Phil Rath, a prominent member of San Diego's well-compensated local influence peddling corps and chairman of the board of Civic San Diego, has agreed to pay a $5000 fine to settle conflict-of-interest charges brought against him by the state's Fair Political Practices Commission.
The story begins in the fall of 2013 as a typical lobbying deal between Rath – once an aide to county supervisor Bill Horn – and Affirmed Housing Group, a so-called affordable housing developer seeking favor with the supervisors in getting public money, per a stipulated agreement with Rath, set for approval by the commission at its November 15 meeting.
"Rath holds a 49% ownership interest in Rath Miller, LLC," says the document.
"On November 8, 2013, Rath Miller entered into an agreement with developer Affirmed Housing Group to provide public affairs services in connection with Affirmed’s efforts to obtain funding from the County of San Diego for an affordable housing project located in San Marcos.
"In compensation for the firm’s services, Rath Miller received its first payment from Affirmed for $22,000 on December 18, 2014. The second payment in the amount of $100,000 was initially due on March 31, 2015, but the deadline was extended in response to a request from the client and the payment was ultimately made on August 8, 2015."
The intrigue started in July 2015, when GOP mayor Kevin Faulconer appointed Rath – once an aide to Faulconer's mentor, ex-San Diego mayor Jerry Sanders – to the board of Civic San Diego, the city's redevelopment arm.
Civic San Diego is responsible for mapping the destination of millions of dollars in public housing subsidies, and Affirmed soon showed up on the city's doorstep for a piece of the pie.
"On January 5, 2016, in response to a Request for Proposals issued by Civic San Diego, Affirmed submitted one of three bids to develop a 143,800-square foot mixed-use project at the northwest corner of Hilltop Drive and Euclid Avenue in the Chollas View neighborhood of Encanto Neighborhoods Community Planning Area in the City of San Diego," per the commission document.
"On June 8, 2016, the Real Estate and Budget/Finance Joint Committee of the Civic San Diego Board voted to approve the staff recommendation to enter into an Exclusive Negotiation Agreement with Affirmed to develop the Hilltop & Euclid project. Rath was a member of the Committee and participated in this matter."
Though state conflict of interest and transparency laws required that Rath "disclose Affirmed as a source of income to Rath Miller on both his assuming office statement and his annual statement for 2015," the veteran lobbyist failed to reveal the cash he had derived through his dealings with the firm, according to the ethics findings.
"Rath did report his ownership of Rath Miller and four reportable sources of income of $10,000 or more received through the firm, but he failed to report his portion of income received from Affirmed during the reporting periods."
On June 22, 2016, Affirmed's exclusive negotiating deal went to the full Civic San Diego Board, which voted 6-1 to recommend it to the city council for final approval, the account says.
"Rath participated in this matter and voted in favor of the motion," the filing says. "Rath stated, '[I]t’s clear that this is the winner of this contest... and who I think we should proceed with.'"
In short, says the stipulation, "Rath had a conflict of interest due to this source of income when he participated in the discussion of and then voted for a governmental decision regarding Affirmed."
In levying a $5000 fine, half of the maximum $10,000 penalty prescribed by law, commission staff recommends that $2000 be apportioned to Rath's reporting violations, and $3000 because he "participated in and ultimately voted twice on a matter that directly involved a source of income to Rath."
A prior fine regarding the same matter levied against the influence peddler in August by San Diego's ethics commission in August totaled $11,000.
"These violations are extremely egregious because they undermine public confidence in the integrity of the City’s decision-making process,” ethics commission chair Deborah Cochran was quoted as saying in an August 9 news release regarding the city penalty.
"Chair Cochran noted that the violations in this matter were exacerbated by the Respondent’s failure to disclose the income he received from Affirmed Housing on the Statement of Economic Interests he filed with the City Clerk. The combination of disclosure and conflict of interest violations 'necessitated the imposition of a stiff penalty' according to Chair Cochran."
Before setting up their lobbying shop, Rath and current business partner, Kimberly Hale Miller, along with ex-Jerry Sanders media handler Rachel Laing, previously worked for Public Policy Strategies Inc., where they staged a January 2013 fundraiser to retire the campaign debt of subsequently ousted San Diego mayor Bob Filner.
Rath Miller has also been an avid fundraiser on behalf of the county supervisorial aspirations of termed-out San Diego Councilman David Alvarez,coming up with a total of $11,900 at two June 2017 events. Defeated councilwoman Myrtle Cole was the beneficiary of $5205 from a fundraiser held by the firm in April of last year.