Orange County government’s top legal advisor has urged the Board of Supervisors to levy fines against District Attorney Tony Rackauckas’ chief of staff, Susan Kang Schroeder, and report her to state officials if she doesn’t retroactively file five years worth of conflict of interest forms by mid-July.
County Counsel Nick Chrisos made the recommendation Wednesday as part of an item for the Board of Supervisors’ June 16 agenda. A majority of the board’s five members must vote to approve his recommendation for it to take effect.
“…if Ms. Schroeder does not timely file, direct Clerk of the Board to assess fines of $10 per day per Form and up to $100 per Form, report failure to file to Fair Political Practices Commission (FPPC), and deposit fines received into the County general fund,” Chrisos’ recommendation states. The fines are set by state law, but if Schroeder doesn’t make the deadline, the FPPC could levy additional financial penalties.
Chrisos also advised the supervisors to order Rackauckas to put Schroeder on his list of workers who are required to file public forms that list a key employee’s outside income, investments, gifts, and other assets. Rackauckas also was given a mid-July deadline.
Neither Susan Schroeder nor Rackauckas returned telephone calls seeking an interview about the pending Board of Supervisors action.
For 40 years, all California elected officials and all state and local workers who make, or participate in making, decisions that could affect their outside financial interests, have been required to file conflict of interest statements, also known as Form 700s.
In Orange County, about 2,275 of the roughly 16,000 county workers file the forms each year.
State law also requires someone who takes on a newly created position that fits the filing requirements to begin filing, even if that position hasn’t yet been added to an agency’s list of those who are required to file.
Schroeder became Rackauckas’ chief of staff, a newly-created position, in 2010, but never has filed the conflict of interest forms and Rackauckas hasn’t listed her as one of his staff members who is required to file.
She has at least one outside business interest, co-owning a company, M3Connection, that promotes the careers of musicians, according to state records.
Her business partner, musician Scott Foster, performed for free at a 2013 DA’s office charity event, and DA’s office news releases promoting the event were sent out with Schroeder’s name on them. Video of the performance later was posted on the DA’s office official YouTube site and also used on Foster’s professional web site to promote him, along with the credit line “Posted by m3connection…,” the company that he and Schroeder own.
In February, Voice of OC reported Schroeder, a lawyer, was the only one of the DA’s five highest-ranking executives who wasn’t filing the forms.
That meant, according to government experts, either she should have been disclosing her financial interests, or her title and job description make her sound far more important than she is.
According to her official job description, she reports directly to Rackauckas, giving “advice on high-profile, sensitive cases.” In addition, she is involved in myriad other duties, including providing “confidential staff support to the District Attorney on the most sensitive and complex matters.” She also is in charge of the DA’s news media team.
Until last year, she was married to former California Republican Party chairman and behind-the-scenes GOP powerhouse Michael J. Schroeder, a multi-millionaire who helped create malpractice insurance companies for chiropractors, massage therapists, acupuncture practitioners.
Michael Schroeder also was instrumental in getting Rackauckas elected in 1998 and last year was Rackauckas’ re-election campaign chairman. Susan Schroeder was Rackauckas’ 2014 political campaign manager while simultaneously serving as his chief of staff.
The DA’s office has prosecuted a number of chiropractors and massage therapists in the past 12 years, including cases where Susan Schroeder’s name is listed on news releases as the official contact.
On April 5, Orange County political watchdog Shirley Grindle complained to the FPPC about Susan Schroeder not filing the conflict of interest statements.
The FPPC advised Grindle on April 17 to first file her complaint with the Orange County Board of Supervisors, which is the organization that reviews conflict of interest statements for agencies in the OC, including the DA’s office.
Grindle forwarded her complaint to the County Counsel, the lawyer for the supervisors, on April 21.
Two days later, Rackauckas reversed course and the Orange County Register reported Schroeder would have to start filing conflict of interest forms. But it wasn’t clear if she would have to go back and file for the previous five years. And she wasn’t alone. Under the new policy, roughly 250 lawyers in the DA’s office would have to file, not just the 21 key executives who previously filled out the forms.
According to the item for next week’s Board of Supervisors’ agenda, Chrisos’ received “informal advice” May 13 from the FPPC that said Schroeder had to file the conflict of interest forms retroactively.
“…the chief of staff position must be designated in the County’s Conflict of Interest Code and that unless disclosure has been tailored, Ms. Schroeder must file Form 700s with full disclosure going back to when she assumed the chief of staff position,” according to the report for the agenda item.
Less than two weeks after the FPPC sent out its informal opinion, the DA’s office told the Register that Susan Schroeder would file retroactively.
All county agencies must update their lists of 700 form filers and have the lists approved by the Board of Supervisors every two years. Chrisos said the DA’s office should have submitted an update in 2014, but didn’t. He’s asked the board to order Rackauckas to update and submit his list. If the supervisors approve Chrisos’ recommendations, Rackauckas and Susan Schroeder will have 30 days to turn in their overdue reports.
“I’m not through with this,” Grindle said of the plan pending before the Board of Supervisors. “Mr. Rackauckas should hold his head in shame” for not requiring Susan Schroeder to file conflict of interest forms for the past five years. “Why did he exempt her?”
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