report: concord naval weapons station

7/25/2019 Report: Concord Naval Weapons Station

1/40

JENKINS

HOGIN

LLI

ALAW

PARTNERSHIP

MCHAEL

ENK

NSANHATTAN TOWERS

CHRISTt

HocN

23

ROSECRANS

AVENUE

SUITE

JOHN

C

COTI7

MANHATTAN

BEACH

CALIFORNIA 9 266

GcEr

ss

LAUREN LANGER

3 643

448F

643

44

TkEVOx

RustN

WWW

OCALGOVLAW

C O M

MELINDAAGREEN

NATALIECKARPELES

WRITER

S

MAIL

ADDRESS

M E N KI NSaOCALGOV LAWCOM

February

2 6

CityCouncil

City

of

Concord

95 Parkside Drive

ConcordCA 945 9

Re

Concord Naval

Weapons

Station Mas te r

Developer

Selection

Dear Members

of

the CityCouncil

As

you

a re

aware

the

City

Manager received

a

letter dated September 24 2 5

from

the Hanson Bridgett law firm on behal f ofCatellus Development

Corporation

asserting violations of th e Agreement to Negotia te by Lennar Concord

LLC Lennar

in

connection

with the

Master Developer

selection process

fo r

th e

Concord Naval

Weapons Station Specif ically the Hanson Bridgett

letter

contends that Lennar violated

the

terms

of th e

Agreement to Negotiate

with th e

City

ofConcord

by

lobbying the

City

Council

The City

received

a s e c o n d letter

from

Hanson

Bridgett

on September

25 2 5

raising

the

specter

of

litigation

against

the

City

due

to

Lennars

l leged

breach The

Citys

nterim

City

Attorney e n g a g e d this

firm

a s independent

special counsel to

investigate and report

back

to

the

City Council findings and

conclusions

with respect to

these

allegations

In

connection with

th e

preparation

of

this

report I

have

considered

both

documentary and

testamentary evidence

and where

possible

I

have drawn

inferences

a s

to

the credibility consistency and relevance of the evidence

in

order

to

determine the

facts

surrounding

this

complex

issue

What

fol lows

is a

detai led explanation of

th e

applicable law and

a n a l y s i s

of the relevant

i s s u e s

which

l e a d

me to conclude that

Lennars

orchestration of

campaign contributions

to M ayor

Tim Graysonsssembly campaign

constituted

a

form of lobbying prohibited by the Agreement to Negotiate and the

removal of th e

recommendation

from the

f inal staff report

resulted from an

il legal

serial

Se e

Sep tember

25

2 5

letter from

M

Giacomini

toM

Coon

attachedhereto as

Exhibit

YY


2/40

JENIdNS HOGIN LLP

February

2 6

Page

2

meeting

I did

not

find

merit

with

any

of

Catellus

sther

allegations

Moreover I

conclude tha t the Agreement leaves th e

consequences

if any of

such

lobbying entirely

within the

Councils discretion

I FactualBack

ound

A

Persons of Note

Unless otherwise

indicated below

th e following

persons

were

interviewed

in

connection with this

investigation

Participation

by witnesses

was

voluntary and interviews were not conducted under

oath

Concord

City

Counc i lmembers as of Sep tember

2 5

Edi Birsan Councilmember

Tim

Grayson Mayor

during the re levant tim e

period and

candidate fo r

2 6

District

4

State

Assembly Race

Dan

Helix Councilmember

Laura

Hoffineister

Councilmember

Ron Leone

Vceayor

Mr Leone recused himself from the Master

Developer selection process due

to

the proximity of

h is

home

to portions of Phase I of the Concord Naval Weapons Station

Project

2

City Staff

Valerie

Barone

CityManager

Guy

Bjerke

Director of

Community

Reuse

Planning

Local

Reuse

Authority

Mr Bjerke assumed the position of Director of

Community Reuse Planning upon

th e

retirement of

Mr

Wright

onor

about

September

2

2 5


3/40

JENIaNNS

HOGIN LLP

February

2 6

Page 3

Mark

Coon

City

Attorney

Mr

Coon

was deceased

prior to the

commencemen t of

this

investigation

Jovan G rogan

Assistant

City Manage r

Michael

Wright Former

Director ofCommunity Reuse Planning Local Reuse

Auhoity

onsutan

Mr Wright

served a s

th e

Director of

Community Reuse Planning until h is retirement from h is

position

ono

about

September

2

2 5

Mr Wright

attended all of the closed sessions convened

to

discuss the

Mas te r Developer negotiation

3

City Consultants

Dahlia

Chazan

Consultant

banlanner

with

Arup

a

consulting

firm

under

contract with

th e

City

Craig

Labadie

ConsultantomeCity Attorney

Gerald

Ramiza

Consutan

oneyith

Burke

Wlliams

and Sorensen

a law

firm

under

contract with

th e

Ciry Mr Ramiza regularly

attended closed sessions

convened

to discuss the Master

Developer negotiation

Paul

Silvern

Consutan

conoms

with

HR

Aconsulting

firm

under

conract

with

the

City

Mr Silvern attended some of

the

closed sessions convened to discuss th e Ma ste r De veloper

negotiation

4

Contributors to MayorGraysonsssembly Campaign

Engeo

Uri Eliahu is

th e

CEO of Engeo

an

engineering

company

founded in

Concord

Engeo

wasLennars untersPoint


4/40

JEN IaNS HOGIN

LLP

February

2 6

Page

4

Project

geotechnical engineer and has worked on Lennar

s

Treasure

Island Project Engeo is

Lennar

sroposed

geotechnical

engineer fo r

th e

Concord

Naval Weapons

Station

GF

BunngCo

lenn Bunting is

president

and founder ofG

unng

Co

G

unting provided

public

relations

services

fo r Lennar

s

Hunters Point project

and

potentia lly other Lennar

projects

Noelle

Bonner

daughter of

Kofi Bonner Regional

Vice

President

of Lennar Urban is

a consultant

toGunting

Steven

Kay

M

Kay

is

president

of

Goden Gate

Global Golden Gate

Global

had

worked with Lennar

International

to

raise over

25 million dolla rs for

Lennar

s

unters Point

Project As

an

attorney

Mr Kay has represented

both Lennar

Homes and

Lennar

Community

Builders

M

Kay

declined

to

be

interviewed in

connection

with this

investigation

S e e Engeo

Portfolio

regarding

Hunters

Point

htp

wngeocomooo

unes

pnb

shipyardeuse

nd Treasure Island

htp

ww

ngeocom

oooeasue

andeuna

isand

euset ta c h ed he reto a s Exhibit

A

S e e staff

report

from MrWright

to

th e City Council regarding Introductory Presentations by Master

Developer

Candidates on Implementat ion

of th e

Concord Reuse

Project

Area

Plan dated February

2 5

attached

hereto

a s

Exhibit

B

4 S e e Community awaits benefits a s

Lennar

finally breaks

ground

in Hunters

Point

by

Steven T

Jones

printed

in the San

Francisco

Bay Guardian onJuly 2 3

htp

wwfb

com

c

23

ommnyne s

e

n

e

rnd

huners

ontta c h ed he re to a s Exhibit

C

5 Interview ofMr Bunring

Also s e eG

Funting

Website

hww

bunng

w

en

printout from

which is

attached hereto a s Exhibit D

6 S e e Golden Gate Global Website

htp

ww3gund

comew

ou

omany

ou

e

printout

from

which

is

attached hereto as ExhibitE

S e e Golden

Gate

Global

Webs i te

htp

ww

ud

omewoecs

ues

pnhpyad

printout from

which is

attached hereto a s Exhibit F

8

Se e

Exhibit

E


5/40

JENIQNS

HOGIN LLP

February

l

6

Page 5

Fred

Naran jo

Fred Naranjo

is

a partner

of Scarborough

Insu rance wh ich

is

based

in

San

Francisco

Mr Naranjo has attended and

contributed to fundraisers at the Bay View Opera H ouse

along with Mr

Brown

and h is

daughter

Susan Brown

Additionally

Mr

Naranjo is a resident of the Bayview

neighborhood in San

Francisco and

was a vocal

supporter

of

Lennar

s

unters Point project

Mr

Naranjo

declined

to be

interviewed in

connection

with this investigation

Mary

Jo

Rossi

Mary Jo Rossi is a former employee ofMr

Wllie

Brown

and

currently serves a s

Mayor

Graysons

ssembly campaign

manager Ms Rossi a lso represents local business

interests

such a s Garaventa Ms Rossi

declined

to be

interviewed in

connection

with this

investigation

5

Master

Developer Finalists

Catellus

Ted

Antenucci

is CEO of

Catellus

and Steve Buster is Vice

President of Catellus

9

S e e S c a r b o r o u g h

I n s u r a n c e

W e b s i tehtpagencyneonacnprintout f r om which i s a t t a c h e d

hereto

a s

E

btG

S e e Legendary

Sarah

Vaughn

d r e s s

auct ion benef it

finds

Bayview Hunte rs Po in t

global arts

program by

AldrichM

Tan

printed in

th e

Fog City Jouma l on

Apri 28

2 6

htpogctyounacomew

n

be

pea

ouseunaser6 525

html

and Bayview kids

h e a d to Africa a n d France

thanks t o Bayview

Opera

House

by

P a t

Murphy printed in

the

F o g City

Journal

on May 26

2 6

htt

www

fogciryjoumal

comews

n

beayview

opea

ouse

undase6 4 8

html attached

hereto

as

ExhibitH

S e e Catellus c r i e s foul o v e r L e n n a r

contributions

to C o n c o r d M a y o r

T im

Grayson

s

s s e m b l y

campaign

by Richa rd Eber

printed in th e Contra Costa Bee

on August

23 2 5

https

conacosabee

om

ou

o

enna

onbuons

motason

assembyampa

n

t tached

hereto

a s ExhibitI

z Interview

of

Councilmember Birsan

3

Interview

of

Ms

Barone


6/40

JENKINS

HOGIN LLP

February

2 6

Page

6

Lennar

Kofi Bonner is CEO of Lennar During his term a s mayor of

San

F rancis co Mayor B rown

appointed Mr Bonne r to serve

a s his Chief

Economic

Policy

Advisor

Mr Bonner declined

to be interviewed in connection with this investigation

6

Others

Garaventa

Garaventa Enterprises is a

recycling and

resource

recovery

company that serves Concord Pittsburg Bay

Point

Antioch

County O ak le y Discovery

Bay

Brentwoodounyyron

Knightsen Rio Vista

Bethel

Is land Rio

Vista

County a s

well a s th e entire East Bay through the

Mt Diablo

Recycling

Center

Garaventa has

been

known to pa rtic ipa te in

local

politics

and has shown

its

support fo r

local politicians though

campaign

contributions

Garaventa

and

two individuals

associated

with

Garaventa

contributed

2

o

Mayor

Graysonsssembly

campaign Garaventa was not

contacted

in connection

with

this investigation

because its

involvement

in th e ma tte rs

addressed

herein appears

to be pe riphe ra l to

th e

focus

of the investigation

Seeno

ADeeno

Construction

Co

is a

local

Concord

conractoreveloper

involved in

residential

and

commerc ia l

projects

includingmuamlyeve lopments re al es ta te and

subdivision

development

new

home

construction

and

property

management

Seeno

has been

known

to par tic ipate

in

local politics and has shown

its

support for local

politicians

4

S e e

UC

Berkley College of

Environmental Design 2 5

Distinguished

Alumni

Award

htp

e

eu

e

umend

sngushed

aum

awd

um

25

ko

ttached

hereto

a s

Exhibit J

S e e

Garaventa

Enterprises Websitehtpwwaavenaencomprintout from

which

is

attached

hereto

as Exhibit

K

6

S e e

Discovery Homes

Website

htpw scoveyhomescobouueenoprintout from

which

is

attachedhereto asExhibitL


7/40

JENKINS HOGIN LLP

February

2 6

Page 7

though

campaign

contributions Seeno was not contacted in

connection with this investigation

because

its involvement in

th e

matters addressed herein appears to be

peripheral

to

th e

focus

of th e investigation

Wllie

L Brown

Forme r Assemb ly

Speaker and San Francisco Mayor In 2 4

Mr

Brown was a registered lobbyist with the San Francisco

Ethics Commission Mr Brown is connected

to

Lennar s

Hunters Point

Project

throughGolden

Gate

Global formerly

known

a s San

Francisco

Bay Area

Regional Center

and was

Mayo r of San Francisco w hen Lennar was awarded th e

Hunters

Point

project

M

Brown

declined

to be

interviewed in connection with this investigation

B

Commencement o

f

Master

Developer

Selection

Process

Catellus

Lennar

Named as Finalists

In January 2 4 th e City commenced a n a rdu ou s threeatelection

process

in

order to

ultimately identify

a

M as te r Deve lope r

fo r

Phase I of the Concord Reuse

Project

Area

Plan

Project

The process was m anaged by

Mr Wright

and a team of

consultants consist ing of

Mr

Ramiza

Mr

Labadie

Mr

Silvern and Ms Chazan

The first part of th e selection

process

th e qualification

review resulted

in

submittals

by

over

22

development companies By March

2 4

theIcal

Reuse

Authority

LRA

was

presented

with

eigh t qualification packages

Following

an

independent

review

this

list

was

ultimately

reduced

to

four qualified

f irms recom m ended

by

staff

these

f i rms included Catel lus Development

Corporation

Catellus Lennar

7 See San Francisco

Ethics Commission Website

htp

e

com

u gh

obb

Z4

O

537 printout

from

which is at tached

hereto as

Exhibit

M

8 S e e Bographyom

ebsite

htpwogaphy

com

eope

ow

5printout from

which

is

attached

hereto as ExhibitN

9 Interview of Ms Valerie

Barone

and Interview ofMrWright

Also

s e e Exhibit B

2

S e e

Exhibit

B

Z

Interview

of

MsBarone

and

Interview

of

M

Bjerke

Also

see Exhibit

B


8/40

JENIQNS HOGIN

LLP

February

2 6

Page 8

Lennar

J

F

hea

Company

and SunCal Corporation SunCal While

Council

ultimately approved staffs

ecommendation

on

June

2 4 several Councilmembers

reported

receiving

criticism

principally

from

Seeno

that the Council was rubber

stamping

staffsecommendat ion B y

May 26

2 5Jh e a

dropped

out

SunCal

w a s

eliminated and

th e

list of four

was

narrowed to Catel lus and Lennar both of which

entered

into

Agreements

to

Negotiate

with

the

City

Agreement

The

identical

Agreements included

among

other things

a

prohibition on lobbying

betw een th e

developers and either the City Counci l Planning Commiss ion or

other

City employees

designated

by

the LRA Executive

Director

It was generally understood tha t th e Maste r

Developer selection

process

would culminate in

th e

recommendat ion of one

Mas te r

Developer

via

a staff report

prepare d by th e

LRA Executive Director and h is team

Negotiation

Team

C

N

tiaionsContributions and Closed

Sessions

On

or a bou t

April 22

2 5

Mayor

Grayson

arranged

fo r

a

one

on

neeeting

with

M

Brown

in

order to seek

advice

about his nascen

Assembly

campaign

M

Brown was aware of the pending

Project

however

according

to Mayor Grayson

th e

two

didnot

discuss

the

Master

Developer

selection

or

any

Project

specif ics

28

z z Interview of

Ms

Barone and Interview ofMr Silvern Also s e e Exhibit B

2 3

Interview

of Councilmember Leone

Interview

of Mayor Grayson a n d

Interview

of Councilmember

Hoffineister

2 4

Interview

of

Ms

Barone

Interview

of

Mr

Wright

Interview

of Mr

Grogan

a n d

Interview

of

Mr

Silvern

Also s e e

staff

report

from MrWright

to

th e City Council

regarding

Consideration and Approval

of th e Agreements to Negotia te Between

he City of Concord Local R e u s e

Authority

and Catellus

DevelopmentCorporation and 2

he

City

of Concord Local

Reuse Authority and

Lennar

Concord

LLC

dated

May 26

2 5 at tached

hereto

a s Exhibit

O

z s S ee

May

26

2 5

Agreement to Negotiate between

the

City of Concord a n d Catellus Section p a g e

9 and May 26 2 5 Agreement to Negotiate be tween the City of Concord and

Lennar

Section

page

9

Exhibit P

Z 6 Interview

of

Mr Bjerke Interview

of

Mr Grogan Interview ofMr Wright

and

Interview

of

Mr

Silvern

Z

Interview

of Mayor Grayson

Interview

of Mr

Wrigh t

and

Interview

of Mr G r o g a n

28

Interview

of

Mayor

Grayson


9/40

JENKINS HOGIN LLP

February

2 6

Page 9

On

June

5 2 5 Mayo r

Grayson

and Counci lmembers Birsan and Hoffineister

along with C ity s ta ff

attended a

special m eeting consis ting of

a

site

visit

to Catelluss

Muel ler Project in

Austin

Texas

Ms Rossi and

MrAntenucci attended

the site

visit

Mr Antenucci reports

that

at some

point during the site

visitMs Rossi

approached

him and suggested that it wou ld b ene fit C ate llu s to connect with local

thrd

arty

developers

in order to improve its chances of

being selected

a s

th e

Master

Developer

and

he

stated

tha t

sh e had

also communicated

th e s a m e

message to Lennar

While

staff

took

appropriate

measures

to

prevent

interactions

between

and

among

the

Councilmembers

side

conversations

of this kind

inevitably

took

place For instance

during

this site visit

Mayor

Grayson in passing

mentioned

his upcoming

Assembly

race

and according

to

Mr

Antenucci commented on

th e

difficulty of

r ais ing cam pa ign funds

within

earshot ofMr

Antenucci

Mayor Grayson denies mak ing th is

commen t

At some

time prior to June 6 2 5

Mr

Bonner

contacted Mr Bunting

to suggest

thatG

unting consider

mak ing

a contribution to Mayo r Grayson

s

ssembly

campaign

On

June

6

2 5

G

unting

donated

o

Mayor

Grayson

s

campaign

z 9 Interview of Councilmember

Birsan

Interview of Councilmember

Hoffineister and

Interview ofMr

Wright Also s e e

Minutes of the

June 5 2 5

City

Council site

visit

at tached

hereto

a s Exhibit

Q

3 Interview

of

Ms Barone Interview

of

Mr Bjerke Interview ofMayor

Grayson

and Interview ofMr

Wright

Also

s e e

Exhibit

Q

3 Interview ofMr Antenucci

3 2 Interview of

Mr Antenucci

3 3 Interview ofMrWright

3 4 Interview

ofCouncilmember

Hoffmeister Interview

of

MrAntenucci Interview

of

Ms Barone

and

Interview of Mayor Grayson

3 s

Interview ofMayor

Grayson

3 6 Interview ofMr Anetenucci

3 7 Interview ofMr Glenn Bunting

38

See

Campa ign

Finance

Information for

Grayson

For

State

Assembly

2 6

ht

cal

aces

ssa

o

magn

ommees

ap764esson

5eweceved

attached

hereto

asExhibit

R


10/40

JENKINS

HOGIN LLP

February

2 6

Page

On

June

7

2 5 Mayo r

Grayson

and Counci lmembers Birsan and

Hoffineister

attended

a

special meeting consisting of

a

site visit to Lennar l Toro Project in Orange

County

Ms

Rossi

was also present

at

th e site

visit

On June 8

2 5

Gunting donated

another

3

o Mayo r

Graysons

campaign

The total

amount do na te d

byGunting to Mayor Grayson

s

ssembly

campaign was4

he

maximum allowable contribution

to

individual candidates

for

the

Legislature

By the end

of

June

2 5

three

other entities

with ties to

Lennar

Scarborough Engeo

andM

Kay

each

donated4

to

Mayor Graysonsampaign

In July of 2 5 Catellus learned of the f oregoing campa ign

contributions

ftom an

unnamed source

On July 27 2 5 Mayo r

Grayson

and Counci lmembers Birsan and Hoffineister

attended a public tour of

Catellus

slam eda Landing

Development

On August

4 2 5 Mayo r

Grayson

and Counc i lmember

Hoffineister

attended a

public tour

of

Lennar

s

an

Francisco Shipyard Development Ms

Rossi

and Mr Buster

wee

also

in

attendance M

Brown

was

the

lead

presenter

At this tour

Counc i lmember

Hoffineister reports that Mr Bus te r a pp roa ch e d h e r

to

express

concern

over what

he

believed

to be inapp rop ria te p r iva te

meet ings between Mayor Grayson

and

MrBrown

3 9

S e e Minutes of th e June

7

2 5 City

Council

site visit attached here to a s Exhibit

S

o S e e

Exhibit

S

4 S e e

Exhibit R

4 Z S e e

Exhibit R

43

See Gov Code

853 et seq

S e e

Exhibit R

4 s Interview

of

MrAntenucci

a b

S e e

Minutes of th e July

27

2 5

City Council

site visit attached hereto a s Exhibit

T

4 7

Interview of Counci lmember

Hoffmeister

Interview of Mayor Grayson and Interview of

MrWright

Also s e e notes from the August 4 2 5 site

visit

at tached hereto a s Exhibit U

4 8 S e e

Exhibit

U

4 9

Interview ofMrWright and Interview of Counci lmember Hoffineister

Also s e e

Exhibit U

s o

Interview of Counci lmember Hoffineister It

should b e

noted

however

that

accord ing toMr Buster

he

was

no

present

a

the

Lennar

Shipyard

Tour

a

factconfirmed

by

the

noesfrom

the

Augus t

4

2 5

site


11/40

JENKINS HOGIN LLP

February

2 6

Page

In response to

a

question

raised

by one of th e Master Developer finalists on

August 3

2 5

Mr Wright s e n t an

email

to certain consultants working on the Project

requesting

tha t

they

disclose

any

ongoing contracts

with

either Catellus or

Lennar one of

these consultants

was

Mr Silvern In response Mr Silvern disclosed tha t

between

2 8

and

2 3HR

Asew

York City

office

provided services to Catel lus Mr Silvern

was

not involved

in this assignment

More

distantly in

the

99 sHRA

s

s Angeles

office

worked on an

economic

impact

a n a l y s i s concerning a Specific

Plan

for

property

around Union

Station in

Los

Angeles then owned by a

joint

venture

including

Catel lus

T he

property has since been

sold to

LA County

Metro Lastly

Mr Silvern disclosed

that theHRAew York office w a s

awarded

assignment by a

partnership

including

SunCal Mr Silvern

was not

involved in this project On August 4

2 5

Mr Wrigh t

considered

Mr Silvern

s

isclosures and concluded tha t

th ey did

not create a

conflict of

interest

On August 7

2 5

Catellus

received

a phone call

from an unnamed

source

stating

tha t

certain

of

Mayor

Grayson

s

ampaign

contributors

were

connected

to

Lennar

On or before August 9

2 5

according

to an emai l sent from Ms

Barone

to

Councilmember Birsan Mayor Grayson indicated to her tha t

he may

no t want

a

staff

recommendation

a s

to which

Master Developer

to select

visit attached hereto a s ExhibitUurthermore Mr Buster

denies

having eve r made a

comment

to

Counci lmember

Hoffineister

regarding Mayor Graysonseetings with Mr Brown

a t

all

s

S e e

E m a i l

from

Mr

Wright

to

Mr

S ilvem as well

a s

Shawn

Zovod

S t e v e

Rottenborn Mark

O

rien

Mr

Ramiza

and

Am y

He rman

about

COI

check sent

A ug ust 3

2 4 attached hereto

a s Exhibit V

5 2

S e e

E m a i l

f r om Mr S i lv e r n to Mr Wright r e g a r d i n g COI

check

s e n t A u g u s t

3

2 4

a t t a c h e d h e r e to

as

Exhibit

V

5 3

S e e

Email from Mr Silvem to Mr Wright regarding

COI check

s e n t August 3 2 4 attached hereto

as

ExhibitV

s 4 S e e Email from Mr Silvern to Mr Wright regarding COI check s e n t August

3

2 4 attached hereto

as

ExhibitV

s s

S e e

Email from Mr Wright t o Mr Silvem regarding COI

check

s e n t August

4

2 4 attached hereto

as ExhibitV

s b

S e e September

24 2 5 letter to

Ms

Barone from

Mr

Giacomini of

Hanson

Bridgett attached

hereto

as

Exhibit W


12/40

JEN IaNS HOGIN LLP

February 2 6

Page 2

On August 2

2 5 Catellussawyer

Mr

Andrew

Giacomini of

Hansen

Bridgett sent

a

letter to the Concord City Attorney requesting an investigation a s to the

campaign contributions Apparently Mr

Coon

refused Catellussequest to investigate

at

that

time

On

August 24

2 5

Mr

Wrigh t

sent a letter to both Lennar

and

Catellus stating

the deadline for presenting their last and best offer

to

the City

was

September 2 2 5

On

August 26

2 5 Mayor Grayson

returned the

campaign

contributions

from

GF

Bunting

M

Kay Engeo

and

Scarborough Mayo r

Grayson

later

delivered

to Mr

Coon a

letter from Jim

Sutton his private counsel on th e matter

concluding

tha t th e

campaign

contributions would

not

require

h is disqualification from th e Master Developer

selection

Between August and September

of

2 5 Mayor Grayson and Ms Rossi

m et

with

Mr

Brown

to

obtain

advice for

Mayor

Grayson

s

tate

Assembly

Campaign

5 7 S ee

Email

from Ms

Barone to

Mr Birsan regarding Deal

Points meeting

Lennar

a n d Catellus s e n t

August 9 2 5 at tached hereto a s Exhibit X

5 8

S e e Exhibit I

s 9 S e e

Exhibit W

b o S e e August 24 2 5

letter

from MrWright

to

representatives

of

both Catellus and Lennar

attached

hereto as Exhibit Y

6

S e e

Concord

Mayor Retums Donations Linked

to

P o s s i b l e

Weapons

Station

Developer

b y L i s a

P

White

printed in the Contra Costa T imes on

Sep tember

2 5

htp

wonracosames

co

oncod

c

874 5 7

oncodm

eunsonaonnke

possbeeaponsaonttached hereto a s Exhibit Z Additionally

s e e

Minutes of the September

2 5 City Council Meeting at tached hereto

a s

ExhibitAAand August 28 2 5 etter from

Mr

Jim

Sutton to Mayor Grayson at tached hereto

a s

Exhibit

BB

6 z On January l

2 6

Ms Christine

Cal lahan

counsel fo r Ms

Mary

Jo

Rossi

contacted

my colleague

Ms

Natalie Karpeles

and

indicated that

Ms Rossi

will not

voluntarily

participate or provide

an

interview

However

Ms

Callahan indicated that per

Ms

Rossi Mayor

Grayson

Wllie Brown and

Ms Rossi

met

one time in August of 2 5 and there

was

no discussion of either the Naval Base or campaign

contributions

63

Interview

of

Mayor Grayson


13/40

JEN IaNS

HOGIN LLP

February

2 6

Page 3

On

September

2 5 the

City

Council

m et

in

closed

session to discuss

th e

Mas te r

Developer

process and

th e then

urrenterm sheets

During

this

closed session

Mayor Grayson

raised a concern a s to whe th e rHR

A

and

Mr Silvern in

part icular had

a disqualifying conflict

of

interest

due

to

the

fact tha t

Catellus

wasa

past

client of

HR

A

Mayo r

Grayson

explained

h is

concern

to

m e

a s

follows Ia s

having

questions and in my

own

mind had developed questions

about

HRA

s

objectivity

and

I

was

doing my

own

research

This

research led

Mayor

Grayson

to

HR

A

sebsite

where

he

discovered

that

Catel lus

is

named

a s a

client

Th is

inform ation coupled with

his observations that

HRAeaned

more tow ards

Catellus than Lennar c a u s e d Mayor Grayson to

believe

that

there

w a s

a

preference

and

he

wanted to s e e whether there w a s

a n y

validity to that perception s o

he

did

his

own research

One of th e items d i s c u s s e d

during

this

c l o s e d

s e s s i o n

included

both developers

position on

affordable

housing

Prior to th e

conclusion

of th e

September

ls closed session Mr Wrigh t asked the

Council whe th e r or

no t it

wanted a recommendation

from the

Negotiation

Team in the

final

staff

report

it

w a s h is longstanding belief and that of other m e m b e r s of the

team

that the Council had directed the

t e a m

to

p r e p a r e

a

staff recomm endation

a s part of the

staff report

tha t

would

be presented

at

th e

conclusion

of the Master Developer se lection

6 4

Interview

of

Mr

Bjerke Interv iew

of

Mayor Grayson Interview

of Mr

Silvern

a n d

Interview

of Mr

Wrigh t

Also

s e e

Minutes

of

the September

2 5 City Council Closed

S e s s i o n

Meeting

attached

hereto

as

Exhibit

CC

b s Interview

of

Mayor

Grayson

6 6 Interview

of

Mayor

Grayson

6 7 Interview of Mayor

Grayson

6 8 Interview of Mayor

Grayson

6 9 Interview ofMayor

Grayson

7

Interview

of Mr Silvem a n d

Interview

of Mr

Wrigh t

Also

s e e

Exhibit AA

Interview of

Mr Wright

a n d Interview of

Mr

S ilvern A lso

s e e staff

report from

Mr Wright

to

the

City

Council regarding Report on Master Developer Term Sheets and Selection Process da ted September

2 5

attached

hereto

as

ExhibitDD


14/40

JENKINS

HOGIN LLP

February

2 6

Page 4

process

T he

Council confirmed tha t understanding a s reflected in the Closed

Session

Minutes of

Septemberl

5

There was a discussion

a s

to

whether

the City Counc il wished to haetaff make a

recommendation

in the

staff report

for

the

meet ing

on

September 29 when

the

selection will be

made

Ultimaeyh e councilmembers concluded tha t consistent

a

ith g e n e r a l c i t y policy

staff

s h o u ld m a k e a recommendat ion

Furthermore

it had been communicated to both Lennar and Catellus that there

would be

a staf f recomm endation

at the conclusion of the

negotiation

process

On

or a bout

September

2 5

eight

d a y s after the deadline imposed

on both

developers by Mr

Wright

to

provide the

Negotiation

Team

with

their

b e s t and final

offers Lennar sent

staff

an upda ted te rm sheet address ing

affordable

housing and

relenting

on its

prior insistence on obtaining

a commitment for

P h a s e

II

of

the Project

T he

proposed

modifications

to th e te rm

sheet

were

not

accepted

On September 6 2 5 th e

City Council m et

in closed session

to

discuss th e

Master Developer process and term sheets During th e

meet ing staff

answered

questions

r a i s e d

by Council during the

September

ls

c l o s e d

session and

presented

it

with a

draft

Interview

of

MrWright Interview

of

Mr Bjerke Interv iew

of

Mr Grogan Interview

of

Mr Silvern

Interview

of

Mr

Ramiza

Interview

of

MsChazan and Interview

ofCouncilmember

Brisan My

impression

w a s

that they

w e r e

going to

g i v e

a

recommendation there

wasn

t

vote on

it

I

felt that when

Wright walked ou t of th e room

that

there was going to be a recommendation

7 3

See

Exhibit

CC

italics

in

original

7 4 Interview

of

Mr

Wright

Interview

of

Mr

Bjerke

Interview

of

Mr Grogan and Interview ofMr

Silvern

7 5

Interview of MrWright Interview ofMr Silvern Interview of Mr Bjerke and Interview of

Ms

Barone

Also s e e

emai l from Suheil

Totah with Lennar

to MrWright regarding

affordable

hous ing sent on September 2 5

and

resulting

emai l

exchange between MrWright Mr Ramiza Mr

Silvern Mr Labadie and

Ms

Chazan be tween September and 2 5 attached hereto a s Exhibit

EE and

2

email from Matthew

Gray

counsel

fo r

Lennar to MrWrightMr Silvern Mr Ramiza

Ms

Chazan

and

M

Labadie

re

CNWS Lennar

Highlight Summa r y

9

5

tatus

on Requested

Items sent

on

Sep tember

2 5

attached

hereto as

Exhibit

FF


15/40

JENKINS

HOGIN LLP

February 2 6

Page 5

staff report disclosing staffs recomm endation of Catellus a s Master

Developer

At the

conclusion of this meeting the Negotiation Team

m e m b e r s

present Messrs Wrigh t

Silvern a n d Ramiza

u n d e r s t o o d

that

t h e y w o u l d p r e p a r e

a

final

v e r s i o n of

t h e

staff

r e p o r t

and th e Council

selection of

the

Master Developer would take

place on September

29

2 5

On

September

7

2 5

Mayor Grayson contacted M s

B a r o n e

regarding h is

concerns that

according to

an

unspecified source

Catellus w a s negotiating

with

S e e n o

and that

S e e n o w a s trying

to

gain control of the

project through Catellus

Specifically

Mayor Grayson

w a s concerned that the City did not h a v e

enough

protections

in

place

under the term sheet

to p re vent a

thrdatyeve loper from

gaining

control of the

Project during Phase2

On

September

2

2 5

in a mem orandum to Mr Wrigh t

and

Mr Coon prepared

in response to Mayo r

Graysons

bovetaedoncern

Mr

Ramiza concluded that

bothMaster Developerseminalists have agreed to

be

bound by a DDA tha t

only

allows transfers or

assignments

in certain

well

defined

limited

circumstances Bothseminalists term

sheets

allow a s

a

permitted transfer

transfers

to

affiliated

entities

and

vertical

developers

Lennar also includes a

provision allowing

transfers to

non

filiaed entities for

special

opportunities

Other assignments would

only be allowed

in

Citysole and

absolute discretion

7 6

Interview

of Mr

Wrigh t Interview

of Mr Silvem

Interview

of Mr GroganIm pretty s u r e

that

the

staff report

presented

to Council on th e 6 contained a staff recommendat ion that does no t shock m e

They

presented asem

ompete

version

because

we were ready to

go

Interview of

Mr Grogan

Interview of Mr Silvem and Interview of Mr Bjerke

7 8 S e e email

exchange

between M s

Barone a n d

Messrs Wright

a n d

Coon regarding Confidential s e n t

on

Sep tember 7 2 5 at tached hereto a s Exhibit GG

7 9 S e e

Exhibit

GG

8 S e e Confidential M e m o r a n d u m

f r om

Mr

R a m i z a

to M e s s r s Wright

a n d

C o o n r e g a rd in g Transfer

a n d

Assignability under

Master

Developer DDA and Term Sheet September 2 2 5 attached

hereto

a s

Exhibit

HH


16/40

JEN IaNS HOGIN LLP

February

2 6

Page 6

Ms Barone and

Mr

Wright

both

stated during

their

interviews

their opinions tha t

Mayor Graysonsoncerns

were

unfounded a s Catel lus

a

p riva te ly he ld corporation

would

not be

susceptible

to

a

takeover

Mr

Antenucci categorically

denies any

involvementwith

Seeno

On or

abou t Septembe r 22

2 5 Ms Barone instructed MrWright to remove

th e

staff recomm endation

from the final

staff

report Mr Wright told me that h e reported

this instruction to

both finalists

to Catellus by way of an emai l to MrAntenucci and by

telephone to Lennar

On or

about September

23

2 5

Mr Coon

received

a

telephone message from

Mr Giacomini

inquiring why

th e City will

no

longer

provide a

staff

recommendat ion in

th e f inal report

Upon

inquiry Ms Barone explained

to

Mr

Coon

tha t th e removal of

th e staf f recomm endation w a s

her

decision albeit she took input

from

Council Later

tha t day the staff

report w a s

released

to

th e

public

without

a

staff recommendation In

response

Mr

Giacomini told

Mr

Coon that

Catellus

had

authorized

him

to

transmit

a

letter

to

the Ciry raising concerns

about

the Maste r Deve loper se lection process

according

to

Mr Giacomini Mr Coon endeavored

to p ers uade

him not

to

send the

letter

Mr

Wright sim ilarly at tempted to persuade

Mr

Antenucci not to

send th e

letter

ou t of concern

tha t

it

would derail

the selection process

In

a memorandum

da te d September 24

2 5

following

h is investigation

Mr

Coon revealed to

Council

thatHRAad also worked with Lennar between 2 3 and

2 4

These facts coupled with

th e

information that Mr Silvern presented to Mr

8 Interview

ofMr

Antenucci

8 z

S e e

emai l

exchange between

Ms

Barone and Mr Helix regarding Closing th e Loop sent

on

September

22

2 5

attached hereto

a s

Exhibit

II

8 3

S e e email exchange between

Mr

Coon

and Ms Barone

Mr

Wright and Mr

Bjerke regard ing

Telephone Call fromCatellus

sent

on Sep tember 23 2 5 at tached hereto a s Exhibit J J

8 4

S e e Exhibit J J

8 5

S e e email

exchange between

Mr Wright

a n d

Ms

Laperchia

regarding

9

95

taff

Report

s e n t on

Sep tember

23 2 5 at tached

hereto a s Exhibit KK

8 6 S ee email to Mr Coon from Mr Silvern regarding Urgent Need

Contact Info o n

Any Catellus

a n d

Lennar Contects sent

on

September 2 2 5 and emai l from Mr Silvern

t o

Mr Coon regard ing COI

Check

sen

Sep tember

2

2 5

attached hereto as Exhibit

LL


17/40

JENKINS

HOGIN LLP

February

2 6

Page 7

Wrigh t in Augus t ultimately

led

Mr Coon to conclude tha t Catellus and Lennar

were

basically

on

equal

footing in their relationship withHR

lvern

nd th ere is no

credible explanation a s to why Cate llus wou ld

have

been p re fe rred over Lennar a s

a

prospective

future client

and therefore

favored

in the

Maste r Deve loper

selection

process As such no confl ict of

interest

h a s at

a n y

time

existed betweenHRAau

Silvern and the

City

o f Concord nor h a v e they e n g a g e d in

a n y

conduct

s u g g e s t i n g

favoritism of Catellus over Lennar in the Master

Developer

selection process

D

September 24 2 5 Hanson Bridgett Letter

T h e H anson Bridgett

letter

signed by Mr Giacomini

asserts

tha t Lennar violated

the terms of the Agreement to Negotiate by lobbying the

City

Council Specifically the

letter contends

tha t Lennar attempted to inf luence the Maste r Deve loper

selection

process

and thus

violated

Section

of the Agreement to N eg otia te in the following

ways

Orchestrating campaign

contributions to

Mayor Graysonsssembly campaign

in an effort to curry h is favor and influence his

vote

on the Master Developer

selection

2 Engaging

Mr

Brown to lobby

Mr Grayson

in support

of

its proposal and

3

Influencing th e Ciry

to

remove

a

staff recommendat ion from the final staff

report Included w ith in

this

contention is an

allegation tha t

the

City Council

engaged in a serial

meet ing

in

violation

of

th e

Brown

Act

E

Sebtember

27 2 5

Lennar Response Letter

and

Refusal toCoorae

Following

th e Cityseceipt of the September 24 2 5

Hanson Bridgett

letter Mr

Bonner transmitted a

letter categorically denying any

wrongdoing without addressing

any

S e e

Confidentia l Mem orandum from Mr Coon to City

Council

regarding

Concord

Reuse

Project

Alleged

Confl ict of

Interest

Involving ConsultantHRAdvisors September 24 2 5 page 5

attached hereto as ExhibitMM

88

Se e

Exhibit

MM


18/40

JENIdNNS

HOGIN LLP

February

2 6

Page 8

specific allegations

made

by

M

Giacomni

Mr Bonner

states

that

Lennar

will

cooperate

in

the

Citys

fforts

to

evaluate

Catellus

claims

When

contacted in

connection with this investigation

in

December 2 5 Mr

Bonner

and h is associa tes

declined to be

interviewed

and elected to

limt

Lennar

s

participation

in

this

investigation

to

letters from

its

attorney

David

Marroso of

O

elveny

Myers

The

Bonner

letter also

states tha t

we

rust tha t a s part of

this

effort

th e

City

will also

evaluate whether Catellus has

engaged

in

improper

activities including activities

in

breach of its

agreement

with

the

CtyThe

letter does not allege any specific

wrongdoing

by

Catellus

This

report

addresses those allegations

concerning

alleged

Catellus wrongdoing tha t have

been

b rou gh t to my attention

during

th e course of th e

investigation

F

September

29 2 5 Meeting with

Catellus

Following the receipt of th e Hanson Bridgett letter Ms Barone in consultation

with

th e

City

Attorney

Mr

Wrigh t

and Mr

Ramiza cance lled

the

September

29

2 5

scheduled

public

hearing Staff

was ext remely

frustrated that Catellus

had

chosen

to

have

it s

lawyer send th e

letter

and derail the selection process Mr Wright suggested

a

meeting with

Catel lus

th e meeting was held

on

September 29 and included Ms

Barone

Mr

Wright

Mr Bjerke Mr Coon

and

Mr Antenucci along with other officers

of

Catellus

Staff hoped that th e

meet ing

might

allay Catelluss

oncerns

so

that th e

process could

move

ahead without further delay Following th e meet ing it

was

clear to

staff tha t Catelluss

llegations

would

require

a more formal

response

8 9 S e e September 27 2 5 letter from Mr

Bonner to

Ms Barone

attached

hereto a s Exhibit NN

9 S e e

Exhibit

NN

9

Interview ofMrWright

9 2

Interview ofMrWright Interview ofMr

Ramiza

and Interview of Mr Silvern



9s

Interview of

M

Wright


19/40

JENKINS

HOGIN LLP

February 2 6

Page

9

G

Lenna

r

r Kav and MrNaranio Respond to Catellusslaims

In

a

letter da ted December 24 2 5 Vigo

Nielsen

counsel

fo r Mr Kay

and

Mr

Naranjo replies to the Catellus allegations on behalf of h is

clients

a s follows

l

nder

California law there is a

clear diff erence between

lobbying

and

mak ing a

campaign contribution and that under California state law there

can

be

no

doubt

tha t

making a

campaign contribution is entirely

different

from and exclusive

of engaging in discussions negotiat ions or lobbying of

Concord off ic ia ls

as stated in

Section

of th e

negotiation

agreement

2

Mr

Kay made a

personal

contribution to

MayorGraysonsampaign

he

did

not

attend

any fundraising

events

fo r

Mayor Graysonsssembly Campaign

nor

did

he

meeo

communicatewith

Mayor

Grayson Additionally

Mr

Kay

did

not communicate at

all with

any Concord

Councilmembers

Plann ing Com m iss ioners

or

any

other Concord

officials

3

Mr Naranjo made a

personal contribution

to

Mayor Graysons

ampaign

Furthermore

he

did not communicate on any subject with Mayor Grayson

any of th e

Concord City

Counci lmembers

Planning Comm issione rs o r

any

other

Concord

City

Official

MrNielsensesponse does not indicate whetherMr Kay or Mr Naranjo h ad any

communications with Lennar re ga rding th e contributions and

specifically

whether

anyone acting on behalfof

Lennar so licited

them

In his letters of January

6

7 and January 25 2 6 on beh alf of Lennar Mr

Marroso replies to

th e

Catellus allegations a s follows

Lennar has not given any money to the Committee fo r Counc i lmember

Tim

Graysonsampa ign

fo r State Assembly

even though it

would not

9 6 S e e

December

24 2 5 etter from Vigo Nielsen

to

Mr Jenkins

attached hereto

a s Exhibit

9 7 S e e January 6 2 6 etter from Mr Marroso

to

Mr Jenkins

attached

hereto a s Exhibit

PP

98

See

January

25

2 6 etter from

MMarroso

to

M

Jenkins

attached

hereto

asExhibit

QQ


20/40

JENKINS

HOGIN LLP

February

2 6

Page 2

have

been

improper

to do

so

has not

given

money

to

others

to contribute

to

Mr Graysons

ommittee and has not

pressured or coerced anyone

to

contribute

money

toit

9

2 None of the individuals or entities tha t contributed to

Mayor

Graysons

campaign

commun ica ted

with Mayor Grayson

about

th e

Concord

Naval

Weapons

Station

3 As

a

matter of law

c

mpaigncontributions a r e not

forbidden

by

or

even

ment ioned

in Section

or anywhere

in

the

Negotiating

Agreement

Nothing

in th e Negotiating Agreement

purports to a bridg e Lennar

sr

anyone

else

sirst

Amendment rights

4

Mr

Marroso describes Lennar

s

elationship with

th e contributors

a s

follows

a

G

unting

is

a public

relations

f irm th at

does work fo r

many

companies on a multitude of projects

across

the country including

LennarCorp

b

Mr Kay is an attorney ofwhom Lennar is one ofmanyclients

c

Engeo

is

a prominent engineering firm that

has worked

with

Lennar in

th e past

d

Scarborough

is

an insurance firm

which Lennar has not

engaged or

contracted with in any capacity

9 9

S e e Exhibit PP emphasis in original

io o S e e

Exhibit

PP

lo S e e Exhibit QQ

io z S e e Exhibit

QQ

l 3 S e e Exhibit QQ

l 4

Se e

Exhibit

QQ


21/40

JENKINS

HOGIN LLP

February

2 6

Page 2

5

Lennar did not d i s c u s s the Master

Developer

selection p r o c e s s with

Mayor

Grayson throughMrBrown

Mr

Marroso

s

etter does not

deny that

Lennar so lic it ed

th e contributions nor

does

it confirm or deny whether Lennar s p o k e to Mr

Brown

about the Master

Developer

selection p r o c e s s and whether t h o s e conversations

included

d i s c u s s i o n s about campaign

contributions

II

What is Lobbvin within the Meanin of Section

T he

architect

of th e Maste r Deve loper se lection process

was

Mr

Wright who

assembled a

team of outside

consultants to

negotia te term

sheets

with the

tw o

finalists

and

to

recommend

the superior

proposal

to the Ciry Council Mr Wrights

ntent

w a s to

create a p r o c e s s that would

yield

the

objectively superior

proposal

without

political

interference

in

essence

a

decision tha t

would

be

made

strictly on the mer its of the

two

proposals

T o

this

end

and

in

response

to concerns

tha t

th e

finalists

m ig h t a ttemp t

to

influence

th e decsonakersMr

Ramiza drafted

Section

to

the Agreement

to

Negotiate which reads as follows

Lobbying Prohibition

Developer a g r e e s and acknowledges

tha t

the

Preliminary Stage

and

DDA

Stage

negotiations s ha ll ta ke place with th e LRA

Executive

Director

th e

City

sega l f inanc ia l and planning advisers and such other City parties a s

m ay be

designated

by

th e LRA

Executive Director from tim e to t ime

collectively

the

Ctyesignated

Team

Developer

shall not engage

in

discussions

negotia tions or lob bying of

any

City Council or P la nning

Comm ission members

or other City employees or

officials

a s

may be

designated by the

LRA

Executive Director

from time

to

time

collectively

Excluded

City Parties unless

requested

to

do s o

by the

Ctyesignated

Team for specif ic purposes related

to

th e negotiations Nothing

in

this Section

shall preventiesponses

to

requests for

information

from one

or

more

Excluded

City Parties

provided such

responses are dire cted to th e City

Designated Team

iiDevelopers articipation in

any

questionandnswe

tos

Se e

Exhibit

QQ


22/40

JENKINS

HOGIN LLP

February

l

6

Page

22

s e s s i o n s workshops o r

t o u r s

a p p r o v e d

in writing b y

t h e

Cryesignated

Team o r

iii

Developersarticipation in p u b l i c e v e n t s o r

community

f o r a a t

which o n e

o r

m o r e E x c l u d e d

City

P a r t i e s a re present p r o v id e d D e v e lo p e r d o e s

no t engage in communications with such Excluded City Parties at such events

that

ae

intended

to

influence the

Prel im inary

Stage

or

DDA

Stage

negotiations In the event of

Developer

siolation of its obligations under this

Section

City

m a y immediately

terminate

this Agreement by written notice

to

Developer without

affording

Developer

a n y opportunity to c u r e such

vioation

The

key

p h r a s e

in Section i s

that

neither

developer

shall engage in

discussions

negotiations or lobbying of

a n y City

Council o r Planning Commission members or

other

City e m p l o y e e s or

officials a s

m a y b e designated by the LRA Executive

Director from t ime

to

time

There

is no

definition

of

the

word

lobbying

in

the

Agreement

Section 8

states tha t

th e

Agreement shall

be construed

in

accordance

with

th e

laws of the State of

Caiforna

The

California

Civil

Code governs the

interpretation

of

contracts

Section 644 of tha t Code

provides

tha tt

ewords

of

a

contract a r e to

be understood

in their o r d i n a r y a n d p o p u l a r s e n s e r a t h e r than

a c c o rd in g to

strict

l e g a l

meaning U n l e s s

u s e d b y the p a r t i e s

in

a technical s e n s e o r

u n l e s s

a s p e c i a l m e a n i n g i s g i v e r i

t o t h em

b y

u s a g e

in which c a s e

t h e

latter

m u s t

b e

followed

The paramount

r u l e

in interpreting

a

contract

is to g ive effect to

its true intent

T he

i s s u e

tha t

a r i s e s here is whether

Section

was intended

to u s e

the word

lobbying

in

i t s o r d i n a r y

s e n s e

defined b y

Merriamebser

s influencing government

decisions and by

dictionaryoms trying to in fluence public

officials

or whethe r it

intended

to

use

it

in

the

technical

sense found in

Government Code

87

aka the

Political

Reform Act where campaign

contributions

a r e excluded f rom the definition of

lobbying

In their letters both Mr

Nielsen

and Mr Marroso contend that

th e

interpretation of

Section

is controlled by th e

Political

Reform Act

As explained to me by

the

authors of the Agreement the purpose of Section

w a s to advance Mr Wrights

oal of precluding

the

f inalists from

influencing

decision

makers

by m e a n s other

than

the merits

of their

proposals

In

other words to insulate the

lob

See Califomia

Cvil

Code

636

64


23/40

JENKINS HOGIN LLP

February 2 6

Page

23

decisionakers

f r om

o u t s i d e i n f l u e n c e s

w h a t e v e r

t h e y m i g h t

b e o r h ow e v e r

t h e y m i g h t

be

conveyed

In drafting

this

section Mr Ramiza advised m e tha t he used the

word

lobbying

a s it i s

c o m m o n ly u n d e r s to o d

in

t h e E n g lis h l a n g u a g e

not in i t s

technical

sense

Mr Ramizasnderstanding of the lobbying prohibition i s that it intended to

p re c lu d e a n

enduny either finalist directly o r indirectly

t o

the decisionakersThe

w o r d lobbying

in

Section

i s

l i s t e d with

discussions a n d negotiations

two other

v e r b s s u g g e s t i n g t h a t

th e

f i n a l i s t s

a re to

a v o i d

a n y a c t i v i t y

t h a t m i g h t

b e

p e r c e i v e d a s

attempting

to

influence the

decson

akes

T he

exclusion of campaign contributions

i n t h e P o l i t i c a l R e f o r m Act h a s n o b e a r i n g o n S e c t i o n if

th e

d o n a t i o n o f c a m p a i g n

contributions w a s

meant

to influence Mayor Grayson then the contributions violated the

lobbying prohibition

According

t o Mr

Wright a n d

Mr

Ramiza both d e v e l o p e r s u n d e r s t o o d t h i s

ordinary

meaning

of

the

lobbying

prohibition

in

Section

Nei ther developer

q u e s t i o n e d

i t s meaning nor

d id th e y a t

a n y

t i m e a s k whether t h e word lobbying w a s t o

b e

i n t e r p r e t e d

in

a

t e c h n i c a l

s en se o r

to e x c l u d e

a c t i v i t i e s

s u c h

a s

m a k i n g

c a m p a i g n

donations

H a d t h e y

not u n d e r s t o o d

t h e

prohibition both d e v e lo p e r s h a d a m p le

opportunity to

ask City

staff

fo r

clarif ication

indeed

communicat ions

between Mr

Wright a n d

Mr

R am iz a a n d

t h e r e p r e s e n ta t i v e s

of

t h e

two d e v e l o p e r s w e r e

continuous

a n d

n u m e r o u s

during

t h e t im e

period following

t h e

execution of

t h e

Agreements

I

reject the argument that the lobbying prohibition in Section

excludes

campaign

contributions

It is fair to conclude tha t the agreement bound both Catellus

a n d Lennar

t o

refrain f r o m e n g a g i n g in a n y d i s c u s s i o n s

n e g o t i a t i o n s

o r a n y other a c t i o n s

i n t e n d e d to i n f l u e n c e

a n y C i t y

C o u n c i l o r P la n n in g C o m m is s io n m e m b e r s o r o t h e r

C i t y

employees

or

officials

A

Do

the

Contributions

to

Mavor Crravsons

a

agn

Constitute

Lobbving on Behal f

o

fLennar

P r i o r t o

J u n e 6 2 5

Mr B o n n e r

contacted

Mr

Bunting

t o

s u g g e s t thatGF

Bunting c o n s id e r m a k in g

a

contribution t o Mayor

Grayson

s s e m b l y campa ign

Mr

Bunting

thereafter

arranged

for

his

company

to

make

the contribution as an

Interview of

M

Glenn

Bunting


24/40

JENIQNS HOGIN LLP

February

2 6

Page

24

accommodation

to Mr Bonner something h is company d o e s for its

clients

from

time

to

time

Shortly

thereafter Mayor

Grayson a l s o received

contributions for the

maximum

a l l o w a b l e

amount f r o m

Mr

Kay Scarborough

a n d

Engeo Mayor

G r a y s o n a s s e r t s

that

h e w a s u n a w a r e

of

t h e s e

contributorso n n e c t i o n s with Lennar

a t t h e

time

t h e y

w e r e

m a d e

and

until

that connection w a s

m a d e

public

In

light

of the

direct

evidence

that M Bonner

solicitedGF

Buntings

contribution

a n d

d i s c u s s e d Engeo

s

ontribution with Mr E lia hu it

i s m o r e

likely than

not

that h e o r

s o m e o n e

a c t in g o n

h is behalf

a l s o

s o l i c i t e d

t h e

contributions f r o m

Mr

K a y

and Mr Naranjo neither

of

t h e s e donors

h a v e a n y known

connection with Concord or

with

Mayor

Graysonsampaign a s i d e

from

their connections with

Lennar

Our review

of

campaign

contribution

records

with

the

Secretary of

State indicates tha t ne ithe r h a s a

history

of

contributing

to

local

campaigns

in

Concord

Lending

further support to this

conclusion

is the

carefully chosen language

in

Mr

Marroso

swo

letters on

behal f

of

Lennar

Mr

Marroso states in connection with

this

issue that Lennar neither coerced

these

contributions

nor

reimbursed

the

contributors

Aware as

he

was

of

this

investigation

s

nterest

in the genesis of these contributions Mr Marrososetters

conspicuously do

not

deny

that Lennar so lic ited

th e

contributions

Additionally Mr Marroso concludes that

because

the Political Reform Acts

technical definition of the term lobbying excludes campaign contributions Mr Bonner

could h a v e directly contr ibuted to

Mayor

Grayson ampaign in e x e r c i s e of h is First

Amendment r ights

and

without violating th e terms of

Section

l However Mr Bonner

c h o s e

not t o d o

so

but i n s t e a d s u g g e s t e d

that

GFunting and likely

Mr

K a y

a n d

Scarborough contr ibute to

Mayor

Grayson ampaig n GivenMr

Marroso

onfidence

8

Interview of Mr Bunting

l 9

Uri

Eliahu CEO of Engeo stated that

h is

company w a s founded in

Concord

a n d is

still local

a n d h a s

an

interest

in local politics

He

said that

his company

routinely makes political contributions and that th e

contribution

to

the

G r a y s o n

campaign

w a s h is i d e a

a n d not

prompted

b y

a r e q u e s t from

Lennar Mr

Eliahu stated that b e f o r e mak ing the contribution h e a s k e d Mr Bonner whether the latter thought the

contribution

would

g e n e r a t e any

problems

a n d w a s told

it wou ld

not E n g e o

provided a

list

of

i t s 2 5

political and

charitable

contributions that

included several

campaign contributions to candidates

fo r

State

and local offices

in the Concord

area

ll o Mr Nielsens

e c e m b e r

24

2 5 letter c o n f i r m s

that

M r

N a r a n j o

a n d

Mr K a y

h a d n o

involvement

with

the

City


25/40

JENKINS HOGIN LLP

February 2 6

Page

25

that

Mr

BonnerInna

ould

h a v e contributed

directly

one

could

reasonably

infer

that

Mr

BonnerInna

ither knew or suspected that the provisions in Section would

have

precluded such

conduct

or at least that a direct contribution would

have

cast a

negative

light

onLennar

s

participation

in

the

selection

process Aside from that

Mr

BonnerInna

ould have

foreseen

that

th e

contributions m ade at their behest would

h a v e

pu t

Mayor

Grayson

in

an

awkward

position when they

c a m e to light

Lastly both Mr

Nielsen

and Mr Marroso conclude tha t campaign

contributions

iobbying

in

the technical sense constitute a

form

of s p e e c h

protected

by the First

Amendment to the Constitution

however

this is beside the point T he

i s s u e

here is no t

whether

the

contributions

wee

constitutional

but

whether

t hey

were

made in

contravention of

a

contractual provis ion to which Lennar

voluntarily

chose to be

bound

A party may voluntarily agree to

waive

constitutional rig h ts in order to

participate

in

the

process

leading

up

to

the

award of

a

conract

Some cities

preclude campaign

contributions

by

entities

actively

bidding

on

city

contracts

In

this

instance

both

Lennar and

Catellus

a g r e e d a s a

condition

of participating in the selection p r o c e s s to

a llow the ir applications to be decided on the merits

and

to

avoid any

efforts to inf luence

decsonakesThe

first

amendment

claims

ae a red

herring

The

issue

here

is

whether Lennar

acted

contrary to

th e

Agreement

Two possible

conclusions m ay be

drawn

from Lennar

solicitation of

these

campaign

contributions

The first is that Lennar orchestrated the contributions

anonymously

magnanimously

without any

expectation

of receiving

anyth ing in

return

T h is w ould be

consistent

with

Mayor Graysonsnsistence

tha t he w a s

unaware of the

Otherwise referred to a s

payto

ayaws

a

growing number of s t a t e s

a n d

municipalities

h a v e

enacted

m e a s u r e s

limiting

or prohibiting campaign

contributions from p a r t i e s

bidding for

a

prospective contract

with th e City For

instance

th e City

of Los

Angeles prohibits

a

person

who

bids on

or

submits a

proposal

or

other response

to

a contract that h a s an anticipated

value

of

a t least

nd requires

approval

by

th e

elected

City

office

that is held

or

sought by th e person

to

whom th e contribution would

b e given

from

making campaign

contribution to th e

Mayor

th e

City

Attorney th e

Controller

or a

City Council

membe r Los Angeles City Charter

section 47

c

2B

h e City

of L o s

Angeles takes

th e

provisions of its Charter one

step fu r ther

and

incorporates section

47

c2

into

every

contract

solicitation

a n d additionally

requires prospective

b i d d e r s

to supply the

n a m e s

of their

a g e n t s

or principals

to

ensure

com pliance

with section

47

c2

Los

Angeles City

Charter

section

47c2H


26/40

JENIQNS HOGIN

LLP

February 2 6

Page

26

relationship

between

the contributors

and

Lennar until

th e i s s u e

w a s b rou gh t to l ight by

the

press

and

by Catellus

The

al te rnative conclus ion

is that Lennar certainly orchestrated

one

and possib ly

three

contributions

with the specif ic intent of generating

goodwill

with Mayor Grayson in

order

to

enhance

its

position

in the

Master

Developer

selection

process

The

contributions

were

not

token

donations they

were

in th e

maximum amo unt

allowed

by

law T he contr ibutions m aterial ly assisted Mayor

Grayson

to

demonstrate

his fundraising

p r o w e s s

e a r l y

in

t h e

campaign

p o s s i b l y

g i v i n g h im

a n

a d v a n t a g e

o v e r

h is

competition

The re is no

evidence

that Lennar and Mayor

Grayson

collaborated in

th is e ndeavor

or

tha t

Mayor

Grayson was even aware of it at the time Nevertheless the fact tha t Lennar

concealed its

involvement

by using at

least one

proxy to donate at

least one contribution

to Mayor Grayson ampaign s u g g e s t s

a

clandestine

effort

to advance its interests in the

selection

process

whether

or

not it

actually

did

so

Regarded in that way

th e

contributions would constitute lobbying within the meaning of Section

Mayor Grayson s u g g e s t s

tha t h is return of

th e

contributions

on

August 26 2 5

establishes that no

wrongdoing

occurred

T he

relevant

inquiry

however

is why the

contributions were

made

in

th e

first

instance not

whether

t hey

were

retained

B

Did th e

Meetin

s

etween

Mr Brown and Mayor Grayson Constitute

Lobbvin on Behalf of Lennar

Ca te llu s conte nds that Mayo r

Grayson

m et with

Mr

Brown on

numerous

occasions

and

tha t Mr Brown

ostensibly

lobbied

Mayor Grayson

on behal f of Lennar

It

is

establ ished

that

Mr

Brown has a

longstanding relationship

with

Mr

Bonner going

back at least to when

Mr

Bonne r wo rk ed fo r

Mr

Brown and bus iness connections with

Lennar

and

tha t Mr Brown is a

registered lobbyist

in San Francisco

When

Mr Brown

was Mayor of San

Francisco

he favored Lenna r to serve a s Master Developer of the San

Francisco

Shipyard project

despite

a contra ry s ta ff recom m endation

in

favor

of

another

developer

Mr

Brown

appointed the selection

committee

tha t

chose Lennar

a s the

Master

Developer

for Treasure Island

From these facts Catel lus concludes that

Mr

lz Interview of Mayor GraysonIad many contributions come in within

a

very

short

period of t ime and

there

wassome

quick fundraising taking place

tomee

adeadline

for

Sacramento


27/40

JENIQNS

HOGIN LLP

February

2 6

Page 27

Brown

had obvious motivation and opportunity to lobby Mayor Grayson

but Catellus

h a s

no evidence tha t Mr Brown

engaged

in such lobbying

Mayor Grayson

states

tha t

he

initiated contact with Mr Brown exclusively to seek

political advice

regarding

h is

Assemb ly campa ign

in

view

of Mr

Brown

s

xtensive

political

experience and network

Mr

Brown

solitical expertise

is

wel

nown and

this

is

a

perfectly plausible reason for Mayor Grayson

to

seek Mr Browns

ounsel

According

to

M

Grayson

they

met

twice

once in April

and

again in August of

2 5

the

second

time

with Ms

Rossi

and th e

two neve r discussed

the Master Developer

selection

process

The concerns

raised

by

Catellus

ae

purely

circumstantial

While Mayor

Grayson ecision to

kick

off

h is

campaign during the Master Developer selection p r o c e s s

seems

entirely

coincidental

Mayor

Grayson

could have known of M Browns

connections to Lennar if no t the totality of those connections

He

certainly would have

had

some awareness

of

th e relationship

a s a

consequence

of

the

August

4

San

Francisco

Shipyard tour

which

was

led by

Mr Brown and of the possibility

tha t

meeting privately

with Mr Brown m igh t create the appearance of im propr iety during the Master Developer

s e l e C t i o n

process Nonetheless the investigation

resulted

in no evidence

to

contradict

or

to corroborate

Mayor

Graysonsescription

of

the

meetings

There is no basis to

conclude

that

Catellussuspicions have merit

C

The Le tte rs in Support of Lennar po Not Consti tute Lobbving on

Behal

fo

Lennar

In late September in

anticipation

of th e schedu led September 29 2 5 public

hearing on

the

selection

of

a

Master Developer the City

received numerous le tte rs

encouraging th e Council

to aw ard

the

contract to Lennar Some

of

these letters

were

local but

many

were

authored

primarily by San Franciscoasedntities companies and

Interview

of

MrWright When

we took

the Counci lmembers

to

Huntersoint Willie Brown

was

there

holding court During Brown

s

resentation he talked

about how

during

his tenure

a s mayor

h e

had done

things fo r th e neighborhood and how he had

worked

with

affordable

housing advocates and

worked closely

with

Lennar

during

this process

and l iked Lennar

la

Interview of

Ms Barone

and

Interview

of

M

Bjerke


28/40

JENIdNNS HOGIN LLP

February 2 6

Page

28

persons who had no connection with Concord but who had some relationship with

Lennar For instance

th e

executive director of the

Fami ly

Justice

Center

contacted Mr

Bjerke and informed h im th at

he was

asked

to write

a

letter in support of Lennar and

asked

whether such letter would

be

appropriate It is unclear why the Family Justice

Cente r would have

any m otivation

or reason to

care who was ultimately selected

a s

Master

Developer

for the

Project

It is obv ious f rom

th e

timing similar

content

and

identities of the authors of the letters that Lennar orchestrated them Ms Barone recalls

asking Mr

Coon

if such endorsements

consti tuted lobbying

and

he

opined tha t they

were

merely

a

form of

public comment Lennar

did not ask Mr Wrigh t if such endorsements

would

be

permissible

under Section

prior to

arranging

fo r their delivery

The endorsement letters

unquest ionably

were

intended

to

influence

the Council

However a s

th e Ciry

Attorney noted at

th e

time they

were

delivered to

th e

Council a s

part

of and within

th e

f ramework

of th e

public process

establ ished fo r consideration of th e

two

proposals Unlike

th e cam p aig n contributions

which

were

made

ou ts ide th e

f ramework

of

th e

process

th e letters

were

not

directed

to

a

single

Counc i lmember

with

the

potential expectation

of

garnering

favor

Additionally

th e le tte rs were

subject to

rebuttal a the

public

hearing

Section

intentionally

reserves fo r

the deve lopers the

ability to

participate

in

th e

public process to

their own

advantage

This only makes

sense

Thus there

ae

material

differences between the

two

activities

While

the letters are

a

form of

lobbying

in th e broadest sense it is m y

conclusion tha t

they

were

not proscribed

by Section

D

Allegations

tha

t

a te llu s Lobb ied Citv

Staf

f

bv Offerin

Them

Tickets

to

Golden State WarriorsPavOfames

In an

emai l to Ms

Barone

Mayo r

Grayson quest ions whether

Catellus

an

affiliate

of Catellus or someone connected

in

any way to Catellus purchased or

report: concord naval weapons station

Documents