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Palo Alto Online

Publication Date: Friday, November 28, 2003

Council to seek state fix for Cordell's 'conflict' quandary Council to seek state fix for Cordell's 'conflict' quandary (November 28, 2003)

Palo Alto officials will lobby for technical change to obscure section of state Government Code to include Stanford in 'nonprofit' definition

by Bill D'Agostino

Palo Alto officials will seek a technical change in state law to enable Councilwoman-elect LaDoris Cordell to take office Jan. 1 without triggering potentially major disruptions in contractual relationships between the city and Stanford.

"There are millions and millions of dollars at risk," City Manager Frank Benest told the council -- unless the state Legislature alters a law dating back to the 1800s that prohibits city councils from entering contracts with a member's employers.

The City Council voted 7-0 Monday to authorize lobbying state representatives for a minor modification in a section of the Government Code designed to prevent conflicts of interest and "self-dealing" between public agencies and private organizations. Councilman Jack Morton was absent and Mayor Dena Mossar did not participate because her husband, Paul Goldstein, works for Stanford.

If the effort is successful, the alteration could be signed into law by Gov. Arnold Schwarzenegger in about three months.

Stanford University, where Cordell works a vice provost, was thought to be exempt from the law until immediately after she was elected to the council Nov. 4. The actual amendment would be to a sub-section, 1091 (b)(1), which defines exemptions to the law.

The council agreed to have Benest and Vice Mayor Bern Beecham press for a change to allow Stanford to be exempt, as are most other universities and nonprofit organizations. Stanford was set up in 1900 as a "trust with corporate powers" and is treated as a nonprofit organization under tax laws -- the law creating nonprofit organizations did not exist at the time.

Until the law is changed, the city and university will not be able to enter into any new contracts or alter any existing contracts, subject to their being declared void.

"It's a fairly sobering situation," Councilman Vic Ojakian said.

Contracts the two share include agreements for fire protection and utilities and a lease for El Camino Ball Park to the city.

The major immediate impact would affect a pending agreement for Stanford to create new soccer fields on the former Mayfield School site on the university's land at Page Mill Road and El Camino Real. All negotiations will have to cease while the change to the law is being sought -- at least a three-month delay, officials estimate.

Cordell, who did not attend Monday's meeting, theoretically faces personal "criminal liability" under the Government Code section. But prosecution is considered a remote possibility in her case due to her serving 19 years as a judge in Santa Clara County. She also would not receive a direct personal benefit from any contract.

The law exempts officials who have worked for an employer more than three years, but Cordell only began working at Stanford in March 2001.

Cordell legally has every right to serve as of Jan. 1. Beecham noted that the law designates the beginning of the term, so Cordell cannot simply wait until March to be sworn in.


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