Bureau asks council for clarification on order

Theresa Moreau

HUNTINGTON BEACH -- The chairman of the city’s Conference & Visitors

Bureau has asked the City Council for more specific directions on how to

proceed with the bureau’s publishing contract for its annual visitors

guide.

Last month, City Atty. Gail Hutton ordered the bureau to immediately

terminate its publishing contract with Coatings Resource Corp., citing a

state law that prohibits city officials from benefiting from city

business.

Coatings Resource bought the contract from Mayor Dave Garofalo’s

company, David P. Garofalo & Associates, in January 1998, according to

documents Garofalo provided to the city attorney’s office. Though the

contract was owned by Coatings Resource, Garofalo continued to act as

publisher of the guide and benefited from advertising revenue, the

documents show.

During a budget study session Monday, John Gilbert, chairman of the

bureau’s board of directors, read a prepared statement to the City

Council offering two options and asking the council to decide which

course it would like the bureau to take. Gilbert, who manages the

Waterfront Hilton Beach Resort, said he would then give the

recommendation to the bureau’s board at its next meeting, Sept. 6.

The options are:

* terminate the contract now and provide the bureau with legal counsel

from the city if the bureau is sued as a result and provide additional

funding from the city to cover any potential legal fees;

* let the contract run its course until it expires Dec. 31, when it

would go out for an open bid.

Gilbert said he favored the second alternative.

“I believe that the council selecting the second option would best

serve both the bureau and the city,” Gilbert read from his prepared

statement.”

Councilman Dave Sullivan said he doesn’t like either option, but one

in particular was quite distasteful.

“I have a real problem with the option of allowing the contract to

continue,” Sullivan said. “We have, in my view, an unethical and illegal

contract, and I find it offensive that the chairman of the CVB would

recommend continuing it for another three months. It should be terminated

right now.”

Garofalo is under investigation by the Orange County district

attorney’s office, the grand jury and the state’s Fair Political

Practices Commission for alleged conflicts of interest involving

advertisers in three publications his company has produced -- the Local

News, the bureau’s visitors guide and the Chamber of Commerce Business

Directory. The guide has snared as advertisers such heavy-hitters as the

Waterfront Hilton; Hearthside Homes, formerly Koll Real Estate Group; and

Commercial Investment Management Group, which is developing a Downtown

hotel, retail and restaurant project.

During his six years on the council, Garofalo voted at least 87 times

on issues involving his advertisers in either the visitors guide or the

Local News. And each time, he voted in their favor. Hutton has advised

Garofalo to abstain from voting when advertisers come before the council,

which excludes the mayor from voting on many -- if not all -- major

issues.