Costa Mesa Mayor’s Business Relationships Raise Questions

Costa Mesa Mayor Gary Monahan's bar, Skosh Monahans. (Photo credit: Unknown)

Costa Mesa Mayor Gary Monahan's bar, Skosh Monahans. (Photo credit: Unknown)

Monday, April 11, 2010 | When the city of Costa Mesa decided to let out a lucrative towing contract in March 2009, Mayor Gary Monahan was instrumental in making sure that two bidders -- Metro Pro Road Services and G&W Towing -- were selected by the city.

In addition to voting for these two companies, Monahan successfully fought a bid by Councilwoman Wendy Leece and then-Councilman Allan Mansoor (who is now a state assemblyman) to add a third company to the contract and shorten it from five to two years.

"We have a system that has worked very, very well here for many years," Monahan argued from the dais.

What Monahan neglected to tell his colleagues or the public was that at the time of the vote, the two primary owners of the Santa Ana-based MetroPro Road Services -- Jody Campbell and Bradley Humphreys - were both listed on the liquor license at his bar, Skosh Monahan's.

"They're ex-partners, I bought them out years ago," said Monahan last week when asked about his relationship with Campbell and Humphries. He also asserted that they were not his partners in the bar when he cast his vote on the towing contract.

However, Campbell and Humphreys are still listed on the bar's liquor license, which Monahan renewed with California Alcohol Beverage Control in 2010.

ABC officials stress that liquor licenses have to be up to date to ensure the state has proper ownership information for all establishments that serve alcohol.

"Anytime there's any changes to corporate information, the licensee is obligated by law to notify ABC within 30 days...any changes in directors, officers or stockholders," said Trung Vo, a supervising investigator for the ABC in the Santa Ana district office.

Despite Monahan's statements that he bought out Campbell and Humphreys, a license update hasn't happened. "They are still listed as officers," Vo said.

When asked why this is the case, Monahan said: "I'm working on that." Neither Campbell nor Humphries returned a call for comment.

Regardless of the bar ownership situation, Monahan did not violate the state's conflict of interest laws by voting on the towing contract because he wasn't a business partner with Campbell and Humphries in the towing company, said Bob Stern, who co-wrote the state's political reform act and now leads the Santa Monica-based Center for Governmental Studies.

"There's no legal conflict of interest," Stern said

But if both men did have an ownership stake in Monahan's bar at the time of the vote, it should have been disclosed in the interest of transparency, Stern added.

The towing contract shows how difficult it can be for the public to truly understand the ties companies bidding for services have to decision makers. And understanding these relationships will become ever more important in Costa Mesa if city officials go through with a massive privatization plan that calls for the outsourcing of 18 different city departments.

Last week, Costa Mesa City CEO Tom Hatch told hundreds assembled at a City Council meeting that the city staff would place a high priority on making the entire process transparent. In fact, Hatch and council members have all said they want Costa Mesa to be a nationwide leader in openness.

It's a lofty goal with implications that affect the fabric of a community's civic life, according to studies on transparency in government.

A recent report, funded by the John S. and James L. Knight Foundation found that residents who say a city hall does a good job of sharing information are more likely to be satisfied with their community overall (65 percent), compared with those who say it does not (45 percent).

There's also a direct link between openness and citizen engagement.

Those who see their local government as forthcoming are more likely to say average citizens can have an impact on the quality of life in their community (72 percent vs. 59 percent), according to the report.

Yet when it comes to letting out public contracts, figuring out what's a reasonable standard of disclosure is not easy.

Monahan's situation is demonstrative.

On the night that council members considered the city towing contract in 2009, staff publicly announced that everyone involved in the bidding process had signed conflict of interest forms.

Yet nobody ever mentioned Monahan's relationship with MetroPro Road Services.

As city officials go through the process of developing their own process for formal bids on city services, they will have the opportunity to set up their own set of guidelines for disclosing the business relationships between bidders, council members and city officials.

The challenge facing council members is how stringent they make those kinds of disclosures.

"I always believe in transparency," Stern said, adding that people should know about the business ties between city officials and bidders. "The question is how far do you go?"

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