News

Editorial: Fixing conflict-of-interest rules on Stanford ties

City of Palo Alto and Stanford should press for reforms to address perennial problem

With Stanford University owning substantial commercial and residential property within Palo Alto city limits, City Council members with even the most benign affiliations with the university have for years been advised to recuse themselves from participating on any issues that could possibly affect Stanford.

The strict adherence to guidelines and advice from the California Fair Political Practices Commission (FPPC), the agency responsible for enforcing state conflict-of-interest laws, has at times resulted in multiple council members absenting themselves from discussion and not voting on important issues.

Since it is unusual for the council to have close votes on issues, the primary impact of the conservative advice from the FPPC and the city attorney hasn't been a change in the outcome of a vote but in the loss of input and perspective of the excluded council members and the electorate being deprived of the full participation of its elected representatives.

But with the current council closely divided over development issues, the consequences of what most believe are inconsequential technical conflicts of interest could actually change the direction of city policy.

This was demonstrated last month when, based on a written opinion from the FPPC, Councilman Tom DuBois recused himself from participating in discussion and votes on adopting a temporary limit on development in downtown Palo Alto, California Avenue and along El Camino Real. With DuBois not participating, several motions failed on 4-4 votes that would have passed had DuBois not recused himself.

DuBois' wife works for Stanford in an academic department, and therefore he derives income from Stanford. Under the long-standing FPPC interpretation of the law, that means DuBois should not participate on any issue which could have a "foreseeable and material financial impact on Stanford." In this case, the FPPC argues that the marketability of Stanford's properties within the Stanford Research Park could be affected by approval of a development cap, whether or not the research park is actually subject to the proposed development cap (which is not part of the current recommendation.)

Either way, the FPPC says, DuBois may not participate, citing several ways in which its regulations consider an action that could affect the value of a property to create a conflict because "the effect on the council member's source of income is foreseeable and material."

The same reasoning has tripped up many previous council members in similar situations, including Larry Klein, whose wife is an emeritus professor in the School of Education.

The possible conflict is easier to see if one looks at a hypothetical situation in which a council member worked for Hewlett-Packard Co. and the council was considering a requested zoning change for property owned by the company. In that case, disallowing participation of the council member makes sense.

But at some point we think the logic falls apart; Stanford has some similarities to a large company but its education mission and the detachment between its academic and commercial activity create a unique set of circumstances worthy of deeper thought from the FPPC and legislature.

Underscoring the problem, the FPPC recently advised council members Greg Scharff, Marc Berman, Eric Filseth and Liz Kniss that the fact they own property downtown or in the California Avenue area is not a conflict requiring recusal because it is doubtful that the development cap would have any effect on the value of their property. That makes little sense.

Why should participation by council members who actually own property in or near areas subject to the development and could be personally impacted financially be allowed but not by a council member whose only "conflict" comes from having a spouse who is working for Stanford?

The council is right to question the FPPC's advice and to instruct city lobbyists to explore changes to the state law or regulations, as it did on Councilman Pat Burt's urging last month.

The nature of the Stanford-Palo Alto relationship may be unique in California, where a private university owns, develops and leases substantial property within the city limits and is subject to city zoning rules.

Conflict-of-interest laws were intended to prevent public officials from financially benefitting from the decisions they make. While it is logical to also include indirect financial benefits an official might receive from an employer or a company in which they have an ownership interest, greater clarity is needed as to when a conflict becomes of sufficient materiality to warrant a recusal.

After decades of struggling with these Stanford-related conflicts, it's time to establish new standards that reflect this unique situation.

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Comments

8 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jul 10, 2015 at 7:57 am

Let Tom Dubois vote. Eliminate the double standard. Respect our election results and stop the hypocrisy.


4 people like this
Posted by Peter Carpenter
a resident of Atherton
on Jul 10, 2015 at 8:03 am

Peter Carpenter is a registered user.

"Conflict-of-interest laws were intended to prevent public officials from financially benefitting from the decisions they make."

They are also intended to eliminate the perception that an elected or appointed official what not acting in the public's interest but rather in favor of someone to whom that official was beholden.

The current rules may be cumbersome but they are better than the proposed alternatives. The citizens' faith that officials are acting in their behalf is of paramount importance.


1 person likes this
Posted by six of one
a resident of Another Palo Alto neighborhood
on Jul 10, 2015 at 8:08 am

Online name--there is no "disrespect" of our election results or "hypocrisy".
The city relies on the FPPC to determine if there is a conflict of interest. That is what is happening--no disrespect of our election results

I will say that this editorial appears to have been written by either PASZ or the so-called "residentialist" members of the council.
Why? As this paragraph from the editoiral states:

"Underscoring the problem, the FPPC recently advised council members Greg Scharff, Marc Berman, Eric Filseth and Liz Kniss that the fact they own property downtown or in the California Avenue area is not a conflict requiring recusal because it is doubtful that the development cap would have any effect on the value of their property. That makes little sense. "

The above makes it sound that the rulings of the FPPC are a problem and the fact that the FPPC ruled that certain councilmembers that residentialists do not like are not in conflict is an issue. Perhaps the weekly should examine the ruling and see why the committee thought it made sense


5 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jul 10, 2015 at 8:23 am

How is not a farce to let property owners vote while barring someone who doesn't own property but whose wife simply works for Stanford?

To quote Peter Carpenter above, "The citizens' faith that officials are acting in their behalf is of paramount importance."


1 person likes this
Posted by six of one
a resident of Another Palo Alto neighborhood
on Jul 10, 2015 at 8:37 am

These rules regarding conflict of interest are not new nor were they put in place to thwart the so-called residentialist council members or their supporters at PASZ. They have been in place for a long time. As the editorial noted, Larry Klein has the same issue
Obviously, based on the story about this and the editorial, Palo Alto feels that the world should revolve around them. Therefore this long standing law should be changed because a small organization and a local newspaper do not like how it is being evenly enforced.

What you are really saying Online name, is how dare the FPPC stand in the way of the PASZ/"residentialist" plan


Like this comment
Posted by Abitarian
a resident of Downtown North
on Jul 10, 2015 at 11:12 am

Like others, I believe there is opportunity for improvement in the way FPPC rules are written and/or interpreted. While the Stanford issue is well-known and long-running, there are other examples.

Several weeks back, Council Member Berman recused himself from a discussion concerning smoking in multi-unit dwellings because he lives in a condominium building.

Of course, it would be appropriate for Mr. Berman to recuse himself if, say, he or a member of his household smokes or owns an apartment building. In those cases, he could not be impartial because the outcome would impact him personally and/or materially.

Simply living in a condominium does not seem adequate for disqualification on any and every multi-unit housing issue.

Let's flip the example. Say, Council Members living in single family homes had to recuse themselves from any discussions or votes impacting single family homes.

Given that virtually all Council Members at any given time live in single family homes, it would mean the City could never enact ordinances applicable to single family homes.

Certainly, a standard protocol and independent review is critical to democracy, but to be truly fair, rulings need to take into account the context and consider the actual relationship, or lack thereof, between the individual legislator and the law in question.


7 people like this
Posted by Adhere to FPPC
a resident of Duveneck/St. Francis
on Jul 10, 2015 at 11:21 am

Palo Alto Weekly Editor(s), you have become apologists for Stanford University, which has become increasingly corporate with an expansive building program. ("...Stanford has some similarities to a large company but its education mission and the detachment between its academic and commercial activity create a unique set of circumstances worthy of deeper thought from the FPPC and legislature.") The Vice President of Land, Buildings and Real Estate reports jointly to the President of the University and to the Provost. Web Link


5 people like this
Posted by Burt's Agenda
a resident of Green Acres
on Jul 10, 2015 at 12:12 pm

Interesting that Burt now sees a problem with this ruling. He has been on planning commission and council for over a decade, and never challenged it before. But now that it is impacting his (new) agenda, he sees fit to say the rule in wrong. [Portion removed.]


Like this comment
Posted by Joe
a resident of Another Palo Alto neighborhood
on Jul 10, 2015 at 1:30 pm

> The current rules may be cumbersome but they are
> better than the proposed alternatives.

This is clearly an opinion—not a matter of proven fact.

The current system does not provide any real sense of whether elected officials are acting according to the law, or not. Too much of the system rests on the backs of people to recuse themselves without providing reasons for their actions.

For instance—in this case, duBois recused himself after consulting the FPPC, but that action was not reported in the Weekly until recently. Did duBois provide that reason to the public when he stepped out of the office capping discussion? Did he introduce the correspondence between himself and the FPPC into the public record so that everyone could see what was going on?

In this case, there was no chance that the covered official would be considered as enriching himself because of his voting in this matter. Yet, the FPPC believed that he should not participate on the flimsiest of reasoning.

Saying that someone’s spouse works at Stanford could mean anything from that spouse being the president of the university to be a grounds keeper—with absolutely no influence on university policy. There are also hundreds of people employed at the hospital—which presumably also qualifies as “Stanford”. The idea that a council member married to an orderly at the hospital would force the council member to not be involved in discussions involving Stanford is absurd!

There is little evidence that the current laws regarding “ethics” have been so well-researched/conceived that those laws should be above review, from time-to-time. In this day and age, we have the ability to use data mining to review millions of public and private records to determine linkages between covered/elected officials and possible legislation that might involve some sort of conflict-of-interest. Yet, with all this technology at our disposal, we don’t seem to seem much movement towards using it to help us root out possible wrong doing by elected officials. To what extent the FPPC would need to be involved in such changes is an open question—but we certainly can not believe that the current laws are sufficiently rigorous, or useful, that they will not ever need changing.

Palo Alto, and Menlo Park, should work together to make this point to the FPPC, and the legislature, so that better rules about what constitutes a conflict-of-interest for people like duBois will be produced in the near future. Otherwise, it might be that people with a spousal attachment to Stanford should be considered as less appropriate for Council seats than those without this baggage.



1 person likes this
Posted by Juris
a resident of another community
on Jul 10, 2015 at 4:07 pm

There have been shenanigans about Stanford conflicts with City of Palo Alto officials for years. Remember the former Stanford staff member with no qualifications for the job who was almost hired in a senior position with the Planning Department? The former City management liked his Stanford ties and tried to get hiring him by Council under the pretext of re-organizing the planning department. After an uproar by rank and file staff members and residents City Council vetoed the idea.


Like this comment
Posted by Counterclockwise
a resident of University South
on Jul 10, 2015 at 6:20 pm

"Underscoring the problem, the FPPC recently advised council members Greg Scharff, Marc Berman, Eric Filseth and Liz Kniss that the fact they own property downtown or in the California Avenue area is not a conflict requiring recusal because it is doubtful that the development cap would have any effect on the value of their property."

In plain words, if you have a clear chance of benefitting personally by one outcome, you need not recuse yourself.

That makes little sense.


2 people like this
Posted by Cheryl Lilienstein
a resident of Barron Park
on Jul 10, 2015 at 6:55 pm

Curious that when Palo Alto Weekly editors call into question the frivolous application of an important FPPC rule, and in so doing remind the public that there are councilmembers who have MATERIAL gains to be made from development choices they make, that a reader thinks the editors are being Influenced by PASZ.

Frankly, it's a compliment.

Planning decisions being made by the city council and the newly formed Citizen's Advisory Committee for the Comprehensive Plan will have a material effect on your quality of life.

If you would like to be invited to PASZ meetings or get updates on occasion, please join us:
Paszaction.org


5 people like this
Posted by Agenda
a resident of Another Palo Alto neighborhood
on Jul 10, 2015 at 7:08 pm

I guess it is a " frivolous application" when it impacts one of PASZ's anointed ones. There have been other council members that have lived with the " frivolous application" of this rule (I.e. Larry Klein, also yiawah yeh, I believe and a few others)
IMHO, I also believe that the weekly has provided biased and one sided coverage of these issues. Coverage which clearly favors PASZ and their people on the council. I do not know if Cheryl and PASZ are directly writing some of these editorials/articles or just giving " advice" that "should" be followed- but either way I have long abandoned reading the weekly for factual and unbiased coverage. Given that, I find it amusing to read the weekly and seeing how their coverages is twisted to favor certain segments of the city.


2 people like this
Posted by jlanders
a resident of Barron Park
on Jul 10, 2015 at 7:50 pm

jlanders is a registered user.

The FPPC's advice depends on the information they were presented. Here's a link to the FPPC's letter to Ms Stump (see: Web Link). We haven't seen Ms Stump's three requests to the FPPC. Perhaps the City Manager's Office can release them?

Reading the FPPC's letter, Ms Stump's queries apparently stated that Palo Alto's office cap "could affect the marketability of Stanford's property." So, the FPPC concluded: "Thus it appears a financial effect can be recognized as a realistic possibility .."

This is a fatal flaw in the FPPC's advice. The land in the Research Park is deed restricted and can't be sold. Tenant leases can span decades. So how can the City Attorney support her claim? Did she provide an analysis of the Palo Alto real estate market and and an office cap impact report with her request to the FPPC? The City Attorney has the burden of proving her assertion.

I encourage Tom DuBois to simply ignore this obviously flawed analysis. Tom, you need to do the job we've elected you to do!


4 people like this
Posted by Abitarian
a resident of Downtown North
on Jul 10, 2015 at 8:19 pm

Mr. DuBois ran on a land use platform and we now learn that he is a lame duck and may be prohibited from participating in some of the most critical issues of the day.

Really, I had no comprehension that the Stanford ban is so restrictive. Hopefully, this will get resolved before the next election.

Otherwise, I will be hesitant to vote for any candidate with even the most tenuous connection to Stanford.


1 person likes this
Posted by Norman Beamer
a resident of Crescent Park
on Jul 11, 2015 at 6:43 am

It appears that the FPPC is interpreting the conflict of interest rules very conservatively in favor of recusal. Typical organizational behavior -- exalting its own importance regardless of reason. I'd say it has a conflict of interest, and should recuse itself from ruling on such things.


Like this comment
Posted by mattie
a resident of Community Center
on Jul 11, 2015 at 6:25 pm

as a mathematician, i like to make preliminary points through extreme hypotheticals.... so in that spirit.....

are we sure wouldn't benefit from handing off ALL decisions about Palo Alto to the Stanford Board of Trustees?


Sorry, but further commenting on this topic has been closed.

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