Almanac

News - April 14, 2010

Council rejects call for investigation of Marsala's $500K loan request

by Andrea Gemmet

Atherton's city attorney may have determined that Councilman Charles Marsala broke no California conflict-of-interest law when he requested a $500,000 loan from a town resident preparing to sue the town, but two of his city council colleagues remain unswayed by her analysis.

At a rancorous and well-attended special City Council meeting held Wednesday, April 7, the divided council took no further action in the matter, despite Mayor Kathy McKeithen's call for an investigation.

"I can see where this is going, that I'm not going to garner three votes to go any further," she said.

Mr. Marsala has admitted that last August he sought a loan from Jon Buckheit, a man who had filed one lawsuit against the town and was about to file another. City Attorney Wynne Furth said that her inquiry into the matter led her to believe that Mr. Marsala broke no laws by asking for the loan against his house. Mr. Buckheit declined to make the loan.

"In retrospect, if I had to do it all over again, I probably would not have discussed the possibility of a loan with Jon," Mr. Marsala said, reading from a prepared statement at the meeting. He said he never thought that Mr. Buckheit, with whom he had a social relationship, would end up suing the town.

Mayor McKeithen said there was more to the matter than was revealed in the city attorney's five-page memo summarizing her analysis of the matter. She added that she had filed a public records request for the more extensive confidential memorandum Ms. Furth prepared for the council, since she was prohibited from speaking about it.

"It was clear that we were engaged in active litigation at the time council member Marsala requested the loan, and council member Marsala should have known better," Ms. McKeithen said.

Mr. Buckheit said that Mr. Marsala must have been "in a coma" if he didn't realize that a lawsuit was in the works. After the meeting, Mr. Buckheit told The Almanac that Mr. Marsala made no specific request for quid pro quo when he asked for the loan, but that he doubted such arrangements were ever explicit.

Mr. Marsala said he will recuse himself from any future discussions regarding Mr. Buckheit's lawsuit.

In October, Mr. Buckheit filed a civil rights lawsuit in federal court in San Francisco against the town of Atherton and two of its police officers over the handling of a domestic dispute at his house in 2008. Mr. Buckheit was arrested on suspicion of domestic violence but never charged, and he was later granted a declaration of factual innocence from a San Mateo County Superior Court judge.

Councilman Jerry Carlson chided Mr. Marsala, but said the town needed to focus on more important matters, such as the California high-speed rail project.

"There are times that I have questioned your judgment, and there were times you've been right and I've been wrong," Mr. Carlson said to Mr. Marsala, referring to various fees and taxes authorized by the council that were subsequently rescinded and refunded. "We've had lapses of good judgment, and you have had your own lapse of good judgment."

Councilman Jim Dobbie, on the other hand, shared Ms. McKeithen's views.

"There's a standard of ethical behavior we are all supposed to uphold, and this standard was not upheld by Mr. Marsala," said Councilman Jim Dobbie.

Councilwoman Elizabeth Lewis defended Mr. Marsala's record during his two terms on the council, and accused Ms. McKeithen of trying to discredit him.

"Mr. Marsala is a stand-up guy," she said. "I'm embarrassed to be on the council at this time. I'm sad we can't work together."

Nineteen people spoke during the meeting's public comments, both supporters and detractors of Mr. Marsala.

Atherton resident Joan Solari was one of several people who called for Mr. Marsala to step down from the council.

"Regardless of whether Charles Marsala broke the law, there are a huge number of Athertonians here to let you know that we do not feel good about what's going down," she said.

John Johns, the town's former finance director, called for an investigation by the California attorney general, or even the United States attorney general. Mr. Johns, who announced that he is on the cusp of settling his wrongful termination lawsuit against Atherton, said that Mr. Marsala's actions needed to be viewed as part of a pattern of behavior.

"I have reason to believe Mr. Marsala has abused the public trust," he said.

Jeff Wise, an Atherton resident who frequently attends council meetings, said he believes every member of the council is working for the best interest of the town, but that council members are doing an "abysmal" job of interacting with each other.

"The town needs to move on. I accept Charles at his word," Mr. Wise said.

Randy Lamb, a member of the Atherton General Plan Committee, decried the "lynch-mob mentality" of the proceedings. "This is just Atherton politics as usual. It's an election year," he said.

Besides the uproar over the loan request, Mr. Marsala also faced questions about whether he met residency requirements for council members. In January, Mr. Marsala was called on the carpet at a council study session to confront rumors that he no longer lived in town.

Mr. Marsala said he has been renting out his home on Emilie Avenue since December to a Stanford Hospital patient and her family, and that he expects to move back in by the end of the month. In the meantime, he has remained in Atherton and rented houses or rooms in the houses from friends, he said.

As long as Mr. Marsala has not moved out of town, he is still a resident, said City Attorney Furth.

"He continues to be a legal resident, and therefore he continues to qualify to serve on the council," Ms. Furth said.

A motion to accept the city attorney's report that Mr. Marsala did not violate conflict-of-interest laws, and that he is and has been a legal resident of Atherton, failed for lack of a majority. Mr. Marsala recused himself from the 2-2 vote, with Ms. McKeithen and Mr. Dobbie opposed.

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