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Roundtable: Forgotten Transparency Law; Issa And Hunter; More Fat Leonard; Illegal Hotel Rooms

Roundtable: Forgotten Transparency Law; Issa And Hunter
Transparency Law, Issa & Hunter, More "Fat Leonard," Illegal Short-Term Rentals
Transparency Law, Issa & Hunter, More "Fat Leonard," Illegal Short-Term Rentals PANEL: Brad Racino, senior reporter, inewsource Joshua Stewart, politics & county government reporter, The San Diego Union-Tribune Greg Moran, Watchdog reporter, The San Diego Union-Tribune Lori Weisberg, tourism & hospitality reporter, The San Diego Union-Tribune

MS: The city government transparency law has been ignored for 25 years and not anymore. Republican Congressman Darrell and Duncan Hunter Junior met constituents at a public forum. And the Navy bribery scandal smears more brass including the Admiral and captains. Luxury apartments are being illegally marketed as vacation rentals. MS: Welcome to our discussion. I am Mark Saur. Joining me is Lori who covers marketing. LW: Hello. MS: Brad is here. MS: It is good to have you there. BR: Hello, great. MS: Joshua Stewart of the San Diego Union Tribune is here. MS: We have a few ballot initiatives that ever got this report. Voters backed a measure called for those doing business with the city to be clearly identified and to state the nature of their city involvement that in 25 years, that law has never been enforced. Start with some history. How does this law, back? BR: This started because in 1992, the city wanted to do a real estate transaction to buy affordable housing. One of the members wanted to know who they were doing business with he was not getting a prompt answer so he found that the person was allegedly the second highest ranking member of the Mafia. That created problems after that. Because of that, they agreed that that should never happen again. The city should know whom they are doing business with. MS: That is the rationale. MS: We need to know who was involved and if there is anything nefarious going on. BR: Is just like you were doing private business. MS: What did the law, what did it mandate? BR: It is a short law, only for paragraphs long. BR: The main point is, it requires for any transaction, it requires a full and complete disclosure and the name and identity of all persons directly or indirectly involved in the transaction and the nature of all interests of the parties. MS: That caused some problems because it is open to interpretation when it is that short. BR: It is vague. The vagueness was a problem almost immediately. We found a memo from someone in the city saying, how do we interpret this? What is indirect interest mean? BR: It started this chain of reactions. MS: We will jump back and forth in time. Here is a new councilwoman Barbara Bry who has not been here long. She is describing why she says we need to know whom we are dealing with. BB: You are doing business with ABC landscaping and it is owned by Joe and Jill and they do a bad job and you decide that you do not want to do business with them again and the next day another landscaping applies to do business with the city, it is still owned by Joe and show, you need to know that. MS: That is a benign example but this was popular with voters, right? It got a huge support. BR: There was no opposition. I think everyone said yes. We should do this. 86% of the voters approved of it and I was 25 years ago. MS: Back then, the city attorney offers to go in and fix this vagueness that you were talking about and get the definitions. What happened? He gave the city Council a blueprint. BR: He started a tradition of doing is. BR: All they can do is offer clarifying language and interpretation and give it to the Council. He did it and then Michael Gary did it and Goldsmith did it. Here we are. Three different people are doing is. MS: It is hard to understand with the struggle the city had gone through, that so many businesses are competing and give a scope of this. We are talking about a lot of money? BR: The initial investigation was more than 1 million the -- MS: that is a lot of dough. Why wasn't this embraced by city leaders went there is so much financial call for transparency. BR: It depends who you are talking to, he said if in San Diego, the government issued by those who abuse it. [Laughter] BR: There are layers that hide and where the money is coming from. BR: Talk to the skeptics. They do not want to change things. BR: If you talk to people inside, they say this is hard to implement. What is the cough? If you buy paperclips, do you have to know who the owner is? There is a bit of a hurdle to jump through when it comes to the logistics. BR: If you go back to the vote, this is a law and voters wanted it. MS: They overwhelmingly wanted it MS: Could you say the CEO and anybody who is handling X amount of dollars with the contract? BR: Those that been proposed. There have been memos and they have blade that out. LW: I find it interesting when you are testing a law in seeking information and in one case you were going to real estate assets and asking for information about projects and the answer was I'm sorry. We cannot be responsive to your request. Normally you think that they are stonewalling. They have no information. They cannot find information. BR: Right. That is what they tell us. After the last investigation, they said they would start collecting information but that is one department. Real estate deals with millions of dollars. MS: Right. MS: If they implemented this in a reasonable way, would mean hiring staff to get the information together? BR: I do not know. I do not think so. It requires one more line on a form. You fill it out and there it is. As far as the implementation online, it is not that hard to build a portal. They are already doing well with the open data. It is a boom. MS: What is happening with the city council? Are they going to implement it? BR: Yes. They took it up in October and it went away and that is why we did the story and said what happen. It is on the docket for June. We will follow-up with your reporting. It is a fascinating BR: story. MS: Republican members of Congress may want to forgo the recess stripped MS: Home is a Washington because protesters are motivated and loud and angry are demanding public and in-your-face meetings with the representative. Duncan L constituents wrath recently. The scene for us. Start with Darrell. What was it like? JS: By all accounts, it was a ruckus. There were protesters that showed up to press him He had two sessions because there was so much interest. And in they cleared out and they brought in the next wave of people. At events across the country, they are confrontation and there is yelling and shouting. Quite frankly, these events have been the liveliest that have occurred and while. MS: It is the same thing at East County? JS: Very similar. Probably does -- I was at hunters in and it seen more ruckus at hunters. JS: People are yelling at each other. They are throwing insults at each other as well as the Congressman. The Congressman seemed to enjoy it. He kept -- he would take -- calling and singing we are the champions. MS: We won and get over it. JS: That was the message. MS: There were some supporters but the protesters outnumbered the supporters. JS: Security was out in mass by private security also and there were 14 additional sheriff deputies to keep things in line. I think the worst was to tell people to cool off. MS: What were big issues or things they wanted to confront? Pet health care was a big one. JS: There are people that do not want to see Obamacare disappear. They are concerned about losing coverage or concerned about changes in the premiums. There are a lot of people demanding that they are not to be changes that would leave them without insurance. You hear about this in the so-called trump care position. We do have a bite that I want to set up. We have not been towing the line on healthcare. Here is a clip. I do not believe that we can strip away employer and mandates and not find a carrot and a stick to get people to be financially fiscally responsible for there own decisions. MS: What does he mean? JS: He says he cannot support in the current form. He has not said what particular matters within the bill he takes issue with. He has not suggested amendments it would like to see occur. JS: The bill provides subsidies to encourage people to them by insurance. That could be one of the carrots. MS: Go ahead. GM: Besides the theater, is there anything substantive coming out of this that the congressmen are taking away or that the people who go? GM: Thing that gets the publicity is there substance going on? JS: The biggest thing is the town. They are getting the temperature of the constituents. JS: They understand what issues matter to them. And terms of practical policies that they can take back, I have not seen much of anything but in terms of positions, I've seen more. MS: Lori? LW: Holding the meetings, is it damned if you do and damned if you don't? Are you criticized if you do not schedule them? If you hold them, you are an antagonist? Is it a can't when? JS: As Hunter had his event at a music call. He had to face the music. [Laughter] JS: It is one of those things, they do not have these meetings, in November, the opponents have a club and they say where were you. You were not listening to us and you are ignoring us and now you want two years. MS: We are clamoring to meetings in you are not coming out. MS: Let's get a bite from Hunter. Hunter: We allow any insurance company to not have an federal overarching tyranny over it. There is healthcare and things will be better. MS: You hear more noise there. They let him speak. MS: These are two different congressmen politically in that this is a safe district -- I'm sorry. Hunter and East County. They barely squeaked through. Has to come back to the metal because the proponents are lighting up against both of these people. JS: That is correct. JS: ISSA raced and there were 1600 votes. That is nothing. JS: He has a second challenger, Mike Levin in Orange County. This is an environmental attorney. He ran the orange County Democrats. He knows -- it is not like last year when the race starts to begin the day after the primary when Applegate was so close. MS: It is much earlier. JS: They have 20 months to plan a fun race at attack iSSA MS: Hunter is getting some opposition already. JS: That is right. MS: We will see that as we go along. It will be an interesting election year. We have to move onto the next segment, the "Fat Leonard" scandal keeps expanding. Nine more officers and an admiral were indicted on conspiracy and other charges. Remind us who "Fat Leonard" is. This is a big scandal. GM: He is a big man. This is a big deal. This is the nickname in the court documents. It was the nickname of a man named Leonard Glenn Francis. This is in the ship husband business. They are defense contractors. They signed contracts with the Navy so that when Navy ships pulling to foreign ports and they need fuel and water and all kinds of things, the local husband or will provide those. MS: We do have two bolsters what you're saying; we can have a clip on what they do. Let's hear that. It is a scandal of operations. Local networks and nine regional offices that have operated in more than 32 countries represent it. It is a specialized team of professionals and they have unrivaled value for clients. They have Marine husbandry and cruise operations. MS: Some of those clients got more than they bargained for. What is the overview? GM: This case is simple. Leonard would get his thoughts into officers in the Navy on the ships by bribing them or giving gifts and dinners or expensive watches and free travel and many uses a prostitutes. In exchange, they would advance his interests within the Navy by advocating that they get certain contracts and the Navy ships go to ports across Asia where they are established. MS: They are control is the services. GM: That was important because then he could execute the point, which was to over Bill, and defraud the Navy of tens of millions of dollars. MS: That is my next question. We are talking a lot of money. GM: Not only money but time. This went on for a decade or longer. Leonard has pled guilty several years ago and he is cooperating. And in his agreement, they acknowledge $35 million in ill-gotten gains from the scene. I think everybody thinks that is not the total amount it has to be more. MS: It's not over even though fat Leonard is singing. We had a bunch of indictments but the big thing is the admiral. GM: This was an indictment. 26 people have been charged. The top line here is a fellow named Bruce Loveless who retired from the Navy last October. The strife or conduct that occurred when he was a captain he availed himself, which included free hotel rooms. And prostitutes. MS: There is graphic stuff. GM: There is a phrase of a rotating carousel a prostitute. This goes down in naval history as a sex party and hotels. BR: It boggles my mind how do this go this far? But where are the safeguards? GM: Back one is, throughout the tendency of this, there were people within the service who were shooting up flares to NCI S and other people saying we are getting gouged by this guy. Do something with this guy. He had enough people on the payroll that would run interference for them, and one person was indicted and has pled guilty and this was an agent who was feeding him confidential information about the investigation. GM: He had a lot of people. GM: He knew exactly where he was going. He targeted people on the command staff of the fleet. This was the seventh Fleet. They had this influence to direct ships or have some import -- input on where ships went. They would complain about him and they would run down competitors and challenge people. The Navy has grown a lot and the Navy has cut back providing services. While that part of it expanded, they did not expand the back shot. They cut the auditors. LW: To were there any things that leaked out? GM: If you are in the Pacific and pulling into ports, you knew who Leonard was. He was always there on the peer. I think it would be hard to keep that entirely secret but a big part of this indictment and the other indictments is the steps that they took to conceal the involvement. MS: We will see what happens as the case moves through. There is more to come on that story. MS: In a pitch, there is a downtown apartment with kitchens and baths and a gym in easy to find restaurant and bars. A hot market has sprung up. This is a practice that is likely illegal. MS: How are they hooking up with travelers looking for a place to stay? LW: The favorite platform, and a website that have not been familiar with cold back. When you go in, when you go on there you cannot necessarily look for an apartment. You think you're getting a condo or a home. You do not know what you're getting. You are getting addresses -- they do not give addresses. On the other sites, you cannot search Apartments. They will not let you. It was difficult to find where they are but by word-of-mouth, we are going about this. MS: How much do they go for? LW: We saw some as low as 115 but some were 200 and maybe as high as $300 per night. MS: Most of the leases prohibit this nightly rental activity. LW: Right. Even a major landlord has sued them over this. They do. We were hearing that maybe some landlords are claiming that it is not allowed but they are in cahoots because it takes a while to fill the high-rises with hundreds of units. We can never substantiate that. LW: It could be a way to get revenue during the long period for the high-rise. MS: Mark Elliott is issuing an opinion, which differs from what has been considered in the past regarding the fact that this is not permitted. LW: That is a bigger issue and that will come to a head on Friday when there is a hearing. Her previous predecessors said that the law is unclear and as. She is saying we have the promise of zoning ordinance. If it is not listed in the zoning order, it is not permitted. They are illegal. That does not mean city enforcement will knock on your door but it sets the stage for more urgent needs for the city to regulate these. GM: That is interesting. What prompted the memo? Was there an inquiry from the Council? LW: She ran on it platform that she would address the short-term rentals. There is a safe San Diego neighborhood. They have been pushing to get an opinion out. The actual former inquiry came from Barbara who ran on this. Saying could you tell us are these legal or not. That is working from. MS: You are getting complaints? From the rental situations across the area of? Back LW: there are plenty of complaints and we do not have the code enforcement staff to respond. Even if they did, the people that are complaining saying by the time you call anybody, it is too late. They have moved on. JS: What is the problem with these rentals? Why are they criticizing the? LW: But it's not the person that rents out around. It is the people or the commercial investors, people have multiple units. It is a business rather than fixing it out to long-term residents. There were late-night parties. When you are on vacation, you want to let loose. You do not have to be college kids. It can be anybody. It is loud for the neighbors. That is the biggest complaints. It is disrupting a single-family neighborhood. MS: They get complaints and they could be in cahoots but you mentioned a story where they are renting it out by the night. LW: Yes. It is a developer. He can make more money doing then that the long-term leases. MS: Will have the city Council take this up in committee. Is that the 15 a report? LW: Yes. This is the fourth time they have done this because there is no consensus. It always has been six or seven hours on both sides with equal numbers. BR: The key player is the hotel industry? They have the study? MS: They are competitors. LW: Nationally, the hotel industry has been a big player but why go to the hearings, they are low-key about it. They have not made a big deal about it. They are doing quite well in San Diego and elsewhere. You're right. It has been the single-family neighborhoods. MS: We will see what happens as the Council take this up. That wraps up the Saint Patty's day addition. We have another week of stories. I would like to think I guessed of the Tribune. Brad and Greg also of the Union Tribune and Taranto now, Joshua Stewart of the Union Tribune. I reminder that the stories we discussed today are available on our website on I am Mark Saur. Thank you for joining us today. [Event Concluded]

Transparency, schmansparency

Section 225 of the San Diego City Charter, a vaguely worded law passed by voters in 1992, has never been implemented.

The section requires every person or entity doing business with the city to disclose the name and identity of all persons involved and the “precise nature” of their involvement.


But the measure, passed with 86 percent of the vote (after the city was afraid it had nearly done business with a member of the Mafia), was not specific.

What level of identification was required? What types of interest had to be identified?

More than 1,000 companies do business with the city — buying, selling and leasing land, and negotiating franchise rights and contracts — worth billions. Yet today, 25 years after the passage of Section 225, the city has little idea who is involved in much of this business.

Various city attorneys — John Witt, Mike Aguirre, Jan Goldsmith — have offered the San Diego City Council ways to clear up the ambiguities, to no avail.

In 2016, Goldsmith even drafted an ordinance for the Rules Committee to consider. No dice. Crickets.


inewsource first reported on this state of affairs last August.

But a recent follow-up produced an acknowledgement by the mayor’s office that they were “working through it,” as well as information that the issue would be docketed by the City Council Rules Committee in June.

RELATED: Financial interests behind San Diego deals worth billions still undisclosed (inewsource)

Facing the voters

Congressmen Darrell Issa and Duncan Hunter, Jr., up for re-election in 2018, are Republicans in an increasingly blue corner of a blue state.

After some delay, both men finally decided to schedule town hall meetings with their constituents last weekend. Protesters appeared to outnumber supporters at both events.

The meetings, centered mostly on health care, were raucous and jammed.

But only one congressman seems in danger of losing his seat. Issa, R-Vista, won in 2016 against Doug Applegate, D-Solana Beach, by less than one percentage point, while Hunter, R-El Cajon, was easily re-elected in conservative East County.

Issa tried to convince his Oceanside audience that Congress would improve the current version of the GOP health care bill so that millions would not become suddenly uninsured. Hunter expressed approval of the bill as it is.

The topic of Russian interference in the U.S. election came up at both forums, with Issa supporting an independent investigation and Hunter sticking with probes planned by Congress.

Issa now has two challengers for 2018, Doug Applegate, who has some campaign accounting problems, and Orange County environmental attorney and director of governmental affairs for Fuel Cell Energy Mike Levin.

Ditto for Hunter. As of now, he will face Gloria Chadwick, a member of the Grossmont Hospital Board, and Patrick Malloy, who ran in 2016.

RELATED: Issa, Hunter face raucous anti-Trump crowds at town hall meetings (SDUT)

RELATED: San Diego Congressional Reps Hold Town Halls

More indictments in 'Fat Leonard' scandal

The scandal, named after a heavy-set businessman who bribed his way into U.S. Navy procurements, has claimed nine more Navy officers, including another admiral.

Rear Adm. Bruce Loveless was indicted this week, along with Navy captains David Newland, Donald Hornbeck, James Dolan and David Lansman.

The long-running scandal includes charges of bribery, conspiracy and obstruction of justice, all federal crimes.

Fat Leonard is Leonard Glenn Francis, owner of Glenn Marine Defense Asia, a ship-servicing company, who bribed the officers with lavish gifts (expensive meals, hotel stays, cigars, liquor and prostitutes) to steer lucrative contracts to his via classified information.

Francis subsequently overbilled the Navy for those services. The scandal has sucked in 25 people so far, including 20 Navy officers.

RELATED: 9 Navy officers, including an admiral, indicted in 'Fat Leonard' bribery scandal (SDUT)

RELATED: How 'Fat Leonard' fleeced the fleet (SDUT)

Airbnb invades downtown

Violating rental agreements, tenants at several newer luxury apartment buildings in the downtown area have listed them for rent by the night on vacation rental platforms like Airbnb and VRBO.

Most apartment leases forbid subletting. These types of rentals represent a relatively new wrinkle in the short-term vacation rental market, which mostly consists of homes and duplexes.

Many of the apartments rent for $2,000 or more a month, with a one-night stay costing around 10 percent of that.

High-end apartment construction has mushroomed in the downtown area, and landlords are filing suit against Airbnb to attempt to stem the tide of short-term rentals.

But some apartment owners and managers are beginning to reconsider what has been an automatic stance against vacation rentals. Vacationers see luxury rentals as a cheaper alternative to a five-star hotel.

According to San Diego City Attorney Mara Elliott, San Diego's municipal code does not allow residences to be turned into short-term rentals. The city is currently considering new rules in this area.

RELATED: The hottest hotel in town is an apartment building (SDUT)

RELATED: Short-term rentals now allowed in San Diego, city attorney says (SDUT)