed. Voters in Pacific Grove had approved rezoning of the Tin Cannery site, which opened the doors for the development in 2016, and the city fronted the expenses for much of the preliminary planning work, with the expectation that the developer would reimburse those expenses.
But Domaine’s permit for the property expired in February 2017 and the developer’s lease with the property owner expired several months later. A new developer has reportedly expressed interest in doing something with the site, but no proposal has been submitted to the city. The grand jury’s investigation was an effort to determine how such a promising proposal ended so badly and so quickly.
The grand jury also reported that City Manager Ben Harvey, who at the time was the interim city manager, was a close friend of Jared Ficker, an associate of the developer who was doing business on behalf of Domaine. Harvey regularly commuted from the Monterey Peninsula to his home in Los Angeles County using Ficker’s corporate membership at Surf Air, a private air service operating out of San Jose. How those flights were paid for, by whom and to whom and how much of the value of those flights should be considered a “gift,” are items of some confusion — and the issue is at the heart of the Fair Political Practices Commission investigation.
Careful in its wording, the grand jury found that Harvey “displayed a lack of sensitivity to the appearance of a conflict of interest created by joining Jared Ficker’s group membership in Surf Air.” A number of Pacific Grove residents grew suspicious after the commute arrangement became known to the public. “While there is nothing illegal about this,” the grand jury reported, “the appearance of a conflict of interest was inescapable.”
But the complaint to the FPPC, filed by Pacific Grove attorney Jane Haines, alleges that Harvey’s actions may have violated public disclosure regulations.
Harvey told Voices of Monterey Bay that Haines has been pursuing the issue in different venues for years. The FPPC complaint is her second attempt to get the FPPC to look into it. “This is her fourth bite of the apple at this point,” Harvey said. “I absolutely, 100 percent, vehemently disagree with her, and at this point this borders on harassment.”
Haines said she is pursuing the issue at the invitation of the city. Then-Mayor Bill Kampe and the City Council “told me that if I have evidence of wrongdoing, I should take it to the authorities, and that is what I did,” she said.
At issue is whether an arrangement Harvey had with Ficker and Surf Air constituted a “gift” that should have been included in the city manager’s financial disclosure statements. Haines’ complaint said the arrangement was indeed a gift because Harvey received a discounted rate not available to others. However, Harvey’s employment contract with the city includes reimbursement of $3,000 for housing and transportation costs. Nevertheless, Haines argues that Harvey’s travel and housing costs sometimes exceeded the allowance, so the reduced cost of his Surf Air membership constituted a personal financial break.
The grand jury looked into the same issue, and its report concluded that Harvey’s arrangement with Surf Air and Ficker was an “inescapable” appearance of a conflict of interest, even if there was nothing illegal about it. If nothing else, the grand jury seemed baffled over why Harvey would opt for the Surf Air flights, since direct commercial flights out of the Monterey Airport would have been more convenient and would have spared Harvey the Uber expenses he was incurring to get to Santa Clara County. “Commercial travel would have been much less expensive, and a great deal more convenient,” according to the grand jury report.
In the end, the grand jury issued 26 separate “facts” about the city’s handling of Project Bella, 15 “findings,” and eight recommendations. It recommended the City Council take another look at its contract with Harvey, especially in regards to its reimbursement for travel expenses.
The city’s formal response to the grand jury, submitted in August, dismisses, rejects or argues against virtually every finding and recommendation contained in the report, particularly in regards to the allegations regarding Harvey and Surf Air. The city’s response pointed out that the cost of private air travel versus commercial jets isn’t even relevant. Harvey was given a monthly allowance from the city to cover both transportation and housing. “The amount was part of his compensation and available for him to use at his discretion — for travel and housing,” the city response states. “Any spending more than the allowance would be a personal expense and not a cost to the city.”
Haines asked the Fair Political Practices Commission to investigate the ties between Harvey and Ficker, and her argument that Harvey should have disclosed the “gift” of discounted membership with Surf Air. Her initial request was rejected, but she re-submitted her complaint in January to include more information and potential evidence.
The Fair Political Practices Commission was established in 1974 by voters in California to regulate and enforce campaign finance, lobbying activity and conflict of interest at all levels of government in the state.
In her complaint to the FPPC, Haines alleges that Harvey violated public reporting laws when he failed to “disclose the economic benefit he received from Mr. Ficker’s gift to him of discounted membership in Surf Air.” According to the complaint, an individual membership cost for Surf Air services was $1,950, but Harvey paid Ficker $1,375 a month to be included in Ficker’s corporate membership.
Last month Haines was notified by the FPPC that the additional information was sufficient “to reopen this matter.”
At the time Project Bella was being debated in the Pacific Grove, the city hired a law firm to look into public charges and complaints about the way the project was being handled by public officials. The resulting report, by the law firm Jackson Lewis, was never made public; instead the investigator presented a PowerPoint presentation to the City Council with the conclusion that there had been no malfeasance.
When first contacted by Voices this week, Harvey said he was not aware that the FPPC investigation had been initiated. He earlier had contact with FPPC administrators when Haines filed the first complaint last year, but said the latest notification he received from the FPPC went unnoticed in his email queue.
He said he was surprised that Haines continues to push the issue. “I really don’t know why on earth she would continue with this after it continues to be disproved,” he said. “It is a bit frustrating.”
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