The state’s political watchdog has launched an investigation into Santa Ana Mayor Miguel Pulido’s real estate deal with a city contractor that ultimately netted the mayor a nearly $200,000 profit, Voice of OC has confirmed.
News of the probe by the Fair Political Practices Commission or FPPC, first reported Monday by the Los Angeles Times, follows revelations that the city attorney — and most likely the district attorney’s office — are also investigating the transaction, which at least one ethics expert said could have been a bribe.
The FPPC did not receive a formal complaint but rather launched its investigation after independently learning about the matter, according to agency spokesman Jay Wirenga.
In November, Voice of OC first reported that in 2010 the mayor and members of his family swapped a parking lot they owned in downtown Santa Ana for a house in Westminster owned by Rupen James Akoubian, president of NAPA Orange County Auto Parts, a longtime city contractor.
The fair market value of the house at the time of the transaction was $230,000 more than the lot, Orange County Assessor’s Office records show. Then in 2012, Pulido’s family members signed the house over to him solely, and he sold it for $397,000, a $197,000 profit.
Over the course of those transactions, Pulido voted unanimously with the City Council for two separate city contracts with Akoubian’s firm, including a $1.35-million no-bid contract that made NAPA Orange County Auto Parts the city government’s exclusive auto parts supplier.
In addition to possibly casting an illegal vote on the first of the two contracts with NAPA Orange County Auto Parts, conflict of interest experts said that the mayor potentially violated the state’s limit on gifts to public officials, which at the time was $420.
Under the Political Reform Act, public officials can only purchase real estate and other things at fair market value. A discount purchase can be made only if the same deal is offered to the public at large.
That means the property swap could have represented up to an illegal $230,000 gift to the mayor depending on the size of his interest in the home, according to conflict of interest experts.
Also, the mayor didn’t disclose his interests in the Westminster house or income from the sale on public statements of economic interest, as required by state law. The mayor later amended his disclosure forms for 2010, 2011 and 2012 to show his interest in the home.
The FPPC is investigating possible violations by the mayor, according to a Feb. 18 letter from the agency.
Akoubian told the Times that he dealt only with the mayor’s father and that nothing else was promised or exchanged in the property transaction. He said the parking lot, which is located behind his store, was extremely valuable to his business and he would have given “two homes” for it.
Luis Pulido, who is Miguel Pulido’s brother and works for the mayor as a consultant on the South Coast Air Quality Management District, might also end up the subject of an FPPC investigation.
Like his brother, Luis Pulido also recently amended his disclosure forms to show interest in the Westminster house from 2010 to 2012. He then was among the Pulido family members who transferred the house to the mayor before it was sold.
Depending on the size of his interest, Luis Pulido might also have received an illegal gift of tens of thousands of dollars, according to Bob Stern, who helped write the political reform law. An FPPC spokesman said, however, that the agency has not begun investigating Luis Pulido.
Clarification: A previous version of this article indicated that experts say Mayor Miguel Pulido’s vote on a $1.35 million contract with NAPA Orange County Auto Parts could have been illegal. The experts were referring to an earlier contract between the city and NAPA Orange County Auto Parts.