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Lawsuit Alleges Mayor Broke Public Disclosure Laws, Didn’t Report Income

On Wednesday Santa Clara Law University School student Brian Exline filed a lawsuit against Mayor Lisa Gillmor alleging that Gillmor violated California’s public disclosure laws by not reporting her interest in a Gillmor family business from which she received income, Public Property Advisors, Inc. (PPA).

The company provides brokerage and property management services to local school districts and has been described as a division of Gillmor & Associates. PPA’s clients include Alum Rock Union Elementary, Union, and Pleasanton Unified School Districts as well as San José Evergreen Community College District. PPA is also the property manager for the Santa Clara Teacher Housing Foundation’s Casa de Maestra, Santa Clara Unified School District’s teacher housing program.

Gillmor denies that she concealed economic interests and called lawsuit is a “political hit” by those who “don’t like the reforms we’re making” in a text to the Mercury News, which broke the story.

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The plaintiff’s attorneys, San José-based McManis Faulkner, have determined that Gillmor received significant amounts of money from the business, according to attorney Ann Ravel, a former U.S. Federal Election Commission chair and California Fair Political Practices Commission (FPPC) chair.

All California elected and some appointed officials are required to file reports of their financial interests every year — the Form 700 — to shine a light on potential conflicts of interest. Any source of income over $500 must be reported. If the income is a proportion of the income of a business, that must also be reported if it’s $10,000 or more.

Exline filed a complaint with Santa Clara County District Attorney Jeff Rosen’s office in July, but the DA declined to pursue it.

 

Sometimes She Is, Sometimes She’s Not 

Gillmor has had different titles with PPA over the last 25 years, but she has reported receiving income from it in the past.

In 1994 then-City Council Member Gillmor told the FPPC that she received a salary from PPA, but said that it wasn’t dependent on the business’ revenue. That year then-Santa Clara City Attorney Mike Downey asked the FPPC for an opinion on whether Gillmor had to recuse herself from decisions involving PPA clients.

The FPPC’s decision was that PPA “would be considered a source of income to the councilmember and the councilmember could not participate in any decision that will have a reasonably foreseeable and material financial effect on Public Property Advisors.”

But when Gillmor was appointed to the Council in 2011 — replacing Jamie Matthews who had been elected Mayor — she didn’t report any interest in PPA. Nor did she again until 2017.

Gillmor has described her role in PPA variously as independent contractor, consultant, vice president and president, according to the complaint. Gillmor listed PPA among her financial interests in 2017 and 2018, but claimed that she had no income from it. 

Between 2011 and 2017, when Gillmor didn’t report her association with PPA, the business “sent invoices to clients in amounts exceeding $500,” said Exline’s complaint. The Santa Clara Teacher Housing Foundation reportedly pays PPA between $80,000 and $100,000 annually to manage the Casa de Maestra teacher housing complex.

 

History of Noncompliance

The complaint describes a “history of noncompliance” with the Political Reform Act, illustrated in three examples.

The first is a series of $500 cash donations from multiple members of Gillmor family to candidates in the 2004 Santa Clara City Council election — the limit for cash donations in $99.

The four candidates acknowledged the donations in a public forum, and the financial reports show $500 donations that were deposited, returned and then replaced by $500 checks by the same donors. [2004 10-27 campaign money story.pdf]

The second example is FPPC fines levied in 2017 against three Gillmor allies — Council Members Debi Davis and Kathy Watanabe and losing 2016 candidate Tino Silva — for failing to report 2016 campaign spending on a political consultant, Foo Robertson Marketing, until the end of January 2017.

The third illustration is perhaps the most pertinent. In 2017 the Santa Clara County District Attorney talked to Gillmor about “deficiencies” in her Form 700 disclosures with respect to other Gillmor businesses.

From 2011 through 2015 Gillmor failed to disclose that she was part owner of Gillmor Properties LLC and Gillmor Children’s LLC, both of which own significant amounts of real estate in Santa Clara and Gilroy. Gillmor amended her filings to add those entities, but didn’t add her PPA interest.

“The purpose of the [Reform] Act is to have greater disclosure,” said Attorney Ravel. “The people have a right to know about economic interests [in order] to see if elected officials are acting in the public interest or their own interest. The law was intended to favor broad disclosure.”

The penalty for intentionally or negligently failing to report economic interests can be as much as the amount of income or a gift that wasn’t properly reported.

You can read the complaint here.

Mayor Gillmor has not responded to the Weekly’s email regarding the situation.

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1 Comment
  1. GoodShipSantaClara 1 month ago
    Reply

    This should be interesting. I hope it doesn’t settle. Gillmor has done some interesting things that make sense on paper (periodic audits are always a good idea in principle), but concealing material information on one’s own financial interests is not ok. Accurate information is the mother’s milk of good government and representative democracy.

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