State probe casts a shadow on new San Luis Obispo mayor

January 6, 2011

By  LISA RIZZO and KAREN VELIE

Jan Marx

A three-year state investigation into the funneling of cash and gifts to the campaigns to stop Ernie Dalidio’s proposal to develop his San Luis Obispo farmland has revealed that the city’s newly-elected mayor, Jan Marx, was part of the alleged illicit effort.

Last October, the California Fair Political Practices Commission (FPPC) levied $80,000 in fines against Tom and Jim Copeland, and banker David Booker for committing 16 campaign violations in their secretive battle against Dalidio’s project, proposed for south of the Madonna Plaza shopping center.

The state’s probe includes 1,414 pages of reports and documents and was recently made public through a Freedom of Information request. The documents identify Mayor Marx, an attorney, as a leader in the campaign to stop Dalidio’s development, which was slated to directly compete with commercial properties owned by the two Copeland brothers.

In 2000, while on the San Luis Obispo City Council, Marx and former councilman John Ewan served as representatives in negotiations to annex Dalidio’s proposed project into the city. Marx and Ewan bargained with former San Luis Obispo County Supervisors Katcho Achadjian and Peg Pinard until they came up with a proposal that included 46 percent open space in the project, and a contract with Dalidio to purchase additional lands to be designated as open space.

All four negotiators signed the agreement.

Much to the surprise of other council members, Marx voted against the project when it went in front of the City Council. After she was on the losing end of the vote, she helped launch a political campaign to stop the project.

“She (Marx) then did an about face and said ‘No,’ ” Ewan said. “She has said that the end justifies the means. It makes me think that she was not negotiating in good faith.”

A thorough review of the voluminous FPPC documents confirms that Marx was involved in the campaigns and that she made a $3,000 loan to help launch the effort in 2004.

The FPPC, in its decision and order  in which the Copeland’s did not contest, said the Copelands’ LLC, Responsible County Development, was the “sponsor” of the campaign against Dalidio’s project.

In an interview with CalCoastNews, Marx said, “I wasn’t against the project, I wanted them to follow the rules and have 50 percent open space.”

When asked for a reaction to the state’s repeated documentation of her involvement in the campaign against Dalidio, Marx said that even though she along with several other people founded the campaign against the project, she was not involved in the inner working of the campaign as it progressed.

But the FPPC documents reveal a different story.

A trail of receipts, credit card statements and reimbursement checks shows that Marx handled everyday campaign duties from the start of the fight in 2004 through the second election in November, 2006.

She also printed campaign flyers, purchased campaign supplies and handled some advertising with local media. As late as August, 2006, just months before the election, the campaign phone service was paid with Marx’s credit card and not yet listed in the campaign’s name, according to FPPC documentation.

The anti-Dalidio development campaign has gone by many names, including Citizens for Planning Responsibly. It was first known as “Save San Luis Obispo, A Committee against Measures A, B & C” during the April, 2005 election and was renamed “County Coalition for Local Control (CCLC), No on J-06” for the November 2006 election.

Front and center in the investigation is a series of substantial loans that were made to the Save San Luis Obispo campaign that were later forgiven. Booker contributed $750 and together with his wife, another $98,000 in loans, according to contribution forms and promissory notes obtained by CalCoastNews.

The Bookers forgave more than $89,000 of the loans.

The Copelands, along with their limited liability companies, San Luis Obispo Court Street and San Luis Obispo Downtown Centre, contributed $87,500 with $58,000 of that in loans. Only $20,000 was paid back while $38,000 was forgiven.

Developers and commercial property owners, many with financial motives to stop Dalidio, provided the bulk — more than 80 percent — of the funding for the committees opposing Dalidio. And while some developers donated funds using their name and legal addresses, others, such as the Copeland brothers and former North County developer Kelly Gearhart, who contributed $20,000, hid their identities behind company names and post offices boxes.

The Political Reform Act requires that contributors provide a street address and their full legal name.

Local clerk recorder employees are responsible for inspecting campaign filings to make sure laws are being followed. These employees said they repeatedly told Dalidio’s opponents that they were breaking campaign laws and that they needed to correct the filings and provide addresses and not post offices boxes.

“Please be aware that the State Franchise Tax Board periodically audits these files and will often fine a committee that has inaccurate or incomplete filings,” said Tami Bisantz, county clerk recorder assistant, in a letter to the CCLC, on Oct. 4, 2006. “When you amend, you will need the complete cover page along with the amended pages attached.”

The group appears to have elected to keep their donors identities hidden and never provided an amendment with the solicited corrections.

In an odd twist last week, the County Clerk-Recorder’s office told CalCoastNews that it lost part of the file for the CCLC about a year ago. Last week, Bisantz asked the committee if they could re-file the missing documents following a CalCoastNews request for the complete file.

During their fight against Dalidio’s development, the committees were regularly under fire by the media for transgressions such as not paying rent, claiming the use of a Copeland owned building as a donation and sending misleading mailers.

The FPPC investigation confirmed the allegations.

Just days before the Nov. 7 election, it was Marx who was tasked with publishing an apology on behalf of the CCLC following a deceptive mailer that resulted in criticism from the media and the San Luis Obispo County Clerk Recorder. The campaign mailed out absentee ballot applications to potential voters, which appeared to show that the County Clerk Recorder was in favor of “No on J.”

The campaign apologized for their “inadvertent error” through a correction that Marx personally published in The Tribune, records show.

The FPPC investigation report says that for four months in 2005 the Copelands donated office space to the committee without disclosures by the campaign as required by law.

When asked about the failure to report the donation of office space from the Copelands, Marx said, “I don’t think we had an office. We met in each others’ homes.

“We were a grassroots group.”

In 2006, while a Copeland-owned building on Monterey Street served as the CCLC campaign headquarters, the local media began writing about the group’s failure to properly report the office space donation.

Shortly before the election, Suzanne Fryer, the Copeland’s corporate attorney and one of the principals in the anti-Dalidio campaigns, drew up a contract between CCLC and the Copelands to pay $7,500 for four months rent. The agreement says it “was entered into and effective as of July 10, 2006.”

However, according to dates on the bottom of each page, the contract was not penned until Oct. 29, 2006, months after the campaign took occupancy of the space.

The FPPC investigation also noted that Fryer failed to claim $2,337 in copies and paper she donated to the committees battling against Dalidio.

Fryer did not return requests from CalCoastNews for comment.

Marx, asserting her limited involvement, said she was unaware who was making donations to the anti-Marketplace committees, even those donating more than $10,000.

However, others involved in the campaign claim Fryer and Marx headed up the various committees that battled Dalidio and that they must have known the names of the big donors.

“Jan (Marx) and Suzanne (Fryer) sort of ran it,” said Rosemary Wilvert, president and spokesperson for Citizens for Planning Responsibly. “We would get legal advice from Jan and Suzanne. They would tell me how to say things to the media.

“I imagine they (Marx and Fryer) knew but they did not tell us,” Wilvert responded when asked if Marx and Fryer knew the donations came from the Copelands.

Under persistent questioning about her anonymous role in the fight against Dalidio, the mayor was evasive and then chose not respond to further requests for comment.

The FPPC investigation found that the Copelands and Booker made contributions to the committee through an LLC rather than their legal names, failed to disclose the true source of contributions made to the campaign and did not file a semi-annual and late contribution report as required by campaign laws.

The Copelands and Booker, among other contributors, had worked to conceal their identities from voters for four years despite public outcry for disclosure, even though California campaign rules require the transparency of donors.

In addition, the report notes that Booker, the agent for service on the Copeland’s LLC, Responsible County Development, was also the president of First Bank of San Luis Obispo, the bank the illegal donations were funneled through.

Even though the FPPC investigation does not name others suspected of contributing to the campaign through the Copelands’ LLC, Dalidio’s attorney, James McKiernan of San Luis Obispo, said that a review of the FPPC records makes it appear other rival developers used the LLC to funnel funds to fight Dalidio’s development.

These developers are likely to be exposed if Dalidio elects to re-file a lawsuit against those who illegally donated money though the LLC, McKiernan said, adding that Dalidio is exploring the revival of a lawsuit, which would likely include a subpoena of the LLC’s bank account records.

As part of their investigation, the FPPC also looked into Booker’s 2004 unsuccessful run for mayor of San Luis Obispo, a campaign that included $30,000 in loans the banker made to his campaign and then forgave. The report notes that Dalidio’s Marketplace Association spent $2,732 opposing Booker while Copeland, through several LLCs and family members, supported Booker’s campaign.

Booker did not return requests for comment.

In July, 2004, the development plan for Dalidio’s marketplace project was approved by the San Luis Obispo City Council. However, a citizen’s referendum placed the issue of development on a 2005 special election ballot as Measures A, B, and C, which was defeated by city voters.

After this loss, the previous “Marketplace Project” proposal was revised and submitted to San Luis Obispo County as the “Dalidio Ranch” initiative and the Board of Supervisors placed it on the November, 2006 ballot as Measure J, which was approved by voters countywide.

The Dalidio Ranch project is slated to include a 13-acre organic farm, a seven-day-a-week farmers’ market, a soccer field, a Monarch butterfly preserve, a 24-hour drive-through pharmacy, retail development, 60 units of workforce housing and the construction of an overpass connecting U.S. Highway 101 and Prado Road.

The 131 acres of Dalidio land currently is in unincorporated county territory just south of the San Luis Obispo city limit. Officials from the city have repeatedly said they want the Dalidio project to be annexed into the city and wonder if the bad blood between Dalidio and Mayor Marx could thwart their plans.

“I am not going to work with the city with Marx on the council, after what she has done,” Dalidio said. “She has been in the pocket of the Copelands.”


Loading...
Kevin Rice

Favorite quote:


Marx said, “I don’t think we had an office.”


She can’t remember having an office? Ha! Likely.


hotdog

Nice lynch mob going on, since she has not been charged with anything yet. But to offset all the warm and fuzzy feelings for poor Ernie it is my memory his development would have caused all of us to ante up

for a 10-20 million dollar over pass at 101. And keep in mind he inherited all that land and was going to turn prime ag into more crummy stores that we don’t need, and many don’t want. Whether or not there were unfair practices employed to thwart his efforts he had huge bucks to further his goals. And as his supporters pointed out endlessly, he has been trying to do this for something like 20 years and has never been able to convince whoever needed convincing to let it go forward-so obviously his plans were flawed. And finally I believe the latest EIR was either deficient or pointed out serious flaws in the plan that the authorities chose to ignore.

This story has two sides, as most do.


Kevin Rice

“Charges” are not required for one to be despicable, unfair, or dirty.


Second, plenty of people would be happy to have that overpass, and the stores. The city more than wants the sales tax.


Third, Jan Marx herself approved the Dalidio project before she back stabbed it (read the article).


Bert

As far as having the stores… I have lived in a nice smaller town in Southern California and saw it ruined by building and the ok to build large malls and box stores. It amazes me that people get a hard on when they hear that Target and Olive Garden are coming to SLO. It ruins cities and SLO is quickly on its way to becoming another sell out of a town. If people want to buy their Chinese goods that they do not need then drive your ass over the hill or to Santa Maria. I guess my migration North is inevitable.


SLOChildrenAtPlay

It’s not stores that ruin a city, it’s the people who live there. San Luis Obispo is becoming just another area of SoCal sprawl not because of the stores, but because of the SoCal people moving here to escape what they ruined. As long as you keep fleeing instead of fixing, nothing is ever going to get better where you live. SLO is not being ruined by chain stores, it’s being ruined by people LIKE YOU “Bert.” You are turning SLO into a SoCal refugee camp full of people just like you who will simply flee an area, rather than fight for it. Your “migration North” is not only inevitable, it is also welcomed and encouraged. We who have spent and made our lives here will somehow cope with both the big-box stores, and your departure.


Crusader

Sweet… ;)


justme

Hey, Slo Children…… Listen to yourself, you see, it’s time for you to “flee”. Bert knows when it’s time, you by the very fact that you’re bitter and fed up are ready too, but you’re going to stay here and eat your heart out for a lost era that SLO will never be in again. I guess you think shopping will make all the bad things go away. Good luck with that.


Crusader

Go home, LA!


justme

What? Bert’s the problem? Does he exhale smog? He helped the city he left by reducing the pop. Fight for what, Dude. You’re not making an argument for anything , your just arguing out of frustration. Bert makes sense, you make hot air.


easymoney

Irony at it’s very best.

“Migration North” is one of the main reasons why this has become such a problem. If this migration north did not happen we would still be a sleepy little town and would not need all those mean & nasty big box chain stores, selling all those “Chinese goods”…


“San Luis Obispo is becoming just another area of SoCal sprawl”, so well put and factual.


BeenThereDoneThat

Dog!! I love your lynch mob joke. I figure it must be as you have joined all us posters in past on things you agree with. Calling the kettle black?? I understand if you disagree with but PLEASE save the lynch mob mentality WORN out, I can’t defend and nothing else is left, arguement.


He inherited the land?? SO WHAT!!! I must have missed that, that is a major crime now??? Nice spin in trying to make your arguement in making him an elitist. If you don’t have the same take on the Copelands as such also, again your spin don’t fly.


20 years trying to get done? Yea your right. Twenty years of dealing with unfair practices such as this article and all the other bull. Again nice spin.


It does have two sides. I think that if you open your eyes, which are so polarized in your dislike for growth, then you might see it.


moderator

“hotdog has a problem ” please focus your comments on the story at hand and not about another user’s posting history and poitical affiliations.

The derail discussion and related commentary removed .


Turquoise

This is an important comment, not full of innuendo like others here, and CCN hides it?


What gives?


Moderator

The comments that are “Hidden due to low comment rating.” are hidden with down votes, by the readers, not the staff.


Move along…….


Outtathere

Great article, and hopefully it won’t end here. It is very unfortunate that this did not come out before the election. Paul ran a clean campaign, and this “dirt” was unfortunately ignored by all forms of media. There was never any doubt that Marx was involved. It’s insulting that Ms. Marx wants us to believe that she is bright enough to be mayor of SLO, but not smart enough to know that the Copeland family was providing most of the backing, along with other SLO County developers.


Other issues not pointed out:


1. The bulk of the funding for the No on J campaign came from a few developers, and not from concerned citizens as Marx would ask us to believe. The $220,000 plus from Copeland, Booker and Gearhart comprised over 80% of the financing for the campaign which Ms. Marx is still calling “grassroots.”


2. The Pier One location on Monterey Street (owned by Copeland) where the No On J group was headquartered- and didn’t pay rent and didn’t claim the use as a donation from Copeland- was zoned retail, not office. Any other entity trying to locate a campaign office in retail zoning would have been turned down or shut down by the city of SLO. Jan Marx was at the Pier One building daily, running her opposition to Dalidio from that location. Just as she knew that they were clearly not a “grassroots group” she also knew that they were using that location as she was there daily, from set-up with big smiles on her face long before the election, until the take-down, although not as happy after losing badly in the county-wide vote. She also knew that the use was donated by Copeland. All of the members of her group that spoke against Dalidio and for Chinatown at City Council meetings for the past decade were regularly at the Pier One location, signing people up, giving out yard signs, handing out propaganda about how they were trying to “save” the downtown and protect the local merchants from Dalidio when the true intent was to limit competition and keep Copeland’s rents high.


3. Gearhart readily admitted that his contribution to the No on J was a quid-pro-quo, probably not surprising to anyone who frequents this site. Gearhart was subdividing/developing 40 acres adjacent to Dalidio’s property, fronting the freeway, into an Auto Mall. Marx promised Gearhart that with a large enough donation, her group would not oppose his project. If her group’s real issues with the Dalidio project were environmental, the same issues would have applied to Gearhart’s project- but even more so, given that the car dealerships would have no open space or greenbelt.


In reality, the issue (for Marx) was that Dalidio’s project would compete with Copeland’s retail properties downtown. Gearhart’s Auto Mall would not compete with Copeland’s downtown properties. Gearhart handed over his bribe, and was granted approvals without a word of protest from Marx or her group. Marx continues to maintain that her issues with Dalidio are environmental and has never explained the contradiction with allowing Gearhart’s project to proceed.


Outtathere

Meant to add to #1 above that the $7,500 “rent” that was supposedly paid for the use of the Pier One building for “four months” was a fraction of the rent being charged to Copeland’s other tenants on the same street. According to Copeland at the time, fair market rent was $5 per foot, so the 2,000 square feet that they were using should have been $10,000 per month, not $7,500 for four months. In reality, the group was in the location for much more than four months.


Outtathere

Sorry, so thrilled to see this finally brought out into the open that I again forgot the logical conclusion to #1 above: Given the “fair market value” of the use of the Pier One building by Copeland’s standards, and that they used the building for over a year (most of the time with paper over the windows), the value of the donated space was in excess of $100,000 which makes the Copeland/Booker/Gearhart portion about 90% of the total contributed for the “grassroots” support of No on J.


RU4Real

I hope Ernie & his wonderful attorney (Jim McKiernan) decide to go after the rest of these jerks that caused Ernie so many problems. Poor guy was put thru hell. I can hardly wait for his shopping center to get off the ground. He’s had to wait far to long.


Liberandos

Measure J was APPROVED

Measure J was APPROVED

Measure J was APPROVED

Measure J was APPROVED

Measure J was APPROVED

Measure J was APPROVED


Lewy

Unfortunately, you won’t see a shopping center there in your lifetime.


slorealitycheck

I would also like my vote back as well. How does one start a campaign to have a publicly appointed official resign? I am so disappointed about this. Dalidio has lost a lot of money over this. I think the Copelands should be banned from any more development as a punishment for their crooked immoral lack of respect for a fellow developer. I can’t imagine how Patty Andreen along with her mayor friend and Kathy Smith all fit into the city council debacle as far as ties to the Copelands and the favors they thought they would be getting with unanimous votes ~ If Andreen would have been appointed? City of Bell ~ It’s ringing here in San Luis! I am sure some peoples bells are ringing loud and clear. GET RID OF MARX! I am peeved.


Kevin Rice

Sadly, neither you nor I have the energy or money to mount a recall initiative. You have to collect over 4,000 voter signatures to cause a recall election and then you have to convince more than half the voters to vote for a recall. It will take more than this story for that to happen. However, letters to the editor and speakers at council meetings can help to inform the public of these issues.


slorealitycheck

Perhaps not the money, but the energy I am sure is definitely out there. I am willing to bet there are lots of people with big money that would be willing to help. Citizens to recall unethical mayor Jan Marx. Claim back the pride of living in a wonderful city with honest people running it for the better of the community.


Kevin Rice

Hey, I’m on board if there is enough traction to get a 50% + 1 vote. I just doubt in the big picture enough of the 27,000 voters will see the light.


smartypants

If she had any class at all, she would step down. If someone would make up some protest buttons to wear to meetings, I would buy one.


BeenThereDoneThat

MAN O MAN!!!!!!! Where to start. First off to Mayor Marx, I have always loved the fact that your name and Marxist are about the same. Hmm.


Second. It got me thinking of the line from the end of the movie Backdraft when Billy Baldwin said


“You see that flash of light in the corner of your eye? That’s your career dissipation light. It just went into high gear.”

Pay attention to that light Mayor!!! They can’t throw your a** out to soon for me.


Next. Marx in the same bed with Gearhart!!???? NUFF SAID!!!!!!!!!!!!!!


Copelands and Marx you all ought to all be ashamed of yourselfs. You give the word fair play a bad name.


Ernie if you happen to be reading, give them all hell and don’t let up.


And last Karen V. where does a person even begin to say how great your reporting has been here on the Central Coast. As much as I am dismayed to learn of what kinds of inside political bulls**t has been going on, it is still good to know, so we can all put on our waders and start cleaning up this sespool on the Central Coast.


Paul Anthony

Good Job once again Karen. Good job, Lisa.


Crusader

You know it’s not like this flow of sewage just began. It’s just that “mainstream media” has long ignored it. May God richly bless CCN. I honestly hope that when we have the next election in two years that CCN and not the Trib is the recognized standard for news on the Central Coast.


Keep doing what you’re doing, CCN…


SanSimeonSam

Everyone seems to think Mayor Marx is going to regret being linked to the Copelands in this activity. That seems unlikely to me. As with Romero, Ms Marx will do quite nicely with the retirement package offered by the Copelands. Again, we get what we vote for and we simply do not wake up. Thanks again Karen for this good work. I sometimes wish you would quit though because its very frustrating to have this stuff come to the surface and nobody does anything about it. The corruption is so wide spread and the majority of the populace is so complacent or ignorant that nothing will be done. The cabal marches on more powerful than ever.


willie

When someone has this position of power over you and we are impotent (they know this!) to do anything about it, the next best thing is news to expose, mock, and laugh at them.

Their success as a politician is narrowed.

In fairness (I am open minded), she can go on a community radio talk show “in neutral territory” to explain herself or she should have realized radio talk show is ideal to simply keep in touch with the community like that of other noted public officials that has, she will not!

I love this “factual” transparency


Robert1

As a attorney she has some real legal problems if all is proven, and as mayor she has 0% credibility.

You can hardly see her scales with that granny costume!!


Paul Anthony

Thumbs down for the granny comment. Both ageist and sexist. Detracts from the issues.


zaphod

not to mention ; dehumanized reptile comparison.