Commentary: An ethical double standard on local tax and bond measures
https://www.elkgrovenews.net/2019/09/commentary-ethical-double-standard-on.html
By Dan Walters, CalMatters Columnist |
A
political scandal that erupted in San Diego 16 years ago indirectly established
a peculiar — and unseemly — ethical double standard regarding local ballot
measures.
Simply
put, while it may be legal for public officials to mislead the public in
seeking approval of bond and tax measures — which they often do — it’s illegal
to mislead bankers when those measures are implemented.
The San Diego case involved
a $500 million bond issue that city officials were marketing. A member of the
city’s pension board, Diann Shipione, questioned the veracity of the documents
that the city had prepared for would-be buyers of the bond, saying they
severely overstated the financial health of the city pension fund.
Officials
waged a vendetta against Shipione for her heresy and tried to dump her from the
pension board and even have her arrested.
However,
the federal Securities and Exchange Commission took up the case and charged
several city officials with fraud, including the city manager, saying they had
lied in the bond sale documents, and four of them were forced from office and
eventually paid fines. Mayor Dick Murphy also was forced to resign.
Since
then, countless local tax and bond measures have appeared on ballots, and the
campaigns for them have become increasingly misleading. Local officials hire
high-powered campaign firms to provide “information” that’s ill-disguised
advocacy and often obscures the measures’ true purpose to voters.
The
state’s Fair Political Practices Commission has occasionally intervened when
these “information” campaigns cross the line, but the practice continues
largely unabated.
Meanwhile,
the feds have reinforced the illegality of lying to bankers when officials
attempt to market bonds that voters have approved.
This
month, the
SEC struck again, charging that administrators of Montebello Unified School
District misled potential buyers of $100 million in school construction bonds
about financial and mismanagement problems.
Montebello
Unified Supt. Anthony Martinez agreed to a fine as part of a settlement and the
district’s former finance officer, Ruben Rojas, awaits trial on the civil
charges.
The case,
a smaller scale clone of what happened in San Diego many years earlier, puts
local officials on notice again about the perils of misleading bankers.
But what
about misleading voters?
Two years
ago, Assemblyman Jay Obernolte, a Republican from Big Bear Lake, carried — and
then-Gov. Jerry Brown signed — Assembly
Bill 195, compelling local officials to give more factual information to
voters. They would have to tell voters, in a bond or tax measure’s summary, how
much they would be paying and how long they would be shouldering the new
levies.
Local
officials hate Obernolte’s law, claiming that the required data takes up too
much of a summary limited to 75 words. However, what they really dislike is
that the financial facts crowd out rosy promises and might discourage voters
from approving their proposals.
Sen. Scott
Wiener, a San Francisco Democrat, rode to their rescue this year with
legislation, Senate
Bill 268, now awaiting Gov. Gavin Newsom’s signature or veto.
Wiener
makes no bones about his intent. He believes that Obernolte’s law would result
in fewer tax and bond measures being passed and his legislation would allow
officials to bury the required financial data in the fine print of voter guides,
where it would be much less likely to be read.
Thus,
officials would be free once again to pump up their one-sided pitches in ballot
summaries.
CalMatters
is a public interest journalism venture committed to explaining how
California’s state Capitol works and why it matters. For more stories by Dan
Walters, go to calmatters.org/commentary
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