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Diary #7 in an ongoing series of my experiences as a candidate.

It’s been over a month since my last diary on this topic. The reason is simple, the explanation is complicated. Bear with me as I try to accurately and fairly describe what has happened, the reasons, and the results, and the surprise twist at the end. This isn’t over yet.

I work for a Wall Street firm as a financial advisor. That is, I manage the investments of individuals, families and small businesses. It’s a great job that I love and feel that I’m very good at it. As you may know, financial firms are heavily regulated. When an employee such as myself extends themselves into community roles (e.g. board members of non-profits, commissioners, council members, etc), the firm has to approve of that employee’s “outside business interest” or OBI for short. Without the OBI approval, the employee is in violation of either firm or regulatory processes and can be disciplined or worse, terminated. Even becoming a candidate for City Council required an OBI…which my firm provided.

After I became a candidate, my firm’s compliance department (a lawyer) mailed a form to the Mountain View City Attorney asking her to sign and return it. It was a short letter essentially asking for assurance that in the event I’m elected, the firm would not be prevented from doing business with the City. Without that signature, the firm would not approve of my OBI as a council member. In other words, I could run for City Council, but should I be elected, I could not take the seat.

And this is where it gets complicated.

California has some of the most strict conflict of interest rules on the books of any of the 50 states. When the City Council is deciding on a matter that may be a conflict of interest, they go to the state’s Fair Political Practices Commission (FPPC) for a ruling/judgment/opinion.  For example, let’s say the City is interested in construction of a new building near the business of one of the sitting council members. The City Attorney would reach out to the FPPC for advice on what to do with the council member. Should the member recuse themselves, should they be removed from the discussion, etc. In the case of my firm and the City, the issue really involves contracts. Can the City enter a contract with my firm if one of their employees is on council? For this event, again, the City Attorney would contact the FPPC for an opinion.

Let me stop here for a moment to introduce to you FPPC rule 1090. It’s a conflict of interest rule that essentially says the following: If you are an employee of a company and that company does business with a municipality, it may be perceived that the employee/council member profited from the transaction, even if the employee/council member was not involved in any of the decision making process and even if the employee/council member saw no direct economic benefit (bonus, commission, extra pay, etc) as a result of the transaction. Because of this, the City Attorney would ALWAYS contact the FPPC ahead of any decision process and see what should be done to protect themselves and the council member. Have I mentioned that the penalty for violation of rule 1090 is jail? Yeah, jail.

You may see where this is headed. The City Attorney in no way could sign a document assuring my firm that should I be elected, business could still be conducted because it’s not the City’s decision. The FPPC may come back with something like, “Yeah, but he has to recuse himself” in which case, the firm MAY win the business.  Or “No, he will be in violation of rule 1090. Do not enter the contract negotiations with that firm.” Or something in between.

Because the City Attorney could not offer assurances that business can still be conducted, the firm decided this past week that they will be unable to sign the OBI for me to take a seat should I be elected. I will have to withdraw from the campaign.

Naturally, this is not a result for which I was hoping. If my firm decided to simply not compete for business from the city for the next four years, this issue goes away. I have asked, but have not been provided, with any data on how much business they have done together. No one seems to know. The big opportunity would be winning the right to underwrite the next municipal bond issue. I can’t remember the last time our city issued bonds. I don’t think they have any plans to do so in the near future. Nonetheless, this is where I’m at.

And here is the twist.
Yesterday I had to tell some of my supporters that I will have to withdraw from the race. Naturally, they were shocked and demanded to know why. Trying to be as diplomatic (and truthful) as possible, I simply replied, “My firm and the City were unable to resolve potential conflict of interest situations to either parties satisfaction and therefore I will not have the authorization to take a seat on the council should I be elected.” Clearly, it would be very embarrassing if I won a seat but had to forfeit it. It’s a good thing we’re doing this due diligence months before the November election! Nobody was happy with what I was saying. But I didn’t have the opportunity (or even the mind) to expand on the situation. I left it at that.

This morning I received a phone call from one of the women/supporters/endorsers that I spoke with yesterday relaying to me that she has spoken “to some in the business community” and they are trying to figure out a way to resolve this – or even if it’s resolvable. From what she told me, the business community wants me on council. That doesn’t really surprise me given a) the other candidates who are running, b) my position as a local business leader, and c) the nature of the urgent problems that Mountain View is currently grappling with and the likelihood of an insurgent anti-involvement field of candidates that would be bad for local business. Disclosure: I’m the Chair of the Board of the Mountain View Chamber of Commerce (among other prominent local positions I hold or held). You can see my background at the link at the bottom of this diary.

Since I’m not involved with what they are doing, I have no idea what will happen or which form any action will take. At this moment, I’m expecting to withdraw from the race. But this local group is organizing on my behalf and it’s comprised of some important people. I am flattered that people think highly enough of me/my candidacy to do this. It may be possible that they’ll convince my company that me not running is good for them and bad for Mountain View. Maybe that will move the needle.

Stay tuned.

My website:

Originally posted to BayAreaKen on Fri Apr 18, 2014 at 11:33 AM PDT.

Also republished by California politics and Silicon Valley Kos.

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