Phil Rath fined again

San Diego influence peddler sanctioned $5000 by state

Phil Rath failed to reveal the cash he had derived through his dealings with Affirmed Housing Group.
  • Phil Rath failed to reveal the cash he had derived through his dealings with Affirmed Housing Group.

Phil Rath, a prominent member of San Diego's well-compensated local influence peddling corps and chairman of the board of Civic San Diego, has agreed to pay a $5000 fine to settle conflict-of-interest charges brought against him by the state's Fair Political Practices Commission.

Rath served as aide to Bill Horn and Jerry Sanders, yet his name appears on this Bob Filner fundraiser.

Rath served as aide to Bill Horn and Jerry Sanders, yet his name appears on this Bob Filner fundraiser.

The story begins in the fall of 2013 as a typical lobbying deal between Rath – once an aide to county supervisor Bill Horn – and Affirmed Housing Group, a so-called affordable housing developer seeking favor with the supervisors in getting public money, per a stipulated agreement with Rath, set for approval by the commission at its November 15 meeting.

"Rath holds a 49% ownership interest in Rath Miller, LLC," says the document.

"On November 8, 2013, Rath Miller entered into an agreement with developer Affirmed Housing Group to provide public affairs services in connection with Affirmed’s efforts to obtain funding from the County of San Diego for an affordable housing project located in San Marcos.

"In compensation for the firm’s services, Rath Miller received its first payment from Affirmed for $22,000 on December 18, 2014. The second payment in the amount of $100,000 was initially due on March 31, 2015, but the deadline was extended in response to a request from the client and the payment was ultimately made on August 8, 2015."

The intrigue started in July 2015, when GOP mayor Kevin Faulconer appointed Rath – once an aide to Faulconer's mentor, ex-San Diego mayor Jerry Sanders – to the board of Civic San Diego, the city's redevelopment arm.

Civic San Diego is responsible for mapping the destination of millions of dollars in public housing subsidies, and Affirmed soon showed up on the city's doorstep for a piece of the pie.

"On January 5, 2016, in response to a Request for Proposals issued by Civic San Diego, Affirmed submitted one of three bids to develop a 143,800-square foot mixed-use project at the northwest corner of Hilltop Drive and Euclid Avenue in the Chollas View neighborhood of Encanto Neighborhoods Community Planning Area in the City of San Diego," per the commission document.

"On June 8, 2016, the Real Estate and Budget/Finance Joint Committee of the Civic San Diego Board voted to approve the staff recommendation to enter into an Exclusive Negotiation Agreement with Affirmed to develop the Hilltop & Euclid project. Rath was a member of the Committee and participated in this matter."

Though state conflict of interest and transparency laws required that Rath "disclose Affirmed as a source of income to Rath Miller on both his assuming office statement and his annual statement for 2015," the veteran lobbyist failed to reveal the cash he had derived through his dealings with the firm, according to the ethics findings.

"Rath did report his ownership of Rath Miller and four reportable sources of income of $10,000 or more received through the firm, but he failed to report his portion of income received from Affirmed during the reporting periods."

On June 22, 2016, Affirmed's exclusive negotiating deal went to the full Civic San Diego Board, which voted 6-1 to recommend it to the city council for final approval, the account says.

"Rath participated in this matter and voted in favor of the motion," the filing says. "Rath stated, '[I]t’s clear that this is the winner of this contest... and who I think we should proceed with.'"

In short, says the stipulation, "Rath had a conflict of interest due to this source of income when he participated in the discussion of and then voted for a governmental decision regarding Affirmed."

In levying a $5000 fine, half of the maximum $10,000 penalty prescribed by law, commission staff recommends that $2000 be apportioned to Rath's reporting violations, and $3000 because he "participated in and ultimately voted twice on a matter that directly involved a source of income to Rath."

A prior fine regarding the same matter levied against the influence peddler in August by San Diego's ethics commission in August totaled $11,000.

"These violations are extremely egregious because they undermine public confidence in the integrity of the City’s decision-making process,” ethics commission chair Deborah Cochran was quoted as saying in an August 9 news release regarding the city penalty.

"Chair Cochran noted that the violations in this matter were exacerbated by the Respondent’s failure to disclose the income he received from Affirmed Housing on the Statement of Economic Interests he filed with the City Clerk. The combination of disclosure and conflict of interest violations 'necessitated the imposition of a stiff penalty' according to Chair Cochran."

Before setting up their lobbying shop, Rath and current business partner, Kimberly Hale Miller, along with ex-Jerry Sanders media handler Rachel Laing, previously worked for Public Policy Strategies Inc., where they staged a January 2013 fundraiser to retire the campaign debt of subsequently ousted San Diego mayor Bob Filner.

Rath Miller has also been an avid fundraiser on behalf of the county supervisorial aspirations of termed-out San Diego Councilman David Alvarez,coming up with a total of $11,900 at two June 2017 events. Defeated councilwoman Myrtle Cole was the beneficiary of $5205 from a fundraiser held by the firm in April of last year.

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So isn't this $5000 fine basically a slap on the wrist, a cost of doing business by Rath Miller? Shouldn't there be a criminal aspect to this sort of chicanery?

You might want to take a look at the Political Reform Act. Criminal enforcement is handled either by the Attorney General or the appropriate District Attorney. If the FPPC is involved then it is either an administrative or civil action. In this case, it seems to be an administrative action, where, if memory serves, a $5,000 fine per violation is the maximum penalty. It appears as if the actions did not rise to the level of criminal violations of the conflict of interest laws. But, as I said, if you really want to know, you can look at the above mentioned Political Reform Act. My sense though, is the you won't bother.

Obviously, the FPPC doesn't handle criminal matters. Nobody said otherwise. And obviously the AG and DA do handle them. There's no reason for civics lessons here; we know that information. Plus some READER reporters (myself included) have done legal reporting over the years.

A couple of points. I highly doubt that most of the readers here actually know what the FPPC does and were in fact NOT aware of the information provided. Secondly, the FPPC does handle criminal matters and is specifically authorized to be represented by its own lawyers in criminal court, unlike most state agencies, but normally refers enforcement. ie prosecutions due to time and financial constraints. You may have done "legal reporting over the years", what ever that means, but most certainly I do not consider you to be a reporter. A know it all, yes, but a reporter, most certainly not. And I sincerely doubt you knew anything of what I said. If you did, you would not have had the need to ask your original question.

Just my opinion.

Opinions vary.

He was fined $5,000 on a minimum of $122,000 in income? That's not even 5%. I'm sure Rath Miller spends more on stationery.

Unless there is some further consequence with teeth, such as being barred from bidding on public contracts or serving on public boards, there's every incentive to simply budget for ethics violation fees as another sunk cost of doing business.

FYI (from the FPPC website): "The FPPC closes approximately 800 - 1,200 cases each year. Hundreds of these cases result in administrative penalties and fines imposed on the violator. " [Like the SEC, they do not conduct criminal proceedings; these are civil procedures. They do NOT put people in jail or prison.] "A violation of the (Political Reform) Act can be pursued in three ways: 1) Administrative proceedings by the Enforcement Division; 2) Criminal prosecution by a local district attorney or the state attorney general; or 3) Civil action by the public, certain government agencies or the Enforcement Division." As I stated accurately, the FPPC doesn't itself pursue criminal charges; only civil.

A couple of thoughts. Perhaps you need to read my comment again. I never said they put people in jail. What I said was the FPPC does handle criminal matters and they are the ones who refer cases for prosecution. From the FPPC website: During an investigation the Enforcement Division may uncover evidence of criminal misconduct, or an outside agency may uncover evidence of local violations of the Act. It is common in these circumstances for each agency to notify the other and collaboratively enforce California law. In addition, the FPPC also assists district attorneys and authorized city attorneys in analyzing, investigation and prosecuting local violations of the Act. So, according to their own website, your statement was indeed INACCURATE.

Just to clarify someone's misunderstanding of a simple phrase: legal reporting over the years, "what ever that means, " It clearly means that I've been a professional journalist for many years, published in more newspapers and magazines than I can remember. And during those years I reported on some civil and criminal trials. Covering the courts is called "legal reporting."

Just to clarify someone's misunderstanding, you obviously don't understand sarcasm and mocking. And while you clearly have been involved in journalism for a long time, apparently too long at this point, your current claim of professionalism is laughable at best, except in the strictest interpretation in which you get paid for your endeavor. So let me ask, do you actually have a Master's in journalism? Have you by chance worked as a reporter in in cities like Chicago, New York, Washington D.C., the San Francisco Bay area and Silicon Valley and Los Angeles? Have you perhaps won the Associated Press Public Service award and been recognized for your work by the Society of Professional Journalists and the San Diego Press Club. I believe you may have referred to yourself as a freelancer at one point, so have you maybe had your work appear in news outlets such as the Los Angeles Times, the San Jose Mercury News, the New York Daily News, Wired.com, the San Jose and San Diego Business Journals, the San Diego Union Tribune and Reuters? If you have done those things, then you could justifiably refer to yourself as a professional reporter and journalist, much like Marty Graham, who actually IS a professional. There's on old saying. If you have to keep telling people how good you are and how much you've done, well, I think you know how the rest goes.

Yes, there SHOULD be a criminal aspect to such violations. But if you depend upon the DA in San Diego County to prosecute such things, or any other political corruption, you will be sorely disappointed. This new DA, cast in the same mold as her predecessor, has no appetite for going after crooked politicians or their minions. I"m told that she's really tough on "human trafficking" though. Which of those sets of criminal behavior does more damage and affects more citizens? There's your answer.

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