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Councilwoman fends off criticism over 'finder's fees'

Original post made on Jun 13, 2014

Palo Alto City Councilwoman Karen Holman, who has spent more than a decade advocating for more transparency in city government, found herself fending off criticism this week for failing to disclose funding she had received from a real-estate company that proposed to rezone an Arastradero Road site to accommodate more housing.

Read the full story here Web Link posted Friday, June 13, 2014, 12:00 AM

Comments (23)

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Posted by Karen should resign
a resident of Greenmeadow
on Jun 13, 2014 at 6:06 am

Even when the Weekly does an article on this matter,it is one-sided and clearly pro-Holman.
"This prompted questions and innuendos from her colleagues, who wondered why she didn't similarly recuse herself from prior discussion of Pierce's workforce-housing concept. "
What questions and what innuendo from which councilmembers? If the Weekly is going to make such a far reaching statement, present the names and what was said.
ANd of course, that is the crux of the matter--why did she recuse her self that time and not the others.

"On her Form 700, she lists her payments from the firm in the $10,001-$100,000 range and describes her business position as "consultant." "
For which year. According to reports in another local paper, she claimed that amount on her form for 2012 and 2013. But then, according to the other local paper, she now says she received nothing in 2013. Doesn't that set off some alarm bells for the Weekly? Did she make a false statement in her 2013 form? Shouldn't the Weekly look into that?

"Holman also suggested that the pushback she has experienced from her colleagues may be motivated by politics."
Poor Karen. Nice try to divert attention. Perhaps the weekly should ask Karen which colleagues she is referring to.

Given the feelings regarding developers and the council this issue is a major one--a so-called "residentialist" council member getting money from a developer. Not to be swept under the rug like the Weekly and Karen would like


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Posted by Scharff is playing dirty politics
a resident of Greenmeadow
on Jun 13, 2014 at 6:37 am

The real story here is that Greg Scharff and Nancy Shepherd are running scared in the November election, and trying to tear down Karen Holman so that they aren't booted off the council by Holman and new residentialist candidates. Karen is likely to be the highest vote-getter, and Scharff and Shepherd are vulnerable to losing their seats or facing a new majority. Shepherd in particular is vulnerable because of the generally low public perception of her ability and intelligence. Scharff's mayoral term left him with few friends on the council and a general dislike of his heavy-handed style of leadership.

The idea that suggesting that a site be included for potential housing in the Housing Element of the comprehensive plan creates a conflict of interest is silly. There is no zoning action associated with that move. Whether the idea of workforce housing makes sense is a separate idea. I doubt it outside of a large corporate campus.

The use of the word "contributed" to describe consulting fees paid to Holman is an odd and sloppy choice of words, and Gennady should correct it. In a political context, "contributed" usually refers to campaign contributions. I had to read the sentence twice to understand that these aren't campaign contributions. How about "paid"?


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Posted by Holman should resign
a resident of Greenmeadow
on Jun 13, 2014 at 6:50 am

Scharff is playing dirty politics--
no the real story is Holman taking money from a developer.

" Greg Scharff and Nancy Shepherd are running scared in the November election, and trying to tear down Karen Holman"
Proof for this claim, please.

"Shepherd in particular is vulnerable because of the generally low public perception of her ability and intelligence."
Proof, please. Polling results etc>

"Scharff's mayoral term left him with few friends on the council and a general dislike of his heavy-handed style of leadership."
Once again, proof please.

Seems like you are trying to tear down Sheppard and scharff, probably due to the fact that you are worried about Holman's chances in the fall.

"The idea that suggesting that a site be included for potential housing in the Housing Element of the comprehensive plan creates a conflict of interest is silly."
When that site is to be developed by a person you are taking money from , then it is not silly. And if there was no conflict, why did holman recuse herself later???


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Posted by Thanks Weekly!
a resident of Adobe-Meadows
on Jun 13, 2014 at 7:13 am

This story is sloppy and sensationalistic. In the lede it says Holman is under criticism because of "failing to disclose funding" When I searched the story for what she failed to disclose, I found that the story states that she actually DID disclose the funding and "lists the firm on her statement of economic interests (also known as Form 700)"

What it appears she didn't do is recuse herself. She maintains she has no conflict. Scharff says she does. However, Scharff and Shephard have a motive to throw some mud on her -- they are under attack from the Measure D aftermath themselves and perhaps they are throwing Holman into the volcano to appease an angry God.

It's unfortunate that the Weekly, after having created the Measure D mess with its ridiculous editorial misleading the public into thinking that it could vote No and still have public housing there, would now sensationalize the aftermath like this with slanted coverage. If Holman made a mistake, she certainly wasn't the only one.

Anyway, she can sue you for defamation for publishing that she failed to disclose the funding when you report right in your own story that she did.


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Posted by Scharff is playing dirty politics
a resident of Greenmeadow
on Jun 13, 2014 at 7:41 am

@Holman...

You want proof for the idea that people think that Shepherd lacks the ability and intelligence to be a good council member? Or that Scharff alienated people by acting as if the ceremonial role of Mayor was equivalent to King-for-life? Otherwise I can't say it? It's my opinion, based on talking to people around the city and reading the press. If you have a different opinion, offer it.

According to the article, Holman recused herself after Scharff told her that he thought she had a conflict after the May meeting, and she decided to avoid even the appearance of a conflict. So here's the interesting question: why is Scharff keeping the issue alive?


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Posted by wmartin46
a resident of Fairmeadow
on Jun 13, 2014 at 8:59 am

wmartin46 is a registered user.

> Palo Alto City Councilwoman Karen Holman, who
> has spent more than a decade advocating for
> more transparency in city government

Really—what evidence is there for this advocacy? How many problems with Palo Alto City government has she identified, and fixed? She may think she believes in transparency in government—but it's hard to find evidence where she has actually dome something about the transparency problems with Palo Alto, much less the State and Federal government.

> Holman's financial ties to Pierce first came to public light June 4

This is not true. Holman had identified this relationship previously in her Form 700s. Sadly, no one in the public, or the media, seems to have taken the time to read these forms and ask her questions about this relationship.

> Vice Mayor Liz Kniss asked City Attorney Molly Stump to confirm
> that her office doesn't actually decide whether council members
> should recuse themselves.

This is true. If a conflict is believed to exist, a complaint must be filed with the FPPC, which will resolve the matter. Anyone can file such a complaint.

When the Post asked Holman how much money she had received from Pierce's firm she said: "I can't remember." While she has not been fully "transparent" in revealing her take from all this "consulting"—at least she has managed to provide the public with a little more information than she gave the Post.

By now, Holman should have consulted an attorney who specializes in such matters. Holman seemed over her head when she first ran for office, and has been floundering ever since. She doesn't seem to understand what "transparency" really means, after four years on the Council—so it's hard to believe that she will ever learn.


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Posted by Craig Laughton
a resident of College Terrace
on Jun 13, 2014 at 9:51 am

Craig Laughton is a registered user.

The following are attributed to Karen Holman, from the original Weekly article (above):

>"workforce housing"

>"I was looking at this as a consideration that had to do with the Housing Element and a planning concept that I found intriguing,"

>She said she was interested in the sites' "proximity to employers" and wondered how the city can "provide synergy" between employers and housing.

>She said she was interested in the "company town" concept

Such a concept REQUIRES a database for the jobs/tenants/owners. Can't be done without it. Is Karen Holman now supporting a database to determine who works where, when they are part of PA "affordable housing"? She has resisted such a concept, to this point. Why?

Perhaps because such a database will prove that subsidized housing in PA is NOT being used for essential jobs (police/fire/teachers, etc.), as was originally promised...it is just housing...for whoever gets on the list first.

Always lurking under the surface is the alarmism of global warming, which is a convenient cover for political power (statist design)in a liberal town like PA.


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Posted by Donya
a resident of Barron Park
on Jun 13, 2014 at 10:34 am

Donya is a registered user.

Can someone explain what "finder's fees" are? Is Karen Holman a real estate agent or something like that?

I thought that we have been having a sellers market in Silicon Valley the last few years so I find it very puzzling that a developer would need Karen Holman to find buyers. How does Ms. Holman find all these buyers if she is not an agent?

That Ms. Holman does not see her behavior as unethical (even if not illegal) is shocking and bad news. That she says this is all about politics makes me wonder about her judgement. And I wonder where else has she been doing things that are fine in her judgement but are unethical.


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Posted by tomjordan
a resident of Old Palo Alto
on Jun 13, 2014 at 11:50 am

tomjordan is a registered user.

This is truly a hatchet job pushed by the Post. Is it not clear that for the past two weeks the Post has pushed this with two front page lead headlines and a page 12 item, while the other two newspapers in town, the Daily News and the Weekly, have not, until now, even mentioned it. What could show more clearly that the Post has its own agenda and that this is not even a newsworthy item. But the Post owns a printing press and it is pushing this for reasons that should be obvious.
A fair reading of the Post's own articles shows: 1) the County District Attorney when presented with this, presumably by the Post, said he saw no improper conflict, but the Post put that on page 12 as a small item with a misleading headline that indicated worse for Holman, 2) Should not this alone, for the County DA is one of the people charged with enforcing that law, have ended the matter, but the Post pressed on in the news portion of its paper and in doing so showed further to those who both read and think that the Post has a motive here which is outrageous in one claiming to be a professional journalist.
An important point not mentioned is that Pierce had no application for anything filed with the City. I repeat there was no vote even agendized on any application. The discussion involved possibilities for housing in the area. Holman made comments but no motion for anything, and even if she had it would have been to have staff study the possibilities for a concept. No application;no vote, no conflict.
Curious that the Weekly article now ignores several of these points. Does not discuss them and dispose of them; ignores them. Not a very good job of reviewing what has taken place. This article fails completely to explain that when the City Attorney is asked by the reporter "whether she found anything improper in Holman's participation" and "she declined to comment" that the comment carries zero implication of wrongdoing. Repeat Zero. The Council members are her clients and that is exactly what every attorney is ethically required to say when asked to disclose anything about a client. Yet the reporter puts it in implying that it is a negative for Holman. Not fair.
In this election the Establishment will lose the majority and Kniss will not be the Mayor. They are resorting to foul tactics, as they did in 1967, to try to prevent what is coming. The Post has no choice but to continue what it started. This is an opportunity for the Weekly and the Daily News to fulfill their role as true newspapers, and will be a test of whether PA is decent, thinking community. The Weekly can do better than this.


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Posted by Craig Laughton
a resident of College Terrace
on Jun 13, 2014 at 12:12 pm

Craig Laughton is a registered user.

>The concept, which would yield about 57 housing units, was pitched by Steve Pierce, who works as an attorney at local real-estate firm Zane MacGregor, which has contributed tens of thousands of dollars to Holman in consulting fees over the past decade and a half. Pierce owns one of the four parcels in question. (from the original Weekly article)

>An important point not mentioned is that Pierce had no application for anything filed with the City. I repeat there was no vote even agendized on any application. The discussion involved possibilities for housing in the area. Holman made comments but no motion for anything, and even if she had it would have been to have staff study the possibilities for a concept. No application;no vote, no conflict. (from the post above by "tomjordan")

If I owned a property in a proposed "housing element", and I wanted to make a lot of money, I would pitch for any concept that could possibly satisfy a local councilperson, and a change in zoning that would allow it. Of course, I would not pitch the specific project I had in mind, because that would require a zoning change first. Karen Holman, who was on the payroll, was very receptive to a potential zoning change, apparently.

I don't think this passes the smell test....


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Posted by Jerry Underdal
a resident of Barron Park
on Jun 13, 2014 at 12:18 pm

Jerry Underdal is a registered user.

Council member Karen Holman was originally called out on the Arastradero matter, not by fellow council member Greg Scharff but by the Daily Post.

May I suggest a different way of looking at what's happening? I believe that Karen Holman is paying the price for not being sufficiently deferential to the forces that drove the Maybell Revolt. She has had a reputation, now being picked away at, for opposing the kind of overdevelopment and abuse of zoning loopholes that most Palo Alto residents have been upset about.

But she voted with every other member on the council to defend the CC's decision to approve PAHC's housing project for low-income seniors on Maybell because she recognized that this was a wise use of planned community zoning changes for a public benefit.

So did Council Member Greg Schmid, also regarded until now as a stern watchdog looking for zoning abuses, ready to protect South Palo Alto from being taken advantage of as Palo Alto changes. He is not on the ballot this year, but if he were I think he would be assailed by property rights activists for his vote on Maybell.

The Maybell campaign had taking control of the city council as its goal from the start . Karen Holman and Greg Schmid stood out as council foes of PC zoning excesses, but to true believers in the battle against Plan Bay Area they're just part of an old order that must be swept away to save suburbia from the new urbanism.

The voices calling for Palo Alto to "toss the rascals out" are part of a movement that sees the successful Measure D referendum vote as just a foretaste of what can be done by an aroused electorate.

Lots of speculation in this post. If you've got a sunnier take on what's happening I hope you'll share it.


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Posted by wmartin46
a resident of Fairmeadow
on Jun 13, 2014 at 12:21 pm

wmartin46 is a registered user.

> The Council members are her clients and that
> is exactly what every attorney is ethically required
> to say when asked to disclose anything about a client.

The City Attorney works for the Council, not the members of the Council. If a Council member is charged with a crime (which is not unheard of in this country), the City Attorney is not obligated to defend that individual based on his/her being a member of the Council.

> At the June 8 council meeting, she said she lists
> the firm on her form "regularly," whether or not
> she has income from the source.

Aren't the Form 700s supposed to be submitted by covered officials under the penalty of perjury? So why would someone who understands the English language indicate a source of funds when no funds were, in fact, received?

> But the Post owns a printing press and it is pushing this
> for reasons that should be obvious.

Why not finish this thought, and offer up some explanation to the Post's pursuing this matter?


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Posted by midtown anon
a resident of Midtown
on Jun 13, 2014 at 1:03 pm

midtown anon is a registered user.

Another question is consider is if the federal law known as RESPA was violated. This federal law prohibits finder/referral fees from a real estate agent to a person without a real estate license in sales of residential properties where a federally insured mortgage is involved.

Here is the weblink explaining more: Web Link


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Posted by Jerry Underdal
a resident of Barron Park
on Jun 13, 2014 at 1:43 pm

Jerry Underdal is a registered user.

Or if what I've suggested is, by your lights, already a sunny prospect--that is, the land use rebellion called for by various groups like the Conservative Forum and Citizen's Alliance for Property Rights is finally hitting the famously liberal Peninsula, with its support for affordable housing, smart growth, green energy, open space and the like--please explain why.


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Posted by Craig Laughton
a resident of College Terrace
on Jun 13, 2014 at 2:15 pm

Craig Laughton is a registered user.

>Or if what I've suggested is, by your lights, already a sunny prospect--that is, the land use rebellion called for by various groups like the Conservative Forum and Citizen's Alliance for Property Rights is finally hitting the famously liberal Peninsula, with its support for affordable housing, smart growth, green energy, open space and the like--please explain why.

Jerry,

I think a better set of questions would be: Why are we destroying private property rights and property values by government edicts? Why are we supporting welfare housing, without a secret vote in each neighborhood that is threatened with it? Why does green energy not include nuclear energy? If we want open spaces (as I do), why not pay the market rate to buy them, and preserve them? The infamously liberal Peninsula wants to take from others (usually not from themselves), to protect their own ideology. Please explain why.


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Posted by Curmudgeon
a resident of Downtown North
on Jun 13, 2014 at 2:56 pm

Curmudgeon is a registered user.

"This is truly a hatchet job pushed by the Post."

Yes, by the same editor who pushed a vicious libel campaign against Councilwoman Nancy Lytle (funny how he likes to pick on females, huh?) a decade ago when she was up for re-election after opposing 800 High and other egregious over-developments by powerful, connected individuals.

Anyone else smell a Bear?


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Posted by wmartin46
a resident of Fairmeadow
on Jun 13, 2014 at 3:33 pm

wmartin46 is a registered user.

> Yes, by the same editor who pushed a vicious
> libel campaign against Councilwoman Nancy Lytle

The Post was not the only paper focusing on Nancy Lytle, at the time—

On Deadline: The elephant in the council chambers...
Web Link

Anyone close enough has observed -- or been affected by -- the situation in which Councilwoman Nancy Lytle and the other eight council members are engaged in a personal/political dance of some type. The "council system" becomes most visible over issues such as use of school properties for non-school uses; almost any planning matter that relates to the city's new Comprehensive Plan; and items involving Stanford University, among others. (It is not the same as an 8-to-1 vote split, which doesn't happen all that often.)

The issue with other council members seems to be not just that Lytle has her own agenda (which is OK) but that she insists the council follow it -- even if it means making an end-run around the council, as in the recent killing of an intergenerational center at the former Ventura School.


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Posted by Curmudgeon
a resident of Downtown North
on Jun 13, 2014 at 3:42 pm

Curmudgeon is a registered user.

"The Post was not the only paper focusing on Nancy Lytle, at the time—"

Yup. Vintage stuff alright. Both papers got (and get) the bulk their revenues from real estate advertising. Like Holman, Lytle was on the wrong side of their sugar daddies. She had to go.

And it got kinky weird: one of here male enemies on the council accused her of "walking on their faces." What an image.

Deja vu, anyone?



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Posted by Jerry Underdal
a resident of Barron Park
on Jun 13, 2014 at 10:21 pm

Jerry Underdal is a registered user.

@Craig

Thanks for responding. Your questions point to important areas of disagreement between our positions and I'll make a few comments in reply. But I hope in return you'll help me understand the broader significance of the upcoming city council election from your point of view.

"Why are we destroying private property rights and property values by government edicts?" I'm sure you have examples in mind, but I don't think the primary thrust of government actions in this city is to destroy private property rights and property values. A look at Zillow, Trulia or Redfin estimates of market value should reassure folks worried about that.

"Why are we supporting welfare (affordable? subsidized?) housing, without a secret vote in each neighborhood that is threatened with it?" There are a lot of reasons for this support, for myself it's from a belief that a healthy community is one whose households represent a wide range of economic circumstances, all supported in pursuing meaningful goals.

"Why does green energy not include nuclear energy?" For more and more people it does. I remember how surprised I was about five years ago to hear a prominent environmentalist make the case that nuclear power generation must be at least part of the transformation away from carbon fuels.

"If we want open spaces (as I do), why not pay the market rate to buy them, and preserve them?" I'm not sure whether you're talking generally about Open space acquisitions here on the Peninsula or other programs. Typically long-term negotiations have produced purchase agreements that all parties agree to.

"The infamously liberal Peninsula wants to take from others (usually not from themselves), to protect their own ideology." Protecting one's ideology may be an underlying psychological mechanism of people generally, but I question whether liberals or conservatives/libertarians would recognize it as the motivation behind their policy prescriptions.

Now, about this election. Am I roughly right about what's going on?






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Posted by Craig Laughton
a resident of College Terrace
on Jun 14, 2014 at 9:18 am

Craig Laughton is a registered user.

>Now, about this election. Am I roughly right about what's going on?

Jerry, I am not sure about your analysis.

>the land use rebellion called for by various groups like the Conservative Forum and Citizen's Alliance for Property Rights is finally hitting the famously liberal Peninsula, with its support for affordable housing, smart growth, green energy, open space and the like (your words).

I think the next election is largely about pace, and ultimate consequences. The rush to development is off-putting to many people, especially around issues like traffic, density (e.g. stack and pack), pressure on traditional neighborhoods, overflowing schools, lack of trust/respect in the CC, etc.

Just speaking for myself, I am pro-growth, as long as it makes sense and it can be mediated to control consequences (e.g. commuter buses/satellite parking lots...glad to see that one getting some serious consideration). However, the neighborhoods need protection. Cut through traffic and saturation parking need to be controlled...only CT has (largely) achieved this goal, thus far...I fully hope that other neighborhoods will follow...in fact, I think a city-wide RPPP should be instituted (tailored to each neighborhood). I think subsidized (welfare) housing is bad for PA...it obliterates the tax base on those properties, and it does not respond to the inherent PA need...all neighborhoods should be allowed to vote on such major projects.

When you mock property rights, Jerry, I think you lose many people to your way of thinking. There are discordant characteristics among voters in PA, for example many pro-property rights voters also support open space spending (but not public taking). There are many limo-libs who support welfare housing in the non-elite neighborhoods, but not their own. Anaerobic digestion industrial plant on our dedicated park lands...depends on which environmentalist group you support. Support for labor unions...ask why Gail Price is leaving. I could go on, but I would summarize with:

Pace of change (and consequences) and trust/respect will be central to the upcoming election.

Does that answer your question, Jerry?


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Posted by Jerry Underdal
a resident of Barron Park
on Jun 14, 2014 at 2:25 pm

Jerry Underdal is a registered user.

"Pace of change (and consequences) and trust/respect will be central to the upcoming election.

Does that answer your question, Jerry?"


Craig,

Yes, it's very helpful. Thanks for posting it.

About property rights: I don't mock them. They are central to the experience of being an American and I prize them greatly. Living abroad as a volunteer in Africa and Asia, I saw too many instances of powerlessness in the face of demands by corrupt governments or unscrupulous individuals and businesses to take them lightly. But I'm uneasy with an overemphasis on property rights because there's always the challenge of what to do when rights and responsibilities collide.

Should be an interesting election.


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Posted by paloaltonative
a resident of College Terrace
on Jun 15, 2014 at 11:42 am

paloaltonative is a registered user.

No work force code changes for more dense housing! Sorry mr pierce, I recommend U sell your property investment as a single family home lot. Disappointed in Karen promoting more dense housing development in Palo Alto. Too bad can't cap donations from developers. However, at least she recused herself from future real estate recommendations where she had enjoyed some monetary gain.


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Posted by Eric F
a resident of Downtown North
on Jun 16, 2014 at 6:46 pm

Eric F is a registered user.

Karen Holman is widely known as a strong and astute advocate for resident issues. The idea that she should have an inappropriate relationship with development special interests seems frankly farfetched to me.

I worked on the No on D campaign, and I am a member of Palo Altans for Sensible Zoning. While we differed with Ms Holman on the Maybell project, she continues to be widely respected within PASZ as a friend to residents. Reasonable people can have principled disagreements and still support a common cause.

I for one greatly value Ms Holman's service on the Council these past four years, and if she chooses to run again, it will be my honor to vote for her.


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