Mamaux Can’t Vote on Carlsbad Tax

The state Fair Political Practices Commission has ruled that Carlsbad City Councilman John Mamaux must disqualify himself from voting on a $109-million tax district that would help his employer develop property in the city.

A commission spokeswoman said the commission’s legal staff is still reviewing allegations that Mamaux has violated conflict-of-interest laws in previous actions.

In a letter made public Monday, the commission’s legal staff told City Atty. Vincent Biondo Jr. that Mamaux would have a financial conflict of interest if he participated in a decision benefiting Center Mortgage Co., C&N; Bank Corp. or Center Development.

Mamaux is president of Center Mortgage, a subsidiary of C&N; Bank Corp., solely owned by Dean Greenberg. Greenberg also owns Center Development, which has 225 developable acres within the proposed tax district.

The City Council is considering a plan to create a Mello-Roos Community Facilities District, which allows a city to tax developers long before actual construction takes place, so it can accumulate money for major street and freeway interchange improvements and other projects.

The state commission advised Biondo that, because Center Development owns property in the proposed district, any decisions to create the district “will benefit the property owners by permitting development (at) an earlier time than would be permitted without the creation of the district.”

Development would occur sooner because tax revenue would be available to pay for streets and other facilities that must be built first.

“The ability to develop the property sooner may result in an increase in the fair market value of the property,” the watchdog agency concluded. “Thus, it appears the effect of the decision will be material.”

Because Greenberg owns Center Mortgage, C&N; Bank Corp. and Center Development, the commission held that all three should be treated as a source of income to Mamaux when considering the state’s conflict-of-interest law.

Also, the commission found there would not be an overriding public benefit to justify Mamaux participating in a decision to create the Mello-Roos district.

However, the letter does not discuss whether Mamaux acted properly last Nov. 14 when he made a motion during a council session directing the city staff to prepare documents to form the Mello-Roos district.

The motion was approved 5 to 0, including a vote from Mamaux, according to a copy of the council minutes.

The commission’s letter, signed by John W. Wallace, an attorney in the legal division, said that “nothing in this letter should be construed to evaluate any conduct that has already taken place.”

Since early February, the commission has been reviewing allegations by a local attorney, Thomas W. Smith, that Mamaux has taken several actions that pose a conflict of interest in his role as a councilman.

Although the commission has acknowledged it is evaluating Smith’s allegations, spokeswoman Sandra Michioku on Monday declined to say whether Mamaux’s Nov. 14 vote initiating staff work on the Mello-Roos district is part of the review.

“Until the case is closed, we will not have a comment,” Michioku said, adding that the review of Smith’s complaint is “still open.”

The commission’s letter is a reply to City Atty. Biondo, who on March 21 asked for an opinion on whether Mamaux may act on decisions to create the Mello-Roos district. (The district is named after two state legislators whose bill established such districts in 1982.)

The letter is dated July 6, but was released Monday by Smith, who said it proves that Mamaux “has used his position on the council to lobby for that company. That is influence peddling.”

Mamaux, who has denied wrongdoing and accused Smith of “political harassment,” said Monday that he had already decided to abstain from council deliberations on the district, as he did when the matter received a hearing last week.

City officials confirmed that Mamaux did not participate in the council discussion of the matter July 10.

Mamaux, asked whether he agreed with the commission’s opinion that he must disqualify himself, said: “I’m not going to argue with the FPPC. I abstained on it anyway. I don’t want any questions. I abstained voluntarily; I was going to do it anyway.”

He said he found some factual errors in the commission letter but that he did not want to discuss them.

Further, Mamaux believes there was no impropriety in his Nov. 14 vote, saying, “Everything I do is under advice of counsel.”