Questions of Faith
For more than three years, John E. McInerney III has been battered by a constant barrage of charges regarding his ethical conduct.
The drubbing began in 1996, almost as soon as Mayor Willie Brown appointed McInerney to the Board of Appeals, a quasi-judicial body that makes final rulings on land-use matters appealed from the city Planning Commission. Because it is the court of last appeal for many zoning disputes, a seat on the appeals board is an incredibly powerful position.
Even before McInerney was sworn in, he was criticized on ethical grounds.
Critics asked if the Republican attorney should be allowed to take his seat because the law firm in which he was a partner, Orrick, Herrington & Sutcliffe, served as bond counsel to the city. During his campaign, Mayor Brown had said that he would not appoint any commissioner who did business with the city.
Brown appointed McInerney anyway, explaining away the potential for conflict of interest this way: McInerney was a real estate lawyer, and did no work in Orrick's municipal bond division, so no actual conflict existed.
Of course, McInerney worked in Orrick's real estate division, which should have raised even more serious conflict-of-interest questions with the mayor, given that real estate disputes are the raison d'etre for a Board of Appeals. But these potential conflicts were overlooked. For a while.
But by the summer of 1997, McInerney was entangled in three separate ethics controversies, some more substantive than others.
In one case, he was accused of attempting to influence the city's zoning administrator on behalf of a client who was trying to build live-work units on Harrison Street. The city charter prohibits a San Francisco official from advocating on behalf of a paying client before city government. There was a phone call to the zoning administrator, but both he and McInerney gave innocent explanations of the contact. An ethics complaint filed by a neighbor objecting to the proposed development was eventually dropped, and the city attorney and the district attorney declined to take legal action.
In the second dust-up, McInerney's critics took innocent behavior and tried mightily to transform it into something unethical, which obscured any coherent critique of the commissioner. McInerney and some other investors wanted to build a five-story apartment building in Polk Gulch; some neighbors complained about its height, and the matter ended up before the Board of Appeals. McInerney, therefore, faced himself as an apellant. He recused himself. This incident was conflated with other, more credible allegations, in the service of a "where there's smoke" argument.
In January 1998, McInerney became embroiled in another ethical controversy. This one drew the attention of a formidable foe, then-state Sen. Quentin Kopp.
Susan Schindler, the owner of the Brain Wash Cafe on Folsom Street, alleged that McInerney and his former law firm tried to intimidate her into dropping her opposition to a proposed 17-unit live-work development next to her business. (McInerney left Orrick, Herrington & Sutcliffe at the end of 1997 to take a job as a managing broker at TRI Coldwell Banker.) Schindler asked the Planning Commission to review the project because she was afraid its future residents would complain about noise coming from her cafe.
In response, the Orrick firm wrote a 58-page memo to the Planning Commission claiming Schindler was out of compliance with various city regulations. She was later visited and cited by a building inspector, who said her elevator, which had earlier passed muster, was slightly in violation of city guidelines. The city tax collector also began an audit of her payroll taxes. She made a complaint to the Ethics Commission. And her friend, Public Defender Jeff Brown, alerted the city attorney to the possibility of an ethics breach. Both complaints went nowhere.
Kopp stepped in and asked District Attorney Terence Hallinan to investigate; the state lawmaker also asked permission from the California attorney general to proceed with a private lawsuit against McInerney (a move allowed under state law when public officials refuse to take action against another public official accused of wrongdoing). The attorney general eventually declined to allow Kopp to move forward, citing a legal technicality, but without commenting on the merits of the charges against McInerney. Hallinan refused to investigate, saying that it was a matter for the city attorney, who also declined to open a probe.
By July of last year, all the law enforcement agencies that might have taken action had let McInerney off the hook on all the complaints against him.
He must have been relieved. He'd been muddied up pretty good by the nearly 2 1/2 years of attacks on his character. The local print press had reported on the ethics charges vigorously, and neighborhood activists had placed a target squarely on McInerney's forehead. When the last set of charges fizzled, John McInerney might have set about reclaiming his reputation.
This is what John McInerney did instead.
On Jan. 1, 1998, in the midst of the aforementioned ethics complaints, McInerney went out and acquired another huge potential conflict of interest.
McInerney affiliated himself with the law firm of Reuben & Alter in an "of counsel" capacity. "Of counsel" is a fancy term meaning McInerney is neither an associate, making a salary, nor a partner, who receives a percentage of profits, of Reuben & Alter. Rather, McInerney keeps his files at the Reuben & Alter offices and avails himself of secretarial staffers, who perform his billing and other administrative duties. He has his own clients, brought with him from the Orrick firm, and performs work for them alone. He does not advise Reuben & Alter on its cases, he says, although he does "share" at least one client with the firm. He compensates the firm for overhead costs by allowing it to take a cut from his billings to his clients.
There is nothing inherently improper about this relationship. But Reuben & Alter is a registered lobbyist at City Hall and regularly represents clients before the Board of Appeals. And R&A name partner James Reuben and John McInerney are, in the parlance of Southern states, "bubbas." They are also tightly woven into the city's political establishment.
For most of the 1980s, McInerney served as a board member of the Residential Builders Association, an organization headed up by Joe O'Donoghue, a politically powerful City Hall lobbyist who has a deep base of support in the Irish-American community. The RBA donates tens of thousands of dollars to state and local politicians each year.
James Reuben has done campaign finance legal work for Mayors Frank Jordan and Willie Brown. Reuben represents the San Francisco 49ers. He is also good friends with Jack Davis, Mayor Brown's campaign manager, a point he made clear to me, apropos of nothing, when I interviewed him for this column.
While McInerney was negotiating the terms of affiliating with Reuben & Alter in late 1997, the firm was lobbying him on behalf of two clients with cases before the Board of Appeals. McInerney voted for the interests of the Reuben & Alter clients in both cases.
Then, in July of last year, McInerney announced that he was "of counsel" to Reuben & Alter, and that he would be recusing himself from hearing or voting on the firm's cases before the appeals board, as a way of avoiding the appearance of conflict of interest.
But, gosh, McInerney had a strange way of addressing ethical concerns.
Public documents show that Reuben & Alter lobbied its "of counsel" affiliate on three building-permit votes. In each of those cases, the Board of Appeals was dealing with a client represented by both Reuben & Alter and McInerney -- RAM Development Inc., an RBA member and a prominent builder of live-work units in San Francisco. (McInerney says he draws up condominium covenants for RAM projects; Reuben & Alter does general real estate law and government relations work for the corporation.)
Some of these lobbying registration documents are quite specific. In one case, they show that a Reuben & Alter attorney directly lobbied McInerney on a matter to be heard by the Board of Appeals.
McInerney says he was not lobbied by Reuben & Alter on the RAM Development Inc. projects. He said in an interview that since he and Reuben & Alter share RAM as a client, Reuben simply let him know the case was coming to the Board of Appeals. "The conversation had nothing to do with the vote," McInerney said.
But the object of lobbying, after all, is to obtain a favorable ruling by government for your client. And the documents Reuben & Alter filed with the Ethics Commission are meant to report lobbying, not passing conversations. And those documents, therefore, raise real questions:
Why would Reuben & Alter lobby McInerney, if he could not influence the outcome of the matter?
Even if he abstained from the final vote on the issue, could he not influence his fellow commissioners?
Or are Reuben & Alter lobbyists so stupid that they 1) file lobbying reports when no lobbying has occurred, and 2) lobby public officials who can provide clients with no assistance whatsoever?
These three recusals seem, to me, more like moral fig leafs than ethics at work. And at least once, McInerney didn't recuse himself from a Reuben & Alter-related case, until challenged about conflict of interest.
In August 1998, a woman named Sue Cauthen went before the Board of Appeals trying to get a decision of the city's zoning administrator, Robert Passmore, overturned. Cauthen had complained that a restaurant in her neighborhood stayed open later than zoning laws allowed; Passmore ruled in favor of the restaurant, a client of Reuben & Alter, and Cauthen took her case to the Board of Appeals.
She and her attorney, Steve Williams, were late; the hearing was over when they got there. On arriving, they discovered that McInerney had sat in on the hearing and voted against Cauthen. Williams complained, noting that McInerney had a conflict of interest.
McInerney explained to Williams and his client that he could indeed vote on the matter because Cauthen was appealing Passmore's ruling, and the restaurant (the Reuben & Alter client) was not a party to the action. Williams calls this reasoning "weasel-y." He says McInerney was still voting on behalf of the financial interests of the Reuben & Alter client, who, in legal parlance, would be considered "a real party in interest."
Williams asked for a pro forma three-minute re-hearing of the case. McInerney recused himself at Williams' request. The board deadlocked and, as a result, the appeal by Cauthen failed.
Reuben & Alter, and the restaurateur the firm represented, prevailed.
When McInerney left Orrick, Herrington & Sutcliffe late in 1997, he did so to take an equally prestigious job -- managing partner at TRI Coldwell Banker, one of the biggest real estate firms in the country. But he still wanted to keep making money from his law clients. (According to the limited disclosure required by the city, he makes more than $10,000 a year from his law clients.)
It is very simple: McInerney wanted to make a career move to TRI Coldwell Banker and keep his hand in the law, where he makes good money. Reuben & Alter made this possible.
There would be nothing wrong with McInerney holding dual professional posts -- if he did not hold a third, governmental position that involves the public trust.
So far, McInerney has tried to insulate his duties for the public from his private, moneymaking efforts by recusing himself from hearings and votes that involve the law firm with which he is affiliated.
Those recusals impress me not at all.
Of the five commissioners on the Board of Appeals, McInerney is far and away the brightest and most dynamic. He is the only one who knows much about real estate investment and permit law. The other four members of the Board of Appeals are a family law attorney, an employment attorney, a pub owner, and a public relations consultant and college student. They are said to follow McInerney's lead on a regular basis. Is it really merely happenstance that Reuben & Alter clients are batting 1.000 at the Board of Appeals, even without McInerney's vote?
McInerney swears he is not the kind of man to work behind the scenes to get fellow commissioners to vote on behalf of the firm.
"I'm a fifth-generation San Franciscan," McInerney told me with indignation when I asked him if he lobbied his fellow commissioners on Reuben & Alter cases. "I am Jesuit educated. I do legal work for Jesuit institutions. I have very high moral values. I was the partner in one of the biggest law firms in the United States. You just don't behave that way."
McInerney has enunciated what I call the Establishment Defense: I am a member of the establishment, so you will naturally trust me when I say I am steadfast and true.
I am not trying to be cute or funny here. Neither am I calling Mr. McInerney a liar.
I'm making a more pedestrian point: McInerney and the man who appointed him, Mayor Brown, are asking the public to engage in an act of faith regarding McInerney and his apparent conflicts of interest.
Now, John McInerney could be worthy of faith. But faith, if a reliable staple of Jesuit-trained lawyers, ought not be required of taxpayers when they look upon their government.
We should not have to contort ourselves into a position of trust in our government officials. It's the job of public officials to earn that trust, not ask us to overlook suspicious appearances in order to reach it.
Just ask yourself: Why did McInerney have to link himself with Reuben & Alter? He knew they would appear before him regularly when he became "of counsel" to the firm. Hell, James Reuben was lobbying McInerney, as a public official, while talking to him about lending his name to the firm.
Is there a shortage of law firms in San Francisco that don't lobby the Board of Appeals on a regular basis? Of course not.
So when you ask the obvious questions, you wind up asking more.
Should we believe McInerney when he says he doesn't lobby his fellow commissioners on Reuben & Alter items he has recused himself from? Isn't it at least as reasonable to suspect that John McInerney lent Reuben & Alter his name so the firm could solicit clients with the argument that it had a man on the Board of Appeals? It would certainly be an effective way of attracting business, and money, to the firm. Wouldn't it?
No amount of special pleading by McInerney or his fellow commissioners will dissuade a reasonable mind from wondering about this situation. Unless you accept the honesty of John McInerney and James Reuben as a matter of faith, it is impossible to know exactly what has been going on here -- unless, of course, McInerney, Reuben, and their clients agree to let me tiptoe through their financial documents and legal contracts, which I don't think they will anytime soon.
So the questions just keep coming.
Of course, you could just ask yourself to trust John McInerney, and be done with it.
But you shouldn't ask that, because you shouldn't have to.
This isn't church, folks. It's City Hall, and honest government isn't something we ought to have to pray for.
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