Councilman Doug Emerson in July 2011 accepted $4,650 for a trip to China – and apparently exceeded the state’s gift limit for elected officials – from a private solar company that requested he speak at a seminar to help recruit investors for California projects.
Emerson initially denied accepting anything classified as a gift under state law but later acknowledged that some of the reimbursement from CleanFocus Energy did qualify as such – which would subject him to a limit of $420 annually from a single source.
Still, Emerson continually has denied any violations of the Fair Political Practices Commission rules – which can result in fines of up to $5,000 – in interviews and an email response on the apparent violation. After initially stressing that the reimbursement did not qualify as a gift – which would exempt him from the limit but still require reporting on a Form 700 Statement of Economic Interest – he did acknowledge his wife’s portion of the payment did not qualify as a “travel” reimbursement under the law.
“After we talked, I realized that all of the reimbursements for Linda’s expenses are gifts,” Emerson wrote in an email responding to an explanation, from the Free Lance, of the FPPC law.
Emerson in the email (see his full email response to the left) also left open the potential that the reimbursement could affect the mayor’s race on the November ballot. As of now, Emerson is joined in declaring candidacy by Ignacio Velazquez, Keith Snow and Marty Richman, a former Free Lance columnist and editorial board member. Richman initially informed the newspaper that Emerson had filed a Form 700 listing the $4,650 trip.
Emerson wrote that he found nothing that would have precluded him from accepting the offer from CleanFocus.
“If you are aware of something to the (contrary) please let me know and I will refund (any) amounts that are illegal and withdraw from the Mayorial (sic) race,” he wrote.
Emerson and ClearSpot officials have stressed there are no prior, current or prospective business interests between the two solar companies. Richman said he asked the newspaper to examine Emerson’s statement of economic interest because he was concerned there may be a connection between ClearSpot and “whoever paid for” Emerson’s trip.
“It turns out, you told me there is a connection,” Richman said.
Emerson was referred to the CleanFocus firm by Claude Leglise, one of two partners in ClearSpot Energy, the company with which Hollister officials in January 2010 approved a 30-year, multimillion-dollar contract to power the wastewater treatment plant using solar. Emerson was the most outspoken council supporter of the city’s wastewater solar partnership.
Leglise from ClearSpot confirmed in an email that he was approached by CleanFocus Energy Vice President of Project Finance Matt Coleman about getting in contact with a Hollister official who could explain the local project and power purchase agreements with governments – as CleanFocus had a similar public-private partnership planned in California. Leglise referred Emerson to the CleanFocus executive in late May or early June 2011, the councilman said.
Emerson said he spoke at the Beijing seminar for about 25 minutes – translation made up about half of that time – and received reimbursement for he and his wife’s plane fare, lodging, visas, taxicab trips to and from the airport, and three days per diem for food and beverage, confirmed the councilman. Emerson underscored he also spent “considerable time” preparing before the seminar and then joined CleanFocus executives for 90 minutes of questions after it.
CleanFocus Energy, with offices in Sunnyvale and China, paid for those three days of his trip, while Emerson said he and his wife stayed another three days for which he funded lodging, meals and other related costs.
The total amount for the reimbursement was $4,650, according to the Form 700 Statement of Economic Interest filed by Emerson – as required for elected officials every year – in March 2012.
Explaining the law:
Although there are certain types of payments defined as “travel” by the FPPC that would exempt elected officials from the state’s gift limit of $420 by a single donor in any given year, Emerson’s case does not appear to fit those guidelines. Additionally, his wife’s portion of the trip would not qualify as travel income and, by itself, would far exceed the state’s gift limit.
As for his own portion of the reimbursement, there is a provision for “Exceptions” to the gift rule for types of travel payments not subject to limits or reporting requirements, and another for “Reportable Payments Not Subject” to limits.
Under “Exceptions,” it says an elected official could accept such travel reimbursement “so long as” the speech is for official agency business or the payment is made by a government entity. Emerson acknowledged other city officials were not involved, while other council members were unaware he had spoken overseas about the ClearSpot project. City Manager Clint Quilter said Emerson told him about the trip “probably a month or two” before it.
“Nobody ever said anything about it,” Councilman Robert Scattini said. “I knew nothing about it.”
Under the “Reportable Payments” section, it says travel is not subject to the gift limit if it is “reasonably necessary in connection with a bona fide business, trade, or profession” with which the official is associated. Emerson is not linked with the solar industry in any professional capacity, but did say he has historically maintained a “real interest” in solar technology.
In his email response, Emerson offered a lengthy explanation of the trip – including the acknowledgment his wife’s portion was a gift – but reiterated his contention he did not violate the FPPC rules while noting “city staff” also advised him he did not break the law.
The FPPC declined to comment on Emerson because it has a policy against doing so on specific matters. Its spokeswoman, Tara Stock, pointed to the FPPC fact sheet summarizing the rules. She said the FPPC urges public officials to get advice from the commission “prior to these types of trips since reporting requirements are based on the specific facts of each situation.”
Opponents react:
While the FPPC regulates such compensation to elected officials, Richman expressed concern that ClearSpot Energy received a no-bid, lucrative contract from the city and that Emerson was instrumental in pushing it through.
“I think it’s an unfortunate choice he made to accept a trip paid for by a friend from ClearSpot,” Richman said, calling it “a matter of common sense.”
Velazquez, another mayoral candidate, owns a solar business that tried to get involved in talks with Hollister to power the sewer plant prior to the approval with ClearSpot in 2010. Velazquez said he “was suspicious about the whole transaction” and that it could end up costing more than previous amounts.
“It never made sense the jobs weren’t given to locals,” he said.
Emerson said the ClearSpot connection had “nothing to do with” his trip.
“They (CleanFocus) asked me if I would go along and just talk about our project here,” Emerson said.
As for the reimbursement, he said there “was no financial benefit.”
“I got a trip out of it, got to do some sightseeing,” Emerson said.
CleanFocus had asked him to talk about Hollister’s partnership with ClearSpot Energy at the sewer plant. Its goal was to recruit investors through the EB-5 program allowing foreigners permanent visas if they invest $500,000 toward American businesses.
Emerson said he believes the company gained 12 to 14 investors through the effort and “indicated to me that a large part of their success was due to my speaking about a small community in California which is ideal for solar.”
He underscored in his email response that the trip was not just flying to Beijing and speaking.
“Prior to the trip, I spent considerable time with Matt trying to come up with a presentation that was accurate for the Hollister contract and beneficial to Clean Focus,” he wrote. “At the strategy meeting before the seminar, it was pretty clear that Clean Focus needed to get a minimum of 5 investors on board. There was a high degree of stress and anticipation.”
