EXCLUSIVE: DA drops Duran credit card case

April 1, 2013

*Exclusive to WeHo News: Los Angeles District Attorney drops two-year long credit card investigation into West Hollywood city council member John Duran’s use of the city’s credit card; the Public Integrity Division will not bring a felony case in the matter…

A credit card investigation that began as a campaign ploy by supporters of challenger John D’Amico to embarrass incumbent John Heilman during the 2011 election and backfired against D’Amico supporter council member John Duran in the ensuing months has come to a close nearly two years later.

Saying, “The District Attorney has let us know that they’ve completed their investigation and they will not be bringing any criminal charges against John Duran or any other elected official in the city of West Hollywood in the matter regarding the use of credit cards by elected officials,” Mr. Duran’s attorney George Bird told WeHo News that the council member was now free of suspicion that he had done anything wrong.

West Hollywood city council member John Duran taking the oath of office for the fourth time. The LA DA has chosen not to file charges against Mr. Duran in the city credit card use kerfuffle. Photo by Richard Settle.

After telling WeHo News that "our procedures for [the way these notices are relayed] are undergoing review," the District Attorney's Jean Guccione, Director of Communications, declined to comment on the news today, saying she would comment officially "in a couple weeks."

Mr. Duran's attorney said, "I imagine it was very difficult, nearly a Herculean task, for John to have run for reelection while this investigation was pending," he said."But I think the, his re-election speaks to the job he has done during his term of public service and the belief that the residents of West Hollywood have in his integrity and in his public service."

Council member John Duran became a target of an investigation by the Los Angeles District Attorney’s Public Integrity Division in early May, 2011, after citizen activist Ed Buck made a complaint about profligate spending by Fran Solomon, Mr. Heilman’s deputy, at some of the city’s most expensive restaurants. In addition to her charges, it was discovered that meal and food purchases between 2008 and 2010 totaled in excess of $75,000 and included included spending sprees on pens and gift cards at high-end grocer Gelson’s.

While the DA’s inquiry into those expenditures and Ms. Solomon’s use of the city credit card for regular luncheons costing more than $100 failed to rise to the level of an investigation, Mr. Duran’s use of the card to buy meals for his deputy and himself before council meetings and to conduct other meetings with constituents or stakeholders did. The total spent on 128 meals over three years totaled about $7,000 and averaged a little less than $55 per meal.

The instance caused the city to take the credit card at issue away from the council offices and to make changes to its credit card policy. However, Public Integrity Division’s head David Demerjian decided to launch a felony investigation into Mr. Duran's expenses calling them “suspect because state rules allow meal and related expenses only for necessary city business." He said that expensing a meal while out of town on city business is fine, but not justified when buying meals within the city, especially when guests are other city employees.

The credit card scandal began when Fran Solomon (city council John Heilman's deputy)'s profligate use of the city's credit card for $100 lunches at Ceccione's and The Palm came to light amidst an election campaign.

His reasoning turned on an interpretation of a 2005 bill – AB 1234 – that established law-controlling expenditures by public officials.That law contains a phrase that Mr. Demerjian contended made city-bought meals inside city limits unlawful because it stated that the law dealt with “reimbursement of expenses for travel, meals and lodging.”

The DA called his case a “test case” because no other politician had been brought to trial for eating meals on the city’s dime while in the city conducting city business. All the prosecution of late have been of flagrant use of city funds for recreational use, such as Vernon City Administrator Bruce Malkenhorst’s guilty plea to illegally using public funds to finance golf outings, massages and meals, as well as paying off his personal Visa credit card. He even had the city pay for donations to his campaign.

Mr. Duran, facing an investigation, set up a criminal defense fund to take in donations to fight the charges in the event they were filed (no money ever went into the fund, and it was closed in mid-December) and hired a criminal defense attorney Bird, who also serves as a city council member for Palos Verdes Estates.

Mr. Bird told WeHo News, “the District Attorney’s office informed us that California prohibited public officials from having the cities pay for meals within the city even though they conducted business. We provided a declaration from [Assembly Member Simon Salinas] one of the authors of AB 1234 that John’s conduct was lawful.” The section of AB 1234 mentioned by Mr. Bird allows governing bodies to decide whether “City council members may be reimbursed for actual and necessary expenses incurred in the performance of official duties.”

In May 2012 the city council voted to indemnify Mr. Duran’s legal expenses should the DA bring charges against him In a prepared statement, the city attorney said, "The City Council believes that it is in the public’s interest to provide such a defense based on the district attorney’s announced intention to make this a test case, challenging commonly understood practices pertaining to reimbursement of business expenses." He added that Mr. Duran had "adhered to city policy" and that his “expenses were incurred within the scope of his duties as a city council member.”

All of the pre-2011 election council members except Jeff Prang paid money back to the city as part of its efforts to clear up public perceptions of corruption. Mr. Prang was the only one on the council to never use the card. Ms. Solomon was never asked to account for or repay the hundreds of dollars she spent taking board and staff members and commissioners out to dine. Photo by Richard Settle.

On Oct. 26, 2012, city attorney Mike Jenkins wrote a letter to Mr. Demerjian announcing that, “Council members have voluntarily reimbursed the City for credit card expenditures that could have been perceived as inconsistent with the City’s AB 1234 policy.” The amounts repaid, by council member, were 4,623.68 by John Duran; $875.57 by John Heilman; $190.18 by Abbe Land; and $134.48 by John D’Amico. Jeffrey Prang does not use the city credit card, and so had no expenses to return.

Mr. Bird said that, while, “I’m pleased that they’re not going to prosecute John Duran for having a meal yesterday… I think cities will be put on notice that they can’t pay for meals tomorrow and that if they do, they might be used as a test case.

“I think it would be appropriate for the District Attorney to educate or publish their interpretation of AB 1234 so that cities could conduct themselves accordingly. That way, if they chose to continue to reimburse public officials for meals while conducting city business within their city, that they do it with their eyes open, that the District Attorney takes the position that it’s a violation of 1234 and that they’re subject to prosecution.”

He asked, “What is the position of every District Attorney up and down the state on this issue? Because the DA of Los Angeles has to make a decision for Los Angeles, but the city officials in Oxnard, in a published report by the Ventura County District Attorney a year ago, were having thousand dollar bottles of wine and eating at Ruth’s Chris. And they didn’t get charged,” he said.

That patchwork of interpretations can only lead to chaos in the future, so Mr. Bird called on the State’s Attorney General to issue a clarification to AB 1234 for DA’s and cities’ guidance, “The habit of breaking bread while conducting business is not unique. It’s been around since people started to socialize with one another. I think it would be important to have statewide uniformity on this issue.”

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