Santa Ana mayor would receive $500,000 'finders fee' if sale of state buildings goes forward [Updated]

The mayor of Santa Ana would receive a $500,000 “finder’s fee” if the controversial sale of 24 state buildings goes through, according to interviews and court documents filed Monday, making him one of many people with deep political connections to benefit from the controversial transaction.

Opponents of the sell-off, led by two former building authority commissioners that Gov. Arnold Schwarzenegger ousted when they raised questions about the transaction, have sued to stop the sale, which could close as early as Dec. 15.

The allegation about Santa Ana Mayor Miguel Pulido came to light during a deposition three days ago, when attorneys for the opponents questioned state Treasurer Bill Lockyer. They are asking a San Francisco Superior Court judge to require that the state divulge full details of the sale, which has been criticized as secretive and a waste of taxpayers’ money.

Judge Charlotte Woolard could decide as early as Friday whether to block the sale of 11 parcels, including the home of the California Supreme Court. The governor’s office has said the sale would provide much-needed revenue to help fill the state’s gaping budget deficit.

During questioning, Lockyer said he had received a phone call from an Orange County attorney who is a friend of his and Pulido’s. The attorney, Frank Barbaro, told Lockyer that he had been approached by Pulido; the mayor told Barbaro that he was worried about the controversy surrounding the sale of the state buildings.

According to Lockyer, Barbaro said he would ask the treasurer about the sale. Lockyer voted against the transaction, but Barbaro did not know that at the time.

Barbaro “said Miguel was concerned because he was going to receive a $500,000 finder’s fee if the transaction was consummated,” Lockyer testified, according to court documents.

Lockyer did not, however, know who would pay the fee or whether Pulido worked for the state in selling the properties or for the consortium of investors who are trying to buy the property. Barbaro told him  Pulido “helped put the deal together,” Lockyer said. Lockyer and Barbaro did not return calls for comment.

Pulido defended the potential payment, arguing that it was not a “finder’s fee” but rather a “success fee” payable only if the deal goes through. His part of the transaction, he said in a telephone interview Monday, was simply to introduce several of the companies involved to each other.

The companies approached him for his assistance, he said, because “I just know a lot of folks.”
“Our bid was $230 million above the next-highest bid,” he said. “If that is the case, I am part of the team that helps California and I am proud of it.”

[Updated, 5 p.m.: In a strange twist, Pulido later contacted The Times to say that the partnership was reorganizing, some of the companies he had helped introduce had pulled out, and that he would not be paid the $500,000.

A spokesman for the winning bidders said he had never heard of the proposed fee.]

But Robert Stern, president of the Center for Governmental Studies, called the $500,000 an “inappropriate” payment for a public official.

“He shouldn’t be paid for his connections as a public official,” Stern said. “That sounds like an extraordinary fee. For $500,000, he should have done more than introduce people.”

Joseph Cotchett, the attorney representing the sale’s opponents, said in an interview Monday that the proposed payment “raises very serious questions.”

“It’s all public money involved. How do you give finder’s fees?” Cotchett said. “It should be an arms-length economic transaction that is beneficial to the state of California and taxpayers. If there’s money that finder’s fees can be paid, that’s not an economically viable transaction” for the state.

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-- Maria L. La Ganga, Shane Goldmacher and Shan Li

Photo: L.A. Times file

Comments

[Anonymous]

Are you kidding me? This is a joke, right?

[frank]

finders fee....it's sounds like arm twisting and public employee trying to make money on the back of tax payers...

[CornerJ]

In what parallel universe can one justify payment of $500,000 to a public official PERSONALLY for anything having to do with that public agency's business? This is absurd and outrageous. It needs to be rescinded ASAP.

[Hector]

It would be nice if the $500,000 was contributed to the people of California. No politician should receive extra contractual money for doing the work of the people.

[mmg]

The state is in dire financial straights and YOU think you deseserve a, "success fee"?!

[sensei]

Absolutely disgusting. Recall Pulido.

[PBSfriend]

This is California, the joke has always been on the people. Sheesh. Who is the bigger bust now, the Governator or Gray Davis?

[Vet1]

But Robert Stern, president of the Center for Governmental Studies, called the $500,000 an “inappropriate” payment for a public official.

“He shouldn’t be paid for his connections as a public official.

No kidding. Where are the ethics of the people in politics these days? We get Rizzo et al from Bell, Vernon's elite trash, and now this. Next time around at the poles remember this guy and vote him OUT ! Maybe OK in the old country, but not here.

[Nancy Reid]

How corrupt does California have to become before the people revolt???

[Oh Boy]

Wow GREED DOES PAY...Puplic paid for thes building 's - over and over, they sale them (get paid) and who do you think will PAY - Ya YOU

[Rick]

What is this?! Are we now living in Mexico or the Philippines?!

[phil]

I've been away from L.A. for quite a while - I don't recall Santa Ana adjoining Bell.

[michael]

Where I grew up in Connecticut there was a mayor who had bought a lot of homes on a certain road and then pushed for a city road extension to go right through those homes. When the city purchased them...he made millions, and that was in the 60'w when "millions" meant a lot more than it does now. Crooks will be crooks...and politicians!

[disgusted with politicians]

“success fee” - just like other Pulido success stories (Santa Ana)

[Greg Maragos]

This is a real estate transaction. Since finders fees are usually based on a percentage of the total value of a particular transaction, receiving such a feel could be construed by the courts as a real estate broker's commission, even if they try to call it something else.

If the good Mayer does not have a real estate license, collecting this "fee" might be problematic, at best. My guess is this will not happen.

[Bud]

Business as usual. Hopefully, the judge blocks this real estate giveaway until Brown takes office. Arnold is a disaster.

[bobby99]

Sounds like "hiss honeer the mayor" started thinking about the Bell boys and life in the joint. Real nice of him to call and say he decided not to take the half million.!

[Bebe]

'Finders Fee'? The term 'kickback' sounds more appropriate.

[Richard]

Where are the moral compasses of these elected officials recently? Public service has a new meaning and enrichment seems to be the operative word.

[tontosh]

What is going on? Every time we turn around there is a politician that's making a killing off of the taxpayer. We complain about other countries being corrupt but we are the biggest corrupt country in the world.

[Alfred Brock]

Close the sale and disallow the 'Finder's Fee'.

[92804John]

He called a lawyer, Barbaro, why? Wasn't sure it was legal? Was concerned about the ethics? Thought it would look bad? Let's see. If you aren't sure something is legal, don't you get legal advice before you get involved? That can't be why. Since when are politicians concerned about ethics?, No, that's not it either. Afraid it would look bad? Could be. Maybe he thought he could get by without anyone knowing and was surprised when it came to light and was trying to cover his behind. I don't know, but it stinks. His best move would be to either refuse the pay, donate it back to the state, donate it to the city, or donate it to a recognizable charity. He has a chance to come out looking good here. Let's hope he doesn't mess it up!

[Brian]

dig a little deeper LA Times...i bet there's plenty of Bell like corruption to be found if you do. Keep up the great work.

[Robert]

Hopefully the courts will stop this pennywise/poundfoolish idea. Selling the public buildings will end up costing the state money in the long run.

[Richard Hamel]

It breaks my heart to read this about Miguel Pulido. Anyone who has known this good person and effective elected official must share this grief.