December 5, 2006 > Full disclosure: spirit or letter of the law?
Full disclosure: spirit or letter of the law?
by Steve Warga
Did the Political Reform Act of 1974 (PRA) impose too great a burden on public officials? Is it really fair to demand full public disclosure of personal and spousal income, investments and certain assets in attempting to expose any possible conflicts of interest? According to their filings of CA Form 700, Statement of Economic Interests, local officials at the city council level answer this moral dilemma in different ways. Most city councilmembers and mayors in the greater Tri-City area choose to disclose every detail of their and their spouses' financial considerations and transactions. This spirit of full disclosure may spring from a sense of civic duty; or it could be a simple matter of "better safe than sorry." Whatever the motivation, these officials lay it all out for constituent review.
Then there are a handful of officials whose filings stand out for their brevity, a fact that leads to questions. Are these persons fully complying with regulations issued and administered by the state Fair Political Practices Commission (FPPC).
In this segment of our series on Full Disclosure, TCV considers the filings of Hayward Mayor Mike Sweeney and Fremont City Councilmember Anu Natarajan.
City Clerk and FPPC Filing Officer, Angelina Reyes, was momentarily surprised when asked about Mayor Mike Sweeney's Form 700, which failed to list his wife's employment as a university professor. But Reye's surprise was not an indication of dereliction of duty on her part. She runs a tight ship, neat, complete and thoroughly professional. After only a moment's hesitation to think it through, she correctly concluded that the mayor's wife's employment in a public sector exempted Sweeney from any disclosing her information. Reyes recalled that former mayor, Roberta Cooper, was exempt from disclosing her husband's income because he worked in public education.
All other Hayward filings appear to be complete even beyond the minimum requirements of FPPC regulations. Sweeney's decision, reflecting his personal wishes, is entirely consistent with the letter of the law.
TCV's November 17 review of Fremont disclosure statements revealed a spirit of full disclosure from all councilmembers and the mayor, except newly elected Councilmember Anu Natarajan who discloses only the bare minimum of information.
A serious question was raised during the recent election campaign in the matter of a website advertising a company called "Arudhra." This information was uncovered by a local citizen's simple curiosity about the "webslides" portion of Natarajan's email address, email@example.com. Around the middle of September, a log-on to www.webslides.com opened to an index displaying links to either a "Preview" page or to "Arudhra.htm." On the Arudhra page, a viewer could read about fee-based management services for properties in Bangalore, India owned by non-resident Indians living in the U. S.
Arudhra described itself as "a strictly fee based management firm with the primary focus of providing value added services in protecting your investment properties" in Bangalore. Additionally, Arudhra stated, "Assistance with finalizing legal paperwork with local government entities can be facilitated on a need basis." Although the site claimed "Corporate Headquarters in Bangalore, India," the only direct contact identified was "US Representative Anu Natarajan" with her email address as the only contact information.
This Arudhra web page disappeared completely in late September, after Natarajan was challenged during a candidate's forum. Since then, a log-on to www.webslides.com reveals a stylish graphic that now declares "Anu Natarajan Fremont City Council" with pages about the councilmember and links to various other content pages, including a "Contributions" page complete with a "PayPal" form, awaiting only an amount and donor information.
If Arudhra was, in fact, soliciting business as advertised, Natarajan faces several questions of improprieties. First, she would have been required to disclose the business in her Form 700 filings if only because she was listed as "US Representative" and she resides in Fremont. Then, she would have come under scrutiny for soliciting property management services without a current California Real Estate Agent license, a violation of the law. Finally, the suggestion of "facilitated" paperwork with local government entities might well have been interpreted as an offer of influence peddling, which is a criminal offense.
In response to these questions, Natarajan insists the Arudhra business was only an idea. "It never was a registered company; it never took off the ground. It was an idea being toyed with that never went anywhere. My husband was showing my father (in India) what a webpage would look like."
As reported by TCV in our first installment of this investigation ("Who loves ya, baby?" 10/31), Natarajan did not file a Schedule C with her current Form 700. This schedule is where candidates report any other spousal or personal interests not otherwise disclosed on Schedules A1 or A2. Her current Form 700 includes both an A1 and A2, properly reporting her personal investments and income. As for her husband, Natarajan points out that he is employed as a software engineer in San Jose which puts his employment and income outside the Fremont jurisdiction. She is not required to disclose this information in her Statement of Economic Interests filings.
As for the Arudhra venture, Natarajan has never reported it because it was only an idea, not an active enterprise. "How do I report something that doesn't exist?" she said in answer to an inquiry.
During that same telephone interview, Natarajan insisted her husband's side business, Webslides.com, "has never had a Fremont address" so she isn't required to report any interest in it. However, www.networksolutions/whois/ lists the domain name, www.webslides.com, registered to "TBD" and Sundaram Natarajan (Anu's husband) as the "Administrative Contact, Technical Contact." Address and phone number are those of the Natarajan home in Fremont.
California's "community property" view of marital assets sometimes complicates the Form 700 filings. Briefly, an official covered by FPPC regulations must disclose his or her community property interest (50%) in a spouse's income or investments, if that interest comes within the jurisdiction of the reporting agency (City of Fremont, for example). The same rules apply to legally separate property as well. Businesses earning less than $2,000 during a reporting period are exempt from disclosure.
Regardless of Webslides location, it would still be exempt from disclosure if it earned less than $2,000 in a given twelve month period. Perhaps this is why Natarajan does not report any interest in Webslides on her Form 700.
Absent any contrary evidence, Natarajan's explanation of these possible discrepancies must be accepted. Her judgment, however, might be faulted. Why did she permit the Arudhra concept to remain - even if only archived - on the web while she was on the planning commission and then the city council? In the positions of trust she has held, the very appearance of impropriety should be avoided.
The FPPC guidelines permit amended filings at any time. Further, they stipulate that an official's amended filing to correct a deficiency is considered "an act of good faith." This means the FPPC will consider a questionable matter settled with an amended report. Cover-ups often raise greater suspicions than the original matter. In Natarajan's case, a simple amended filing would easily resolve lingering suspicions.
The Political Reform Act does intrude into a public official's financial privacy; that was its foundational intent. Those persons covered under the Act are entirely within their rights to adhere only to the strict letter of the law in this regard. It would be unfair to criticize any individual for going no further.
However, when dealing with something like the Arudhra business concept, perhaps that "better safe than sorry" mentally would have squelched any doubts of integrity. That "sample" web page was first posted at Webslides.com in October, 2002 (according to a web archive search engine). It underwent several design changes during that time. Then it disappeared immediately after Natarajan was questioned about it on September 26. Some citizens still wonder why.