COVER-UP

Save San Diego Neighborhoods to johncannon

Apr 4

COVER-UP
A concerted effort to hide a dishonest, immoral,
or illegal act
This is follow-up to email Save San Diego Neighborhoods (SSDN) sent yesterday regarding
Councilmember Scott Sherman’s conflict of interest (pasted at bottom of this email for reference).

In response to yesterday’s email, many of you contacted Councilmember Scott Sherman,
City Attorney Mara Elliott and Mayor Kevin Faulconer about Scott Sherman’s conflict of
interest.
The universal response from Sherman, Faulconer and Elliott was to refer you to a
December 7, 2017 letter from Stacey Fulhorst, Executive Director of the Ethics
Commission and to say, “This has been investigated by the Ethics Commission and
Councilmember Sherman has been cleared.”
This is false. Councilmember Sherman has not been cleared of violations of the City’s
Ethics Ordinance. There has been no investigation.
Read on – and keep track of the italicized dates.
First, the Ethics Commission was formed in 2001 for the purpose of monitoring,
administering, and enforcing the City's governmental ethics laws. The Ethics Commission
is composed of seven members appointed by the Mayor. Stacey Fulhorst has been the
Executive Director since 2003 and works at the pleasure of the Mayor.
For ease of reference, we’ve attached the December 7, 2017 letter written by Stacey
Fulhorst to Councilmember Scott Sherman. This is the letter cited as the basis for the
assertion that Scott Sherman “has been cleared”.
Ms. Fulhorst starts her letter writing, “On December 6, 2017 a complaint alleging you
violated the City’s Ethics Ordinance by participating in decisions concerning short term
vacation rental regulations while having a prohibited financial interest in such decisions.”
Now, keep in mind, the City Council hearing on the proposed ordinance to legalize short
term vacation rentals was scheduled for December 12, 2017, only four (4) business days
from the date of the complaint.
If Councilmember Sherman was going to participate in the hearing, Ms. Fulhorst would
have to act quickly. She did.
Within 24 hours she read and considered the complaint, drafted the letter and hand

 delivered it to Councilmember Sherman.
Her conclusion? 
“In light of the foregoing, I have determined that the complaint does not contain sufficient
information to support the allegation that you violated the City’s ethics laws. As a result, I
have concluded that the allegations in the complaint do not warrant a formal
investigation, and that this matter is not appropriate for consideration by the
Commission.” 
Read that paragraph again.
Without consulting the seven Commissioners, Ms. Fulhorst concluded the complaint did
not contain sufficient information to “warrant a formal investigation”. 
The Ethics Commission is specifically charged with conducting investigations. Conducting
investigations into allegations of violations of the City’s Ethics Ordinance is one of the
Commissions relatively few responsibilities.
https://www.sandiego.gov/ethics/about
Simply put, Scott Sherman has not been cleared of violating the City’s ethics laws, by
anyone.
The “Public Generally” Exception
In footnote 1 to her December 7, 2017 letter, Ms. Fulhorst outlines her understanding of
the “public generally” exception in the Ethics Ordinance. Her understanding is erroneous.
She misstates and misinterprets the law. And so, her conclusion is wrong.
Here’s why.
SDMC Section 27.3561(b) states, in part, “A City Official has a disqualifying financial
interest in a municipal decision if that municipal decision will have a reasonably
foreseeable material financial effect, distinguishable from the effect of the public generally
. . .”
This last section is referred to as the “public generally” exception.
And here is what the California Fair Political Practices Commission says about the “public
generally” exception:
The “public generally” exception must be considered with care. An official may not just
assume that it applies. There are rules for identifying the specific segments of the general
population with which the official must compare the official’s financial interest, and
specific rules for deciding whether the financial impact will uniquely affect the public
official as compared to the public generally.
Recognizing Conflicts of Interest; A Guide to the Conflict of Interest Rules of the Political
Reform Act, FPPC, August, 2015.
The “public generally” exception is interpreted narrowly.
And here is the question the League of California Cities requires be answered when

 determining whether the “public generally” exception applies: Can the Public Official
demonstrate that the material effect on the Public Official’s financial interest is
indistinguishable from its effect on the public generally?
The “burden of proof’ to show that the financial effect is indistinguishable from the public
generally is on the public official – Scott Sherman.
Scott Sherman and/or his family members own - or are beneficiaries under trusts that own
– over 60 rental properties in the City of San Diego, over 40 of which are in the coastal
zone. He has participated - and is continuing to participate – in the City Council’s
determination as to whether to legalize short term vacation rentals – a municipal decision.
Now ask yourself, do you think the financial impact of legalizing short term vacation
rentals in San Diego on Scott Sherman is indistinguishable from the public generally?
If, like SSDN, you don’t think City Attorney Elliott will take action on Councilmember
Sherman’s conflict of interest, below is contact information for government officials and
entities who likely will.
Complaints with the Fair Political Practices Commission can be filed
here: http://www.fppc.ca.gov/
Attorney General here: https://oag.ca.gov/
District Attorney here: http://www.sdcda.org/
San Diego County Grand Jury here: https://www.sandiegocounty.gov/grandjury/

Link to Letter from Stacey Fulhorst to Scott Sherman.

 Below is the original email if you missed it.

UNLAWFUL
San Diego Councilmember Scott
Sherman and/or his family members own
over 60 rental properties in the City of San
Diego, over 40 of which are in the coastal
zone.
The City of San Diego Ethics Ordinance
makes it unlawful for a Councilmember
to make, participate in making, or in
any way use their official position to
influence a municipal decision which
will have a material financial effect on
the Councilmember or his family, or on
their economic interests in business
entities, real property, sources of
income, sources of gifts or their own
personal finances. (SDMC Section
27.3561).
STVR generate an average of 3-4 times more rent than a long term rental and are
generally not required to comply with California landlord tenant law. This is why landlords
find converting residential long term rentals to short term vacation rentals for tourists so
appealing – and lucrative.
It is reasonably foreseeable (legalese for “clear”) Councilmember Scott Sherman and his
family will experience a financial windfall if the use, STVR, is legalized. Conversion of
dwelling units to STVR on these properties isn’t necessary. Councilmember Sherman’s
real property values will increase if STVRs are legalized.
A new ordinance legalizing the now illegal use, STVR, will have a material financial
effect on Councilmember Scott Sherman and his family.
And, under the Ethics Ordinance, whether any of the properties owned by Sherman or his
family are converted to STVR is inconsequential.
The question is simply this: Is it reasonably foreseeable that Councilmember Sherman or
his family members will benefit financially from this change? The answer is unequivocally,

 yes.
The fact is, Councilmember Sherman has already violated Section 27.3561. He has
participated in making a municipal decision which will have a material financial
effect on him or his family. Among many other actions, he not only signed onto
Councilmember Ward’s failed STVR proposal, but he actively participated in voting
on the decision while on both the Smart Growth and Land Use Committee and the
Council hearing on December 12, 2017.
Given his past conduct, we think the legal impact of his violation of the Ethics
Ordinance is lost on Councilmember Scott Sherman. But, we're confident it is not
lost on City Attorney Elliott or other law enforcement officials, including the District
Attorney and the State Attorney General.
Councilmember Scott Sherman has violated the law.
With that said, we'd like to enlist your help to convince Scott Sherman to do the right thing
- the ethical thing – going forward.
Please write City Attorney Elliott, Mayor Faulconer, Scott Sherman and all the other
Councilmembers and demand Scott Sherman recuse himself from any vote regarding
STR/STVR - and insist that he be prohibited from voting if he refuses to recuse himself.
Email addresses are provided at the bottom of this email.
If you have any questions, please contact us at info@savesandiegoneighborhoods.org
Link: Sherman Properties List

Last, if you can help with a donation to fund our fight to protect our neighborhoods, we
would appreciate it. We are a nonprofit with a volunteer Board. Any amount helps. Click

 to Donate.

Contact Information:
Mayor Kevin L. Faulconer: (619) 236-6330 - kevinfaulconer@sandiego.gov
City Attorney Mara W. Elliott: (619) 236-6220 - cityattorney@sandiego.gov
Chris Ward: (619) 236-6633 - christopherward@sandiego.gov
David Alvarez: (619) 236-6688 - davidalvarez@sandiego.gov
Mark Kersey: (619) 236-6655 - markkersey@sandiego.gov
Chris Cate: (619) 236-6616 - chriscate@sandiego.gov
Scott Sherman: (619) 236-6677 - scottsherman@sandiego.gov
Myrtle Cole: (619) 236-6644 - myrtlecole@sandiego.gov
Georgette Gomez: (619) 236-6699 - georgettegomez@sandiego.gov
Barbara Bry: (619) 236-6611 - barbarabry@sandiego.gov
Lorie Zapf: (619) 236-6622 - loriezapf@sandiego.gov
…