Saturday, July 4, 2009

Grand jury finds council member had conflict of interest

PRIME OF LIFE: Robin Lowe denies breaking any laws, got advice from attorney.
By CHARLES HAND / The Valley Chronicle
Published: Thursday, July 2, 2009 7:24 PM CDT

Robin Lowe says she broke no laws and made no mistakes in her relationship with Prime of Life, despite what a Riverside County grand jury says.

The grand jury found that Lowe had a conflict of interest serving as both the paid executive director of Prime of Life and a member of the Hemet City Council, which provided a $20,000 of the $48,000 Prime of Life annual budget.

Lowe said that, if her relationship with Prime of Life as a member of the Hemet City Council was inappropriate, it was because she got faulty legal advice from former City Attorney Julie Biggs.

Lowe said Biggs cited an exemption from California conflict of interest law for nonprofit organizations, which Prime of Life was.

Biggs was not the only one who did not find a conflict of interest.

A report from current City Attorney Eric Vail and interim City Manager Len Wood earlier this year found no conflict of interest under California law.

“We pay our attorneys an awful amount of money to be right,” Lowe said, and she expected the advice to be accurate.

Lowe has since resigned as executive director and Prime of Life is going out of business.

Three other members of the City Council said that, regardless of legalities, Lowe’s relationship with Prime of Life created the appearance of a conflict of interest.

Jim Foreman, Robert Youssef, and Jerry Franchville said they ran on a platform of transparency in city government and a rigid code of ethics, which ending the city’s relationship with Prime of Life helps implement.

“I realize there is a public perception that something is wrong,” Lowe said, “but there isn’t.”

Youssef agreed that there is such a perception.

“There may not have been a legal conflict of interest, but there’s a perception,” he said.

Foreman said he agrees with the grand jury report calling Lowe’s relationship a conflict of interest.

“I agree it was a conflict of interest. Even if there wasn’t, there was the perception there was,” he said.

“This was definitely a concern of mine during the campaign,” Franchville said. "I think we're taking the right steps to clean house a bit."

Youssef, Foreman, and Franchville were elected to the council in November in a sweep that saw all three council incumbents replaced.

Mayor Eric McBride was on vacation out of the area and could not be reached, but, in the city’s press release on the grand jury report, he was quoted as saying, “The council acknowledges that in the eyes of the public the circumstances discussed in the report create a strong perception of conflict and contract mismanagement.

“In response, the entire council will continue pushing for transparency, a higher level of accountability, and the highest ethical standards in the city’s dealings.”

The grand jury report called on the city to concede the conflict of interest and to take steps to correct it.

Youssef said the council and city management have begun work on a new set of ethics rules they hope will preclude a recurrence of the Prime of Life issue.

The council already cut off its annual appropriation, which came not from the financially strapped general fund, but from federal Community Development Block Grant funds.

Lowe collected a $28,000 salary, more than half the Prime of Life budget.

The grand jury report said the salary combined with $5,000 in employment taxes, $2,000 in accounting fees, and $2,500 for insurance to consume 77 percent of the Prime of Life money.

The other major source of income was Central County United Way, which provided only a small share of its 2009-10 allocation.

Lowe said the city was helping to finance Prime of Life before she was elected to the council 14 years ago.

She took the executive director position because it was a good fit for her and her interest in helping seniors.

Prime of Life linked up seniors and services designed for them, particularly for seniors with health problems, limited mobility, and finances.

It also served as an employment retraining ground for seniors under a contract with the Riverside County Office on Aging, which hired the employees at minimum wage and allowed them to do referrals in preparation for other employment.

Lowe also denied responsibility for Prime of Life’s failure to file tax returns for several years, which resulted in the California Franchise Tax Board withdrawing the agency’s tax exempt status.

Lowe said she counted on advice from the contract bookkeeper, who said the filings were not necessary for a nonprofit that made less than a threshold amount, but said she did not know what that amount is.

Nonprofit status was restored after the filings were brought up to date.

She also said she did not know of a contractual requirement to file a written report on Prime of Life operations with the city every 60 days.

“I submitted a verbal report annually,” she said.

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