By Steve Scauzillo, Staff Writer
Posted: 05/30/2013 03:36:13 PM PDT
Updated: 05/31/2013 09:08:56 AM PDT
LOS ANGELES – A judge Thursday came close to dismissing the criminal conflict-of-interest charges against former San Gabriel Valley Council of Governments Executive Director Nick Conway, but instead gave Conway’s attorney the opportunity to file an argument that may grant Conway a waiver from law.
Los Angeles Superior Court Judge Norm Shapiro, clearly troubled by the evidence before him, suggested that a waiver motion could be filed that recognizes inherent conflicts in Conway acting as the SGVCOG’s executive director while chasing contracts that boosted his management firm, Arroyo Associates.
Conway’s firm was hired by the COG to manage the joint powers agency of which 31 San Gabriel Valley cities are members.
“Although Mr. Conway’s conduct may have come under the 1090 government code, but the conflict was waived in this situation,” suggested Shapiro during a spirited, hour-long discussion of a motion to dismiss all charges filed by Conway’s attorney, Kenneth White.
While Shapiro did not rule on the motion, he said repeatedly that the case handed to him by Judge M.L. Villar de Longoria, who ruled there was enough evidence to suggest Conway was guilty and ordered a trial, was unique and perplexing.
“I can’t find a case that addresses anything like this,” Shapiro said, suggesting later that the case does not hinge on solid evidence but on “the interpretation of what happened.”
Conway, 61, a Pasadena resident, was charged with four felony counts of conflict of interest while running the SGVCOG last July. The 1090 clause of the California penal code says office holders or their employees “shall not be financially interested in any contract made by them in their official capacity” and that they shall not “be purchasers” of contracts.
Assistant District Attorney Dana Aratani argued that on four separate occasions while he headed the SGVCOG, Conway sought out and signed contracts that benefitted himself and his company. For example, one amendment to the 2010-2011 contract containing a flat rate payment of $422,000 a year added $105,000 “on top of the $422,000,” Aratani said.
Two other amendments were added after Conway sought out and signed additional grants, one adding $21,896 and another adding $21,573 to Arroyo Associates’ contract in the same fiscal year.
“Mr. Conway was going out and finding these additional contracts and signing them,” Aratani told the judge. “By signing these contracts, he got additional income. This is a very textbook example of a conflict-of-interest situation.”
Later in the hearing, Aratani brought up a 2006 investigation by the Los Angeles County District Attorney into Conway and the SGVCOG for alleged conflict of interest. Though it never led to charges being filed, Aratani said the investigation should have cautioned Conway to stay away from future conflict-of-interest situations.
While Shapiro acknowledged that Conway “was no babe in the woods,” he did not agree with Aratani that this case was clear cut. Instead, he leaned toward the defense argument that Conway was only doing what the SGVCOG board ordered him to do.
While this argument was rejected by Judge Villar de Longoria after the preliminary hearing, it gained more traction with Shapiro.
“It is clear that the judge was troubled by this case where it is so clear a man was told by the government to do something that was approved by counsel hired by the government and is now being charged with a crime for doing that,” White said in an interview after the hearing.
White argued that the SGVCOG’s chosen form of governance — to contract out its management to Conway and his company — was a way of saving money. But it also contained flaws. He said Foothill Transit, a San Gabriel Valley transit agency that contracts out with a private management firm, last week voted to sever that contract and manage its administrative personnel in-house. He said it was not a coincidence that Foothill Transit is moving away from a possible conflict of interest.
Even the SGVCOG, which fired Conway and Arroyo Associates on Oct. 31, has since hired its own employees, an indication that the system was flawed, not the man.
“Entities all over now are looking at this,” White said. “This structure has some inherent flaws. It is fundamentally unfair to make this man the scapegoat for those flaws that the government has chosen to save money.”
Aratani objected to the waiver petition being considered, saying the state’s 1090 law clearly applies in this case.
“The public has a right to know their executive officer of the San Gabriel Valley COG is doing things at the best interest of them, as opposed to growing his company,” he told the judge.
White will submit a written argument on the waiver option by June 17. Aratani will have until July 2 to respond, Shapiro said. He ordered both sides to appear in court July 12, so he could rule on the motion to dismiss the charges. He said that is unless a settlement between the two sides can be reached before then.
When asked about a settlement, White said he would not comment.