Sept. 9, 2004
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2004 CNPA Award
Freedom of Information - First Place
~ and ~
2005 James Madison Freedom of Information Award
Community Media category
of Professional Journalists, Northern California Chapter
Freedom of Information Committee
Photo of the unsealed Grand
Jury transcripts in the case
against Fortuna council member Debi August.
GURNON and HANK SIMS
AN EGREGIOUS ABUSE OF POWER,
OR AN INNOCENT ATTEMPT to help a constituent?
In the summer of 2002, real
estate broker and newly elected Fortuna Councilmember Debi August
became the official agent for the Smith/West subdivision, an
upscale "estate" development of 39 hilltop parcels
on South Loop Road in Fortuna.
In that role, she represented sister-brother
developers Carmen Smith and Ted West for over a year as the initial
work of planning the 24-acre subdivision proceeded. She made
contact with city employees charged with overseeing the project,
arguing against their recommendations that the developer install
sidewalks and a second road linking the project with city streets.
Finally, at a Planning Commission meeting in September 2003,
August rose from her chair as City Council liaison to the commission
and switched hats. She said that she was now acting as a private
citizen representing the developer and presented a case advocating
the subdivision to the commissioners, who serve at the pleasure
of the City Council.
August, 53 [photo at left] ,
initially told city staff that she planned, as a real estate
broker, to sell the parcels should the development go through.
Later, when questions of conflict of interest arose, she said
she would not be involved in the sales. She also said that she
did not bill Smith for acting as her go-between with the city,
and that she was only helping the project along because she felt
it would be a good thing for Fortuna.
But after a neighbor complained
about August to the Humboldt County Grand Jury, it began investigating.
On May 4, the Grand Jury filed a formal accusation against August
on five counts, the most serious of which is malfeasance conflict
of interest in representing a developer of a subdivision subject
to City Council approval while a council member.
When the accusation against
August was first announced, her supporters hinted that she was
the victim of a political vendetta. August had supported the
effort to recall District Attorney Paul Gallegos. Assistant District
Attorney Tim Stoen was the legal advisor to the Grand Jury throughout
the hearings that led to the accusation, and the transcripts
show that near the end of those hearings Stoen made a persuasive
case that charges against August were warranted. August's supporters
-- including her attorney, Bill Bragg -- seemed to think that
Stoen, a fervent Gallegos supporter allegedly eager for payback
against his political opponents, manipulated the Grand Jury into
going forward with the accusation.
With the release of the transcripts,
it becomes apparent that this argument has two holes. First,
the Grand Jury initiated the August investigation and eventually
made the decision to go forward with the charges against her.
It's hard to imagine that Stoen could persuade a collection of
distinguished, mostly older citizens to do his political dirty
work, especially given that the Grand Jury began looking into
the matter before Stoen was brought on.
Second, perhaps the most important witness
against August was one of the highest-profile supporters of the
recall -- her colleague, former mayor and now Councilmember Mel
Berti. Berti appeared in television ads for the recall committee,
advocating for Gallegos' removal on the grounds that the DA was
soft on drug crimes. But two months after the recall failed,
Berti sat down with Stoen and the Grand Jury and recounted how
he tried to rein in August's behavior, with no success.
Last week Judge W. Bruce Watson,
after considering arguments brought by the North Coast Journal
(see sidebar below), agreed to unseal
transcripts of the Grand Jury's interviews with witnesses in
the August case, along with documentary evidence, which together
led to the accusation against her. Among those interviewed are
August's fellow Fortuna City Council members, the city's planning
commissioners and city employees.
A note about editing: We've
corrected typos in the transcripts, but left e-mails and letters
intact, so all spellings and punctuations are as written by the
As for the South Loop Road development,
it was approved late last year by the Planning Commission and
the City Council. But Smith, a South Fortuna Elementary School
kindergarten teacher who inherited the property from her parents,
told the Journal earlier this week that the requirements
placed on the project by the city made it impossible for it to
pencil out financially. She informed the City Council she had
no intention of building. Furthermore, she said that she never
paid August a dime for her help. She called the council member
a "wonderful person" caught up in an unfortunate mess.
"I really don't know what
all the fuss is about," Smith said.
August's guilt or innocence,
along with what punishment, if any, she should face, will be
determined in court. The punishment in this case would be limited
to removal from the City Council. On Tuesday, Judge W. Bruce
Watson overruled the defense's demurrer on all counts, meaning
the case will proceed.
But residents of Fortuna --
and other areas of the county, where similar conflict-of-interest
problems have arisen in the past -- may use the Grand Jury's
evidence, excerpted here, to draw their own conclusions about
where the line between the public duties and private interests
of their elected officials ought to be drawn.
South Loop Road development
Debi August was the top vote-getter
in the Fortuna City Council elections of April 2002, after serving
for 15 years on the city's Planning Commission.
August first notified Fortuna
city staff in the summer of 2002 about the proposed Loop Road
development. The following is a July 25, 2002 e-mail from August
to Charles Clark, the city's engineer at the time.
Charles, I am meeting Tim Theiss
(SHN) [engineering firm] at the Loop Road property at 2 p.m.
tomorrow (Friday). Would you also like to be there? We are looking
at the property to understand the feasibility of developement.
Your input would be very valuable. Thank you in advance!!! Debi
As plans for the development
progressed, August participated in numerous meetings and phone
calls with city staff, including City Planner Liz Shorey. It
was still early in the process when Shorey forwarded a San Francisco Chronicle story to August about
a city official who was being investigated for possible conflict
of interest in his dealings with a developer. August wrote back
the following e-mail on Aug. 2, 2002 (emphasis is August's):
Hi Liz, I am not sure of your
understanding of the article you sent me. I have always believed
that if I have a conflict I should not participate in the meeting
(either planning or council) and in fact should leave the room.
I do not believe that I can't be involved in the planning
of the project. I am not being paid for the help I am giving
to Carmen Smith. However, if the project is completed I will
be selling the parcels, so I have a conflict. If this project
goes forward I will not be participating in any of the hearings.
Have a good day! Debi
Shorey responded this way
in another e-mail Aug. 2:
Debi, regarding the article
I sent you, I am not making a big issue out of it. I am certainly
not saying that you even have a conflict. It just sounded similar
to, not exactly the same as, your situation with Carmen. I assumed
you weren't getting paid right now and that you wouldn't vote
on it. But it still sounds to me like there could be an appearance
of a conflict because, obviously, you have influence at City
Hall, and you would end up getting paid, and therefore you would
have a stake in whether you get it approved.
Shorey testified before the
Grand Jury that she was concerned about the San Francisco case.
I don't remember if charges were actually pressed, but there
was an investigation. And I thought it sounded similar to what
she was going through.
Tim Stoen: What was your motive for sending it to her?
For her to think about what she was doing, and for her to determine
if she was doing the right thing. I don't know what the law is.
I wasn't exactly telling her, you have a conflict.
Shorey also described in
her testimony that she was "more sensitive" to the
developers' timeline because of August's involvement and the
fact that she was a City Council member. She felt August had
attempted to influence her recommendations on the project, she
we had a pre-application meeting [August] was saying certain
things about the project that she wanted to see.
Do you recall what she said she wanted to see?
Yes. She specifically said she didn't want to see a second access
[road], and she felt that they needed to improve the off-site
portion of the street but not the on-site portion. And I recall
that because I didn't agree with either of those things.
Did you sense there might have been a conflicting role for Deborah
August being a City Council member as well as bringing to your
attention recommendations on this development?
Yes, I did.
In the end, the Planning
Commission approved the development, but deleted the on-site
road improvements -- items that Shorey had recommended but that
August and the developer did not want, Shorey testified.
August continued to represent
Smith for the next year. She also became increasingly frustrated
with what she saw as a city bureaucracy plagued with sloth and
incompetence. She shared her frustrations with fellow council
member Tom Cooke in a Feb. 12, 2003 e-mail:
The City is falling apart. Two
builders just left here and they are in a panic state. They gave
the city building plans 6 weeks ago. Last Tuesday they turned
in the additional info [the city] wanted Still no permit. I called
and spoke to Duane [Rigge] who is well aware of what is going
on. He has no guts. This City is in chaos! Planning department
is about to blow up, building dept. may never see another contractor
turn in plans because they make it so difficult and unfriendly.
Our Manager has no forceful features and acts like a damn wimp.
I CAN'T STAND WHAT IS HAPPENING HERE!!!! Debi
By the summer of 2003, other
problems became apparent. A group of neighbors of the Loop Road
project complained to City Manager Duane Rigge about the grading
work being done on the development. Rigge described their concerns
in a Aug. 21, 2003 e-mail to August, and also told August for
the first time that the Grand Jury was investigating city involvement
in the project. Rigge wrote:
[Neighbor] Jim Wingo had asked
to meet with Liz [Shorey] and I about the project as a follow-up
to the letter he had sent to the City. He brought with him, four
other property owners to present their concerns with the "out-of-control"
grading work that has been perform by Wendt. They were under
the impression that City staff had approved all the earth work
that Wendt Construction has already performed. I explained that
the work done to date did not comply with minimum grading plan
that Wendt had submitted and that we were in the process in issuing
a stop work/fix notice for the work. They were also under the
mistaken belief that staff had already "approved" the
subdivision plan without public input. In addition, the Grand
Jury has summoned Liz for questions next Monday about the City's
role in this project.
August was irate. She wrote
back to Rigge the same day:
The Grand Jury summoned Liz
for what project? Carmen Smith's? What in the world for? What
is going on Duane, who and what feels there needs to be a Grand
Jury investigation into this project? It hasn't even made it
to the planning commission. It seems ludicrest to me that anyone
would feel the need to look for wrong doing into this project
let alone the grand jury. I told Carmen that her son should sell
the lots and then I wouldn't have a future conflict. I have not
charged a dime of my time on this project. It is an exceptional
subdivision, one that would make any city proud to have. I have
absolutely never at anytime done anything wrong I don't know
who instigated this but I will find out. You can rest assured
At the City Council meeting
of Sept. 2, 2003, August addressed the conflict of interest concerns
in more measured tones, and brought up some concerns of her own,
It has come to my attention
that a group of Fortuna citizens believe that I have a conflict
of interest in a proposed planned unit development in their neighborhood.
I have also been informed that there is a grand jury investigation
into that possibility. While I welcome the grand jury's investigation,
I feel very badly that my interest in this development may have
been construed as personal rather than a public one.
I have not and will not accept
compensation for any help or advice that I may have provided
to the project.
Our City Attorney told me that
as long as this event was at least 12 months in the future that
I had no conflict of interest.
I made it very clear that I
could eventually have a conflict of interest if the lots were
listed with my office.
I want to publicly apologize
to any citizen or citizens who may have felt that I was attempting
to gain favor by my participation. I can assure you I was not.
I also want to state publicly
that I will not list, nor act as an agent for the seller in the
sale of this development, should it be completed.
I am removing any and all possible
conflicts so that I can do the job I was elected to do. From
this time forward my only involvement will be that of council
liaison [to the Planning Commission], not only to this applicant,
but also for any member of the public that may have a concern
or a project that they feel is not being treated fairly and equitably.
Now I would like to take this
opportunity to inform the public of my concerns and fears for
this City. It is my opinion that this City is in trouble. The
friendly City is no longer friendly. Policies and procedures
that Fortuna has always followed are being disregarded and citizens
are being told by city staff that Fortuna is changing its policies.
This council has made no policy changes Unbelievable improvement
requirements are being requested by city staff that have never
been required before.
Our City Engineer and Public
Works Director are ignored. Our Planning Commission is in trouble
with members wanting to quit. City staff make recommendations
that are not proven or even investigated for their merit both
to the commission and to this council as well.
Since 1977, I have made comments
and wrote letters to the editor about how this country is being
infiltrated, in every phase of government, by people who hold
a socialistic belief of government. We in Fortuna have been blessed
to be governed by conservative leaders, who believed in the rights
of private ownership and individual freedom. We have been able
to use and enjoy our property under fair and friendly zoning
codes and ordinances.
Sadly those days are gone.
there is no amount of money
that could induce me to remain quiet while our citizens are being
mentally tortured. Time keeps moving along and this city keeps
sinking deeper into the mire.
If I need to resign my council
seat so that I can speak out openly and freely against the tyranny
that is being rampaged against our citizens, then so be it.
Plugging the project
Three weeks later, on Sept.
23 -- in what appeared to be an about-face from her comments
to the City Council -- August stood before the Planning Commission
and made a presentation on the project on behalf of Smith.
In the Grand Jury questioning,
Stoen asked Mayor Mel Berti [photo
at right] whether he thought this was
a conflict of interest:
I about fell off my chair when she got up there and did that.
After her Sept. 2 speech
to the council, "I thought she was finally getting the message
to where she was stepping out of bounds," Berti told the
Berti also testified that
at least two residents had complained to him that they believed
August had a conflict of interest in the Smith project.
What was the particular official duty they felt might be violated
Just representing -- number one, putting staff in a bad position
by representing a client, and then leaving like the Planning
Commission liaison and go over there and take the whole project
through its entirety, and signing `agent' on there. And they
were well aware it was a conflict of interest, and they were
kind of dumbfounded that she did that.
Do you think it had a tendency to have a chilling effect on the
staff and their recommendation?
Most definitely. Because, see it intimidates staff because, number
one, when a council person comes to you -- I mean, that is the
boss. You understand? We are five bosses up there. If a boss
takes over a situation as an agent, and goes to staff, well,
staff is saying, geez, what do I do? Here is the boss. So that
is intimidation too when you do that to the staff, when you step
down as a council person and be an agent. It makes it pretty
rough on the staff, because they are saying, geez, do I really
go with the situation like they want or do I go by the rules?
How should it be?
When you put your name down
as an agent and you are a City Council person, I think that is
kind of a major conflict. If she would have just helped them
-- like a lot of people come to us and asking for help, sit down
with a department head and go over it so they understand it,
that is a different thing. But when you sign your name as an
"agent," and you sit there and you carry this through
a meeting for an hour I have a problem with that.
On the night of Sept. 23,
a remorseful August sat down to write a letter to Planning Commissioners
apologizing for making her presentation.
I would like to formally apologize
to each Commissioner and each member of the public who were present
at tonight's planning commission meeting. I now know that I should
not have presented the Smith/West project at the podium. The
reasons for doing so was that I felt that after I had eliminated
the possibility of any future financial gain and had removed
the possibility of any conflict of interest I could basically
do anything I wanted. I was wrong. Please believe me when I tell
you that it was not and has never been my intention to influence
or sway the commission one way or the other. Yet that is exactly
what I was doing. I am sorry, truely sorry.
August went on to say that,
since former City Manager Dale Neiman resigned in 2002, she felt
it was up to her to become the expert on planning issues.
In my person I felt like I had
to stand up and fight for the citizens of Fortuna. I believed
we were turning into Arcata. I wanted to speak at planning commission
meetings to help the commissioners but was told I could not.
I was frustrated, miss-directed and literally brain dead and
that is why I did what I did. And again I am sorry, very sorry.
April 9, 2002:
Debi August is elected to the Fortuna City Council after serving
for 15 years on the city's Planning Commission.
July 25, 2002: In her first documented contact with city
staff on the Loop Road project, August writes to City Engineer
Charles Clark asking him to attend a meeting with her and an
engineering firm "to understand the feasibility of development."
Aug. 2, 2002: August responds to an e-mail sent to her
by City Planner Liz Shorey about a San Francisco Chronicle
story involving a city official accused of conflict of interest.
August wrote she would be selling parcels if the development
is approved. August spends the next year helping shepherd the
project through city channels.
Aug. 21, 2003: August learns from City Manager Duane Rigge
that some neighbors of the Loop Road project were upset, and
that a Grand Jury investigation was under way.
Sept. 2, 2003: August reads a statement at a City Council
meeting saying she is removing all possible conflicts for herself
on the Loop Road project, and that she would only act before
the Planning Commission as the City Council liaison, her designated
role, from now on.
Sept. 23, 2003: Stepping outside the role of liaison,
August makes a presentation to the Planning Commission on behalf
of Smith and the development. Later that evening, she writes
a letter to Planning Commission members apologizing for her presentation
Sept. 30, 2003: Planning Commission approves Loop Road
Dec. 1, 2003: City Council approves development.
May 4, 2004: Grand Jury makes a five-count accusation
against August, charging her with malfeasance conflict of interest
for acting as agent for a developer of a subdivision subject
to City Council approval while a City Council member; criminal
violations of the state Political Reform Act for filing various
economic interest forms required of office-holders without disclosing
income; and malfeasance contempt of Grand Jury secrecy admonition
for disclosing a question asked of her by the Grand Jury to another
Sept. 7, 2004: Judge W. Bruce Watson denies defense attorney
William Bragg's request to have all counts thrown out, allowing
the case to proceed.
Journal got the Grand Jury evidence unsealed
IT STARTED WITH AN ANONYMOUS
PHONE CALL TO THE JOURNAL IN JULY.
Check out the law regarding
the sealing of Grand Jury transcripts, the caller said.
So we started to do a little
digging. What we found out was that state law (Penal Code 938.1)
was pretty clear on the subject: When a grand jury makes an indictment
or accusation against a defendant, a transcript of all testimony
is to be given to the court as well as to the defendant and the
district attorney. The transcript is to remain sealed for 10
days, after which it "shall be open to the public unless
the court orders otherwise on its own motion or on motion of
a party "
It sounded straightforward to
us. But when we showed up at the civil court window at the courthouse
to ask for the transcripts, we were turned away. "It's sealed,"
the clerk said.
We went back to the office and
called to get an appointment with Deann McCall, manager of court
operations. She told us Judge John Feeney had ordered the transcripts
sealed "until further notice of the court."
On the advice of our lawyer,
we asked to see the formal written "order" of the judge.
There was none. But this was not unusual, McCall said. Her boss,
Court Executive Officer Dwight Clark, concurred. A judge can
simply give a verbal order, he said.
Not so, said our lawyer.
It seemed we were at an impasse.
We sent a letter to the judge
asking for the file to be made available. Clark called back a
week later, saying we were welcome to bring our request before
the judge in open court. That meant filing a special notice,
waiting at least three weeks and bringing our lawyer all the
way here from Sacramento -- a pricey endeavor for a community
newspaper like the Journal.
So we tried again, with two
more letters, on Aug. 10 and Aug. 20, asking the court to consider
our request without us having to go to court.
Why would we go to all the trouble
of fighting to get the file unsealed? First and foremost, the
press has a duty to advocate for the right of the public to get
information about the workings of its government. The Grand Jury
represents the citizens of Humboldt County, after all, and its
proceedings -- according to law -- are to be public in cases
like these. The exception is when a judge or an attorney in the
case argues successfully that the file's disclosure would undermine
the defendant's right to a fair trial. That didn't happen in
the August case.
Last Friday, at the latest hearing
in the case, Judge W. Bruce Watson announced he was unsealing
the transcripts. "It does not appear the court on its own
motion, or on motion of a party, has ordered the transcript remain
sealed," he wrote in a minute order filed Aug. 30.
The result is the Journal
piece you're reading today.
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