In the latest chapter in the curious saga of Santa Ana Mayor Miguel Pulido’s finances, financial disclosure statements show him taking out a number of personal loans from wealthy friends and power brokers.
Pulido’s statement of economic interests for 2014, which he filed on April 1, reveals eight outstanding personal loans given over the past two years that could add up to anywhere between $53,008 and $530,000.
The reason for the wide range of possible amounts is the disclosure statements — also known as Form 700s — don’t require public officials to reveal the specific amounts of the loans, only that they fall within ranges of either $1,001 to $10,000; or $10,001 to $100,000.
Why exactly the mayor is borrowing so much money isn’t clear. Two lenders indicated that Pulido might be having financial troubles and one referenced a tax problem.
He has for years been delinquent on his consulting business’s state income taxes; and his family’s auto care shop was at one point slated for the county tax collector’s auction block due to nonpayment of property taxes.
It is also possible that the mayor is running up debts relating to investigations by both the district attorney’s office and the state Fair Political Practices Commission into a property swap with a city contractor that netted the mayor a nearly $200,000 profit. After trading properties with the contractor, the mayor voted for a $1.35 million, no-bid contract to make the vendor the city’s sole auto parts supplier.
Pulido hired high-priced criminal defense attorney Al Stokke to defend himself from possible charges relating to the investigations, and, separate from the personal loans, has raised over $40,000 for a legal defense fund he started to defray the costs of legal fees, according to the fund’s campaign finance disclosure records.
Pulido didn’t return a phone call seeking comment.
The lenders listed on the disclosure form include: Philanthropist James “Walkie” Ray; Orange County Mortgage Inc. owner Wallace Rodecker; Los Angeles County Small Craft Harbor Commissioner David Lumian; Washington, D.C. resident David Freeman; technology entrepreneur Safi Qureshy; the Henry Nicholas-owned business Global Media and Technology, LLC; Carson City-based The People’s Storehouse; and Paul Musco of the Santa Ana precious metals business Gemini Industries.
The majority of the lenders either refused to comment or could not be reached for comment. But two who were interviewed said they were surprised at the number of lenders on the list.
And the favorable loan terms – which Pulido claims on his disclosure forms are unsecured and without any due dates – raise questions about whether the loans are actually gifts in disguise, according to good government expert Tracy Westen.
“In theory [no due date] means they never have to pay it back,” Westen said. “This looks more like a gift than a loan, frankly.”
There has been at least one inconsistency between what Pulido claims on his statement of economic interest, signed under penalty of perjury, and the understanding of one of his lenders.
Ray, who is a local developer and philanthropist, said he loaned Pulido $5,000 and fully expects the mayor to pay him back, “with interest,” by a specified due date delineated in a promissory note.
However, Pulido left blank the space on the disclosure form reserved for the loan’s due date. Nonetheless, Ray insists there is a due date, even though he can’t recall exactly when it is.
Yet, when pressed on the issue, Ray said he and Pulido are longtime friends and he wouldn’t hold the mayor to the due date.
“Friends do that kind of thing for friends,” Ray said.
The due date, or lack thereof, is important because of the Political Reform Act’s rules regarding personal loans and gifts. A personal loan essentially becomes a gift – and perhaps an illegal gift — if, among other things, the due date is passed without the loan being paid back and that person, even a close friend, has business before the council, or will in the future.
Tracking whether the loan has been paid off by the due date helps the public understand whether the loan is actually a gift. And if it is a gift, it could also violate the law’s $460 limit on receiving gifts from any one source.
Ray said he’d heard Pulido was borrowing money from others. But he was noticeably surprised when a reporter told him the names of all the people on the disclosure report.
“Wow,” he said.
Ray went on to say he didn’t know exactly why Pulido needed the money, other than he seemed to be struggling financially. Ray said Pulido has business interests outside City Hall, including a “variety of real estate activities” and “trade–type investments” in Mexico.
And before he made the loan to Pulido, Ray said he made sure the mayor could vote on issues related to the nonprofit Discovery Cube Orange County, a hands-on science-learning center for children. Ray was instrumental in bringing the center to Santa Ana, is a major donor, and sits on its board.
Ray said Pulido told him he had checked it out with Santa Ana City Attorney Sonia Carvalho and confirmed that the loan wouldn’t present Pulido with a legal conflict of interest regarding the center should it for any reason come before the City Council.
“I’m aware that there can’t be any monkey business,” Ray said.
Rodecker, owner of the Fountain Valley-based Orange County Mortgage, also said he didn’t know why Pulido was asking for the money. And like Ray, he said he was not aware at the time he made his loan that the mayor was borrowing money from quite a few others.
Rodecker loaned Pulido over $10,000, but less than $15,000, according to Rodecker and Pulido’s financial disclosure form. Rodecker refused to be more specific.
“It is kind of weird,” Rodecker said. “If he hadn’t been reelected mayor, it seems like the kind of thing you’d want to do if you plan on not being around… maybe he’s headed to the Caymans, who knows.”
Please contact Adam Elmahrek directly at [email protected] and follow him on Twitter: @adamelmahrek