CALIFORNIA CITY — California City will pay for the defense of three councilmembers named in lawsuits filed by two cannabis groups who alleged bribery as one of the reasons for being denied delivery-only permits back in June.
The council voted 3-0 during a special closed session meeting Monday, Oct. 19, with Councilman Ron Smith abstaining and Councilman William Smith absent due to a medical concern. Both Smiths and Mayor Pro Tem Don Parris, who voted during closed session, are the subject of the lawsuits that also include the city itself, City Manager Anna Linn and local businessman Rick Jones.
Grandma’s Stash, LLC and M.A.C.C. Consulting are both suing the city and councilmembers following a 3-2 vote in June denying an appeal to renew delivery-only permits for cannabis products. Both lawsuits accuse the three councilmembers of bribery and financial interest, lumping in Jones, who co-owns Greenstone/Cal City Supply, one of the few operational cannabis stores and delivery services in Cal City.
The complaints filed with Kern County Superior Court also base the bribery allegations on a Fair Political Practices Commission complain filed
The topic of defense came up after R. Smith abstained from voting on a zone change item for a planned cannabis cultivation facility at the Oct. 13 meeting. Smith stated he did not want to vote on any zoning change if it meant he could be sued for his action, with the risk the city would not defend his decision.
“It’s a scary thing for our city that an unfounded allegation can be made for per se, bribery that does not have one shred of evidence being made against three of our councilmembers,” R. Smith said during open comment prior to the closed session on Oct. 13.
He added the matter “has thrown our city government for a loop” that could potentially set precedent for how future councils operate.
Initially, City Attorney Baron Bettenhausen said Parris and Smith were required to draw straws to determine which one would remain in closed session as a matter of eliminating conflict of interest.
Councilman Nick Lessenevitch said conflict of interest didn’t apply, especially if the councilmember left out of discussion would not be privy to the discussion.
“We received a complaint and now we are beginning to address what is going to occur as we go into this,” Lessenevicth said, adding there was a presumption of guilt.
Bettenhausen challenged the assumption, stating a conflict of interest exists with councilmembers under both California’s Political Reform Act and its government code.
The PRA calls for councilmembers to recuse themselves from any discussion on issues involving financial interest or potential financial impact, true or not.
Conflicts aside, Bettenhausen noted complaints filed with the court don’t always have substance.
“I’m not making any presumptions and I want to make it clear that allegations made in a complaint do not mean it’s true,” Bettenhausen said. “I don’t think it’s true.”
Bettenhausen added that the question of whether the city will defend councilmembers was still too early to answer, as none of them had been served yet. A recommended recusal simply deals with the topic of whether the city will pay for individual members’ defense.
He added it was more for the councilmembers’ protection because it could represent a violation under the Political Reform Act.
The exception to Monday’s meeting was the lack of a quorum should Smith and Parris recuse themselves. A ‘rule of necessity’ allows a councilmember with a possible conflict to participate in a decision at the exclusion of other parties involved.
“The city has been served — improperly I might add,” Bettenhausen said. “I do think this is a political issue.”
Bettenhausen added even the councilmembers have not been served yet.
During the Oct. 19 meeting, Bettenhausen had also confirmed the city municipal code indemnifies councilmembers from being sued on actions they take, with exception of concrete evidence related to fraud or bribery.
Lessenevitch noted the conversation during the Oct. 19 meeting eliminated the benefit of ever voting as actions could be held against councilmembers without the city defending them.
“I would not normally hold a closed session item at this point, I would wait,” Bettenhausen explained. He added the city was able to obtain a 30-day continuance on the Grandma’s Stash case as the city was improperly served by the court.
Bettenhausen also said his office has been looking at the FPPC complaint filed, in part to check on its status. He didn’t disclose anything else, citing it as an item for closed session discussion related to the litigation.
Bettenhausen stressed he too may have a potential conflict of interest; the city attorney serves the city in potential or existing litigation, not individual councilmembers.
When individual councilmembers are named in lawsuits, additional steps are required, such as a conflict waiver needs to be signed or obtaining a separate attorney for the named officials.
Lessenevitch asked how Bettenhausen could advise the council as a whole without presenting discovery, especially after a conversation with the FPPC.
“You’re describing a situation, where as a councilmember I feel extremely vulnerable that these decisions are being made in a vacuum that does not reflect the council,” Lessenevitch said. “You’re asking us to take faith at some point in the future something will happen and you are acting for the benefit of five members.”
Bettenhausen reiterated he didn’t have a problem discussing with the council as a whole, as the city council called for the closed session item. He also repeated it was his ethical responsibility to walk through all the potential conflicts associated with the lawsuits.
“As an attorney, I cannot represent two separate parties without the appropriate safeguards,” Bettenhausen said. “I also have to advise the city and the individual councilmembers of when they have conflicts.”
Smith, prior to recusing himself, noted that the issue has drawn more scrutiny after being broadcast on a larger scale. He called the complaints unfounded and responsible for defaming three councilmembers.
“This has caused great damage to my ability to minister as a clergyman in this community,” Smith said.
Both lawsuits and the FPPC complaint drag Smith’s role as pastor of Victory Baptist Church into the mix; Smith has contented Victory Baptist’s financial practices are rigorous and go through multiple checks, while he never handles money personally.
Parris said neither he or Smith have need to recuse themselves. When Bettenhausen again explained the proper process and his inability to defend both parties without proper protections and the possibility of interfering with options like a settlement, Parris interjected.
“We have been slandered, we have been defamed, we’ve been lied about over and over, it’s gone public, yet you’re talking about a settlement,” Parris said.
Bettenhausen clarified he wasn’t considering a settlement, only using the term as an example of why participation in closed session wasn’t advisable.
“I’ll be clear: I don’t think this is accidental this lawsuit was filed days before an election by a party who is against councilmembers who decided against the person who filed it,” Bettenhausen said. “I think it’s intentional, it’s political but nonetheless it has happened and as the attorney, I have to follow the legal process I see.”
Bettenhausen also said his advice would be the individual councilmembers should retain independent counsel — paid for by the city if possible — regardless of whether the city will defend them.
Smith said he was concerned with the council’s integrity.
“I’m sure there are people listening that realize that by making false accusations, it will cripple our city government if [accusations are] made against three particular councilmembers,” Smith said. “I think it’s pretty scary that if someone has something against the city they can go [say] ‘I’ll just throw ridiculous charges against three councilmembers and they cannot conduct [city business].”
Smith added his reason for addressing the issue of the city defending individual councilmembers was to ensure the current and future councils can make decisions without coercion or threat of legal action.