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Appeals Court Deals Blow to City

The LookOut (Santa Monica, CA)

A State Appeals Court ruled Friday that the City could not sue itself in an effort to strike down one of the nation's strictest conflict of interest laws, which was approved by Santa Monica voters in 2000.

The ruling by the 2nd District Court of Appeal, however, does not rule on the constitutionality of the initiative, which bars public officials from accepting campaign contributions, gifts or jobs from sources who have benefited from their votes or actions.

"Not only does Santa Monica lack the requisite standing to challenge the constitutionality of the initiative, the claims asserted by Santa Monica are not ripe for determination," the court wrote in a published decision

"Santa Monica's dogged pursuit of litigation," the justices said, "is not sufficient to give rise to an actual justiciable controversy," meaning the dispute cannot be resolved in court in the present form.

In addition, the court ruled that the City --- which had to hire outside attorneys since it was suing its own City Clerk -- must pick up the legal fees for the suit.

The City's tab will likely be considerable (some familiar with the case say in excess of $500,000), since it must pay for the law firms representing the City, the City Clerk and the Foundation for Taxpayer and Consumer Rights (FTCR), which sponsored the initiative.

The Santa Monica-based Foundation -- which successfully sponsored similar initiatives in three other California cities, including Pasadena -- said it's time to carry out the will of the voters.

"Voters approved the strongest conflict of interest initiative in the nation to fight corruption in four California cities, and it's time that protection was carried out in those cities and brought to other cities across the state," said Carmen Balber, consumer advocate with the foundation.

"All local politicians should be banned from accepting campaign cash, gifts or jobs from any company they award tax money," Balber said. "Only then can we end the appearance of corruption that political favors and revolving door jobs inevitably leave with the public."

City officials said they were disappointed with the ruling, which they hoped would address whether the initiative was constitutional.

"I understand that the court had discretion not to reach the constitutional question," said City Attorney Marsha Moutrie. "Nonetheless, I'm disappointed they didn't.

"The City has been appropriately reluctant to implement a measure we believe is unconstitutional, and we're assessing our options," Moutrie said.

City officials, however, were heartened that the court acknowledged the issue of constitutionality was an important one that needed to be addressed.

In the midst of the 55-page ruling, the court wrote: "We recognize the constitutional questions posed by Santa Monica and the City Clerk undoubtedly are of significant interest and continuing public import.

"Strong public policy and public interest principles are at stake, issues which are of great interest to the parties to the litigation and the public at large," the court said.

City officials must now decide whether to appeal Friday's ruling or file a separate action. They also must decide whether to continue to refuse to implement the measure, which has been ruled unconstitutional by trial courts in Orange County and Pasadena.

"We're kind of between a rock and a hard place," said Councilman Ken Genser. "If we start enforcing it, we commit an unconstitutional act.

"Our goal has been to try and get this before a judge and get a substantive ruling on the constitutionality," Genser said. "The only court that has ruled on it substantively... said it was unconstitutional."

Balber notes that the City's continuing legal battle is being bankrolled by the very taxpayers who approved the initiative with nearly 60 percent of the vote.

The foundation, she said, is exploring avenues to require the individual City Council members who initiated the suit with a unanimous vote in May 2001 to repay the taxpayers.

"It's the politicians on the City Council that brought the suit," Balber said. "They didn't like a law and made up a lawsuit to challenge it. It was clearly a trumped up situation to benefit the individual politicians.

"They should be held personally responsible for the fees," Balber said. "The taxpayers shouldn't be responsible."

City officials have argued that in addition to being unconstitutional, the initiative would chill citizen participation on boards and commissions and is unnecessary because City election law already limits campaign contributions to $250 for Council races (the only elected office).

They also point out that in Santa Monica contracts -- which are a key component of the measure -- are hammered out by paid City staff.

Under the initiative, which became an amendment to the City Charter, officials cannot receive gifts from public benefit recipients for two years after the expiration of their terms, two years after the official's departure from office, or six years from the date the official acted to approve the allocation, whichever comes first.

Citizens would be authorized to bring civil enforcement actions under the law. Civil remedies would include penalties, restitution to the City, injunctive relief and disqualification from future public office.

A resident prevailing in a civil action would be entitled to attorney's fees, costs and 10 percent of any civil penalty, with the balance going to the City's general fund.