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.
-- Maria L. La Ganga, Shane Goldmacher and Shan Li
Photo: L.A. Times file