Mountain View Voice

News - October 15, 2010

Google deals a no-go if Jabbari wins council seat?

by Daniel DeBolt

The election of a Google employee to the City Council could mean no new lucrative deals between the internet giant and the city for his first two years in office, thanks to a state law designed to prevent conflicts of interest.

Google employee and council candidate Aaron Jabbari told the Voice Thursday that he would have to consider resigning from either Google or the City Council if a contract were proposed between Google and the city for just about anything, including an office building development or city land lease. Agreements with Google bring in $5.3 million in land lease revenue for the city's general fund as Google's headquarters sits on city property. The city's finance director, Patty Kong, said another $11.85 million is received in property taxes from Google.

The city would be blocked from approving several new office buildings that Google has proposed but put on hold in recent years, whether Jabbari abstained from the decision or not, under California state code section 1090. It prohibits the City Council from making "contracts" with the employers of council members under certain circumstances. The law is designed to make sure council members are acting in the public's benefit rather than their own.

"That would leave me with the choice of resigning from the council or my job," if a contract between Google and the city was proposed within his first two years on the council, Jabbari said.

There's a long list of caveats, however, and non-management Google employees on Google's payroll more than three years are among those mostly unaffected by the law. The law calls them "remotely interested" rather than "financially interested." A "remotely interested" council member would not block contracts with Google.

Jabbari would be "remotely interested" if he had worked at Google for more than three years, but the 21-year-old has only worked at Google for a year. The three-year law was apparently designed to keep companies from hiring politicians to do their bidding on City Councils.

"The spirit of the law is basically to prevent a company from stacking the council in their favor," Jabbari said. But Jabbari thinks that any "reasonable observer" would see that he isn't trying to represent only Google's interests.

Similar story in Palo Alto

Similar problems occurred in Palo Alto when Stanford University vice provost LaDoris Hazzard Cordell was elected to the Palo Alto City Council in 2003. The Palo Alto city manager's office reported that a change in the law would be required in order to continue working with Stanford on agreements such as fire services, transportation services or even sharing the costs of a new stoplight.

"The Attorney General has expressed the opinion that development agreements are among the 'contracts' covered by section 1090," said the Palo Alto city manager's office in the report. "This means that, while negotiations on such development agreements may continue until Ms. Cordell takes office, they would need to cease at that time."

And it's not just new contracts that would halt.

"Renegotiation, extension, or modification of an existing contract qualifies as 'making' that contract anew," the report said.

City attorney mum on the issue

City Attorney Jannie Quinn did not want to weigh in on Jabbari;s situation, saying it would be inappropriate for her to "insert herself in an election." Jabbari said Quinn told him to seek his own legal advice.

But in a memo to council candidates Quinn notes that "the city's ability to enter into a contract can be severely restricted" under section 1090. "Except for a few limited circumstances, the city is prohibited from entering into a contract with any such entity if a council member is financially interested in the contract, even if that Council member does not participate in the decision to enter the contract."

Waylonis not affected

As a Google employee for over three years council candidate Dan Waylonis does not have the same problem Jabbari has and would apparently not block the city from entering into contracts with Google. He appears to pass all of the tests in section 1090 to qualify as "remotely interested," and claims that City Attorney Jannie Quinn basically told him as much. And that is despite the fact that he owns between $100,000 and $1 million in Google stock options, which he says do not pay him dividends. His stock earnings must be more than 5 percent of his annual income or more than 3 percent of Google's stock to make him "financially interested."

Waylonis also reports that he makes more than $100,000 a year at Google. Jabbari makes less than $100,000.

Council member and lawyer Mike Kasperzak said he was aware of the section 1090 issue, but said he was glad Jabbari was running anyway.

"It inspires other young people to think being 21 means I can get involved in this stuff," he said. "I'm glad he's running."

E-mail Daniel DeBolt at ddebolt@mv-voice.com

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