Concern about Garofalo’s business dealing dates back to 1996

Theresa Moreau

HUNTINGTON BEACH -- A $4,500 bill submitted by a company in the city

that employed Dave Garofalo, then a councilman, as a $100,000-a-year

consultant was rejected by the city attorney in 1998 out of fear the

money might flow back to the councilman.

In reviewing the bill from Garofalo’s employer, Hutton noted that “any

contract with Coatings Resource would be traced back to Councilmember

Garofalo and consequently violate Government Code Section 1090.”

Section 1090 is the legal code that prohibits public officials from

giving themselves contracts.

Garofalo, now mayor, could not be reached for comment but in the past

has denied mixing his city and private business.

Documents released by the city attorney’s office this week reveal that

as early as 1996, red flags were raised over then-Councilman Dave

Garofalo’s involvement with the Chamber of Commerce’s Community Overview,

which is part of its annual business directory.

In 1996, Economic Development Director David Biggs asked the city

attorney’s office if the economic development department could do

business with Garofalo, who had just won a three-year contract to publish

the chamber’s overview and directory.

Biggs said he was specifically concerned about the overview, which his

department routinely purchased.

In a July 1996 memo, Hutton told Biggs the department could not give

Garofalo money for the publications.

“No money can flow directly or indirectly to Garofalo for that

publication,” Biggs noted in an interview this week.

To avoid the conflict in 1997-1998, Garofalo gave the chamber 2,500

free copies of the overview, which the chamber then sold to the city for

$4,500.

The chamber kept the money from the transaction, said Joyce Riddell,

the chamber’s president.

However, the city received a shipment of overviews in August 1998 that

it did not order. Three months later, the city received an invoice for

$4,500 from Coatings Resource Co., which Garofalo has said purchased his

publishing businesses in 1997.

The invoice raised Biggs’ eyebrows, causing him to ask Hutton for some

clarification on whether it should be paid.

In a December 1998 memo, City Atty. Gail Hutton advised against it and

ordered the overviews shipped back to Coatings Resource.

“The conflict of interest statutes are based upon the ‘truism that a

person cannot serve two masters simultaneously,”’ Hutton wrote.

Hutton said that because Garofalo had a consulting contract with

Coatings Resource, he would have an indirect interest in the invoice and

could not be paid.

Since that time, the overview has been sold to the city directly from

the chamber.

“Both [Riddell] and I have been very conscientious that funds don’t

flow [to Garofalo], that the funds stay within the chamber and there’s no

financial benefit to Councilman Garofalo,” Biggs said.