Hollister Vice Mayor Karson Klauer is currently under investigation by a state commission for potential conflicts of interest related to city council votes on cannabis businesses.
Resident Gary Cameron filed a sworn complaint in August 2017 with the California Fair Political Practices Commission, which oversees the enforcement of the state’s Political Reform Act. Cameron has been an outspoken critic of the city’s quest to regulate medical cannabis.
“Karson Klauer as the City of Hollister vice mayor and councilperson may have used his office to financially enrich his family, friends and co-workers,” the complaint alleges. The documents cites Klauer’s “failure to recuse himself from participating in the drafting of the City of Hollister Marijuana Ordinance and subsequent revisions to the ordinance while having a real or perceived personal conflict of interest.”
The city council passed a medical cannabis ordinance back in December 2016 by a 3-2 vote, with Vice Mayor Klauer, Councilman Ray Friend and Councilwoman Mickie Luna in favor, and Mayor Ignacio Velazquez and then-Councilman Roy Sims against. After months of deliberations, council members capped the dispensary number to two facilities, dialed down the 600-foot setback from sensitive uses to 150 feet, removed mixed-use zoning and changed the working age in cannabis businesses from 21 to 18. State law still requires that all cannabis facilities have at least a 600-foot setback from schools.
“When I got involved with writing the ordinace, from that point I haven’t done anything with anybody who was planning on selling to someone for a cannabis business,” Klauer said by phone Tuesday. “I haven’t represented anyone hoping to put a cannabis business on a property. I tried to avoid all that.”
Klauer was notified by the Fair Political Practices Commission of the complaint in August and on Dec. 28 was asked to supply supplemental information to the existing case.
“I can understand why some of the people have concern in that complaint, but in speaking with the city attorney before the meeting, as long as me or my immediate family members didn’t have a possible benefit from the sale or decision, I didn’t have a conflict of interest,” Klauer said. “I didn’t represent the buyer, seller or applicant in the past and I don’t see that happening in the future.”
In the past, Klauer recused himself from several votes on cannabis businesses, including two properties on Industrial Drive. His recusal for 817 Industrial Drive last summer stemmed from the fact that a family member owned the building next door.
The vice mayor also recused himself from a December vote on cannabis business Euphoric Life Inc. when they were approved to operate at 807 Industrial Drive, previously the home of Green Tripe owned by husband and wife Mary and Peter Voss. The property sold for $1.24 million.
“As far as 807 Industrial Drive, I had a conflict of interest with a family member who owned and sold the property,” Klauer said. “I recused myself with 817 Industrial Drive because my family member owned the building next door. That’s why I sat those out.”
According to an FPPC spokesman, the complaint also alleges a conflict of interest with the fact that Klauer, a Realtor at Nino Real Estate, voted to approve cannabis business Traditional Roots to operate at 1091 San Felipe Road when Klauer’s coworker Jason Noble handled the listing and $2 million sale.
Klauer started working part time at Nino Real Estate in 2011 and went full time in the summer of 2013.
“I do mostly residential, probably 95 percent if not even higher,” Klauer said. “I only have a couple commercial sales. It’s all on the sales side, I don’t do any property management.”
The investigation is ongoing and being conducted by the Fair Political Practices Commission Enforcement Division comprised of attorneys, investigators, auditors and other staff.
There is no standard time frame for how long investigations of this nature take.
“One can not put an ‘end date’ as to when an investigation should be finished,” said Jay Wierenga, communications director for the Fair Political Practices Commission. “Each depends on the specifics of the case, the facts, the cooperation of those involved, a variety of factors. I can say that, generally speaking, based on statistics from the past few years, about two-thirds of all cases are completed within 180 days and almost 90 percent are completed within a year.”
Fair Political Practices Commission Regulation 18700 states: “A public official at any level of state or local government has a prohibited conflict of interest and may not make, participate in making, or in any way use or attempt to use his or her official position to influence a governmental decision when he or she knows or has reason to know he or she has a disqualifying financial interest. A public official has a disqualifying financial interest if the decision will have a reasonably foreseeable material financial effect, distinguishable from the effect on the the public generally, directly on the official, or his or her immediate family, or on any financial interest.”
According to the Fair Political Practices Commission website, all sworn complaints such as the one Cameron submitted are taken under official review to determine if the complaint has merit. This includes figuring out if the complaint contains enough evidence of a potential violation and whether the allegation is related to the Political Reform Act or covered under other laws. The initial review usually takes a few days or weeks, depending on the circumstances.
If a complaint has merit and allegations fall under the Political Reform Act, the parties involved will be notified and an investigation will begin to determine if there is a violation.Each violation of the Political Reform Act is subject to an administrative fine of up to $5,000. Incidents that constitute a violation of the act include financial conflicts of interest, laundered campaign contributions, gift limit violations, campaign mass mailing at public expense, improper campaign reporting, improper receipt of campaign funds and more.
Some incidents that don’t fall under Fair Political Practices Commission jurisdiction include false or misleading campaign materials, election fraud, open meeting law issues, local ordinances and residency requirements for running for or holding office.
Klauer will not be seeking reelection this year.
“I’m not running for reelection,” he said. “I put it on my Facebook page, it goes back to about a year and a half ago that I figured that out. I’m actually going to be moving across town. My wife and I sold our home last year and it closed in July. We’re renting for the time being so I can maintain my residence until my term is up.”
While Klauer won’t be running in 2018, he was unsure if he would run for public office again at some point in the future.
“I don’t know. I wouldn’t say never, it all depends,” he said. “It’s rewarding being able to get some things done, but there’s also a lot of public pressure. It’s not all positive all the time. It’s definitely not something I plan on running for this year or next year, but you never know.”