Part two of a three-part series. Read part one and part three.
Peter Hardash’s job is vice chancellor of business operations for the Rancho Santiago Community College District, which makes him the gatekeeper of millions of taxpayer dollars that end up being spent on construction-related contracts.
But his passion is golf.
He plays multiple times a month, is a member in good standing of the United States Golf Association, and is chairman of the golf tournaments for all the other folks who have his job in college districts across the state.
Luckily for Hardash, his passion and his job often intersect. Companies that do business with the district have lavished nearly $3,500 in gifts, primarily golf-related, on Hardash over a span of two years. Meanwhile, they’ve reaped almost $12 million in contracts.
Oftentimes Hardash has submitted contracts to the district’s Board of Trustees within days of the vendors buying him rounds of golf, or, in one instance, just a week after offering him tickets to the Toshiba Classic golf tournament at the Newport Beach Country Club.
Here’s an example of how things often play out:
On a crisp May morning in 2014, Hardash teed off at the Windsor Golf Club, one of Northern California wine country’s well-regarded courses. He was playing in a tournament that he chaired for the spring conference of the Association of Chief Business Officials for community college districts in California.
A tournament flyer with a message from Hardash encouraged contractors to host their “favorite” public officials.
“Vendors: This is a great opportunity for you to invite and/or host your favorite [chief business official] or one you would like to meet,” Hardash’s flyer read.
The contractor who paid Hardash’s $65 entry fee was Yorba Linda-based Facilities Planning & Program Services, Inc., a firm that at the time was also bidding for a nearly $1 million facilities consulting contract with the district.
On May 16, 2014, just two days before Hardash was golfing at the Windsor, the contractor interviewed with employees from Hardash’s department as part of the competitive bidding process. And on May 15, a day before the interview, the contractor paid for another round of golf for Hardash, this one costing $150.
A few weeks later, Hardash would recommend Facilities Planning as the winning contract bidder to the district’s board of trustees.
None of the other 13 firms who submitted bids for the contract purchased gifts expensive enough to show up on Hardash’s statements of economic interest, the forms public officials are required to fill out disclosing sources of gifts above $50.
Hardash and other Rancho Santiago administrators declined to be interviewed for this article.
‘That’s A Lot of Gifts’
Hardash holds one of the most powerful positions in the district. He’s in charge of the district’s extensive facilities renovations, upgrades and the bonds that finance them. This includes the ill-fated Orange Education Center, a project that will cost Rancho Santiago millions of dollars to remodel because the district failed to have architectural plans cleared by the state architect.
Officials who have job titles similar to Hardash’s in the county’s other three community college districts have reported receiving gifts — but the amounts are not even close to what Hardash has received.
“That’s a lot of gifts,” said Bob Stern, co-author of the law, known as the Political Refrom Act, that requires gifts to be disclosed. “It’s obviously an attempt to at least curry favor, if not influence the employee.”
The records indicate the gifts served their purpose. A Voice of OC review of Rancho Santiago’s contracts found that firms doing business with the district and who also purchased gifts for Hardash have received at least 40 contracts and contract amendments in recent years.
For most of the contracts given to companies that gifted Hardash, there was no indication on staff reports that they were subjected to a competitive bidding process. The Facilities & Planning contract, which was extended this year and ballooned to $3 million, was a rare exception.
Another example of a contractor generous with Hardash was the architectural firm Westberg+White, Inc.
The firm gave $705 worth of gifts to Hardash, including meals and golf, in 2013 and 2014. During those same years, the firm was awarded 14 contracts worth nearly $4.3 million, sometimes within days of reported gifts to the vice chancellor.
Here’s a sampling of Westberg+White’s gifts to Hardash and how they timed with the awarded contracts, according to district records:
- On May 7, 2014 — just seven days after Westberg+White spent $150 on a day of golf for Hardash — he submitted a $39,500 contract for the firm to the board of trustees. On June 9, he submitted contract change orders on various Westberg projects worth over $443,000.
- On Oct. 28, 2013 — three weeks after Westberg+White spent $150 on golf for Hardash — he submitted a boiler replacement contract for the firm worth $35,000.
- On April 15, 2013 — one month after Westberg+White purchased $180 in tournament tickets for Hardash — he submitted two contracts to the board worth a combined $165,300.
Hardash doesn’t have to disclose gifts taken in 2015 until April next year, so it’s not yet known if his pattern of gift taking extends to this year. But emails obtained by Voice of OC under the state’s Public Records Act indicate he’s not slowing down.
“Is our golf foursome ready for another day on the course?” Westberg+White principal Paul Westberg wrote in an email to Hardash confirming a golf outing May 4 at the Mission Viejo Country Club. “If so, I will send in the application and fees for the event.”
On June 15, Hardash submitted a $50,000 contract increase to the board for a Westberg architectural and engineering services contract, taking the total up to $4.1 million.
In another email Westberg sent Sept. 3, the businessman offered Hardash tickets to the Toshiba Classic golf tournament in Newport Beach.
On Sept. 14, Hardash submitted to the board another $29,500 change order on the same Westberg contract.
The golf trips are just part of a lavish lifestyle Hardash has enjoyed largely thanks to taxpayers who fund the district, which serves Orange County’s poorest population. The district’s largest city, Santa Ana, has a poverty rate higher than the state average, and, with over 30 percent of its 330,000 residents under 18-years-old, it is one of the youngest cities in the nation.
But these realities haven’t stopped Hardash and other high-level district officials from traveling well on the taxpayer’s dime. Consider that after playing in the tournament at the Windsor, Hardash and other attendees of the conference for chief business officials stayed three nights at the Hyatt Vineyard Creek Hotel & Spa in Santa Rosa.
Among the sessions at the conference was one focused on ethics for chief business officials.
Should Public Agencies Ban Gifts?
Until 2013, Hardash was not disclosing his gifts and therefore violating the California Political Reform Act’s disclosure rules.
At that time, the state’s Fair Political Practices Commission (FPPC) fined him $200 for not disclosing $145 in meals and rounds of golf he received from the bond underwriting firm De La Rosa & Co in 2011. The district had paid tens of thousands of dollars to the firm after it purchased gifts for Hardash.
Stern said the district should have reigned Hardash in at that point and passed a gift ban. But that didn’t happen.
Instead, starting last year, thousands of dollars in gifts started appearing on Hardash’s disclosure forms, indicating that there were probably many other gifts in the past Hardash never disclosed.
But the FPPC didn’t follow up to investigate whether Hardash had failed to disclose other gifts prior to the fine, a fact that Stern said “surprised” him.
There’s disagreement among government ethics experts over whether public agencies should ban gifts altogether, or just place stricter limits on them. Either way, most agree that gifts to public officials can raise suspicions of pay-to-play schemes.
Under state law, public officials can accept up to $460 in gifts annually from a single source. However, as Hardash has proven, if an official stays below the limit when it comes to individual givers, he or she can legally reap thousands of dollars in gifts each year.
Stern is in the camp that believes gifts from businesses looking for work with public agencies should be banned. He’s also co-authored a possible initiative for the 2016 November ballot that would lower the gift limit for every public official to $200.
“Why are people giving? Are they giving before people are bidding on the contracts? Did they have a relationship before? The answer is no,” Stern said.
Jessica Levinson, president of the Los Angeles Ethics Commission, agreed that Hardash had taken an unusually large amount in gifts from district contractors. She recommended that public agencies adopt a gift limit that sets a lower limit – she suggested $50 — but doesn’t ban them outright.
“I would hate to punish behavior like, ‘let me grab this coffee for you,’” Levinson said.
Yet she also saw the need to limit the excesses of someone like Hardash. “The fact that this is an outlier situation, it shows something should be changed,” she said.
There are several examples of public agencies in Orange County that have banned gifts out right. Among them are Santa Ana, the largest city served by Rancho Santiago; and the South Orange County Community College District.
Debra Fitzsimons, vice chancellor of business services at the South County district, has a job that corresponds to Hardash’s position at Rancho Santiago. Her statements of economic interest show she hasn’t taken a single gift from any South County district contractor.
“Why would you want to have your public organization be one that would accept gifts from vendors?” Fitzsimons said, adding that taking gifts raises conflict of interest questions.
Fitzsimons is a strong advocate for a no gift policy. “It keeps it very clean and neat by having a no gift policy. It really does,” she said. “I don’t see any public benefit in allowing employees to accept gifts.”
Board trustees who agreed to be interviewed for this article were alarmed enough to say they would be addressing the issue.
Trustee Jose Solorio said he would be asking the board to review policies at other districts, including a gift ban.
“One option we should look at is a no gift policy similar to the other one at South Orange County Community College District,” Solorio said.
Trustee John Hanna said he wouldn’t criticize a district employee because of rules that prevent him from doing so, but he said if there’s a situation that looks inappropriate, he would bring up policy to fix it.
“If there are activities that create an ethical problem, or an appearance of an ethical problem, I intend to do something about it from the policy end,” Hanna said.
Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: @adamelmahrek