The battle between Huntington Beach City Council members and their elected city attorney heated up again this week, with the release of two separate reports that paint different pictures. 

The city commissioned report says Huntington Beach’s city attorney may have violated the city’s conflict of interest ethics in an employee lawsuit that ultimately cost taxpayers $1.5 million according to a new report from an outside investigator.

But a report commissioned by City Attorney Michael Gates says differently, finding no conflict of interest issues in the lawsuit.  

The case started when Neal Moore and Scott Field, both former employees of the city attorney’s office, claimed they were forced out by age discrimination from Gates, a suit that ultimately ended with a $2.5 million settlement between the two and no independent investigation as to whether the claims were true. 

In addition to the settlement costs, which were paid for by the city’s insurer, the city spent over $1.5 million fighting the case in court over nearly two years. 

Gates denied accusations of age discrimination and said he recused himself from the case. 

But Huntington Beach City Council members disagreed with his characterization of the recusal in a report analyzing how the case was handled that was released this week. 

“Councilmembers recalled that he participated actively in every closed session, and none remembered him making a distinction between his City Attorney role and his individual defendant role,” the investigator wrote. 

To read a copy of the city’s report, click here

The report was created by Craig Steele of the Richards, Watson and Gershon law firm, who currently serves as city attorney in Monrovia. 

In his report, Steele said that Gates’ handling of the issue was improper, opening up multiple questions on how involved he was in the case since he continued to brief council members on what actions to take and advise them. 

“Although the City Attorney has said he ‘abstained’ from the litigation as City Attorney, he participated directly in ways … that blurred the important line between his personal interests as an individual defendant in a lawsuit and the City’s interests as its chief legal officer,” Steele wrote. 

Gates is the only elected city attorney in Orange County, and has been on the dais since his election in 2014, serving as the city’s chief legal counsel responsible for both defending the city from litigation and advocating for the city in court. 

Steele recommended making changes to the city charter that would clearly define the boundaries of Gates’ power and the council’s authority, including their power to bring in outside attorneys. 

“The City Charter is confusing and incomplete on these issues,” Steele wrote. “The confusion, lack of clarity regarding roles, and evident distrust between members of the City Council, staff, and the City Attorney warrants a significant revision of the City’s Charter and policies.” 

However, Steele was also clear that Gates’ work on the case didn’t break any laws. 

“I did not find evidence of any violation of the law by the City Attorney” Steele wrote. “Still, the intent of the conflict of interest laws is always to eliminate not just actual impropriety, but also the appearance of a conflict of interest or temptation.” 

Gates called the report itself a violation of the city charter in a phone interview and at Tuesday night’s city council meeting – claiming it was unreliable and that the city council didn’t have the power to hire an attorney to review his work. 

Gates has also threatened the city with a lawsuit for allegedly violating the Brown Act for meeting with Steele behind closed doors to discuss his report without Gates’ present.  

“Mr. Steele never interviewed me … he never interviewed the trial attorneys,” Gates said during Tuesday’s city council meeting. “He was hired to conduct an investigation but didn’t interview any of the critical elements who could speak on whether it was handled or done properly. The process was flawed from the beginning.” 

Gates also criticized Steele’s connections to Councilman Dan Kalmick and former city manager Oliver Chi, who hired Steele to complete the report after they worked together in the city of Monrovia, and questioned why he was never interviewed for it. 

“When an advocate is writing a report like this, the findings are not reliable,” Gates said in a Wednesday phone interview. “I’m open to criticism at any time, but it has to be well founded, reliable criticism. It can’t be made up without proper investigation.” 

Kalmick denied any preexisting relationship with Steele, pointing out how Chi’s previous work with Steele was noted in the report but that it didn’t have any bearing on the case. 

“I think Mr. Gates is trying to muddy the waters based on a well researched and thoughtful investigation into a case, which is what we asked for,” Kalmick said in an interview with Voice of OC. “This is not a witch hunt into Mr. Gates, this is about the guidelines and regulations that govern how our attorney’s office operates, and our report states we’re lacking guard rails in that office.”

In the report, Steele said he chose not to speak to anyone from the city attorney’s office because he didn’t want to cause “potential conflict in the office,” and said his review of existing records was all that was needed. 

Gates also produced his own report, bringing in Calvin House, an attorney from the Gutierrez, Preciado and House law firm that said Gates created no conflicts of interest in his role in the case. 

To read a copy of the report created by House, click here

Gates and the city council majority have frequently clashed over the past two years. 

While council members initially discussed replacing Gates altogether with an appointed city attorney, a move that voters would have to approve on the ballot, they ultimately decided not to go that route after fierce pushback from public commenters at multiple city council meetings. 

Councilman Erik Peterson also protested the city’s decision to release the report, saying everything that was done on the case was approved by the council.

“Every decision made in this, whether we gave more money or the strategy, had nothing to do with Mr. Gates,” Peterson said at Tuesday’s meeting. “We spent all this money to get a report on a case that the council for a couple years voted yes every step of the way.”  

But the rest of the council stood behind their decision to release the report Tuesday night.

“Our residents deserve full transparency, to see exactly what happened and why we are here today. This is not personal,” Councilwoman Kim Carr told Gates at Tuesday’s meeting, offering him 30 minutes to look over the report before its release.

Councilwoman Rhonda Bolton also spoke in favor of releasing the report and urged people to read it.

“It was a tough decision for me to decide to want to waive the attorney client privilege and release this report. But a lot of folks came forward and said, ‘Why are you recommending a charter amendment that more carefully defined the attorney-client relationship?’ And this is the reason why,” Bolton said.

While Gates was cleared of any potential lawbreaking, one of his subordinates, Brian Williams, may have violated conflict of interest laws by leading the effort to retain the Greenberg Gross law firm for the case then went to work for them in January 2021. 

Steele said he referred the issue to the California Fair Political Practices Commission for further investigation. 

Hosam Elattar contributed to this article.

Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a Groundtruth initiative. Contact him at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.

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