Pleasanton Mayor Jerry Thorne has acknowledged failing to formally inform state regulators about selling his Costco stock in 2016, an admission that comes as part of a proposed settlement agreement with the Fair Political Practices Commission up for final approval next week.
The agreement calls for a $100 fine for a low-level violation of the Political Reform Act, with FPPC officials also concluding investigators found no evidence of a conflict of interest resulting from the Costco stock sale as well as no evidence of intent to conceal on the mayor's part.
Thorne, who is expected to seek a fourth term as mayor this fall, said he feels vindicated by the outcome of the FPPC investigation -- which found only a paperwork infraction stemming from former City Councilman Matt Sullivan's complaint alleging Thorne abused his powers by participating in Johnson Drive Economic Development Zone (JDEDZ) meetings while owning Costco stock.
"I think the two most important findings were that the FPPC found no evidence of a conflict of interest resulting from this interest (Costco) and found no evidence of intent to conceal," Thorne told the Weekly. "I received a minor fine for failing to fill out an FPPC form when the stock was sold. I have admitted to not filling out the form and have already paid the fine."
"In the final analysis, I feel vindicated because the complaint was for a conflict of interest and an attempt to conceal it from the public and both of these allegations were found to have no foundation and were completely false," the mayor added.
Sullivan, an outspoken critic of Costco coming to Johnson Drive who is also spearheading a lawsuit against the city for approving the JDEDZ last December, said the mayor's violation is emblematic of a "culture of corruption" in Pleasanton city politics.
"While the quantity of Costco stock owned by Thorne was minor and the fine insignificant, the real issue is the culture of corruption that has engulfed Pleasanton city government over the past 10 years," said Sullivan, who served on the council from 2004 to 2012 before being termed out.
"Whether the money comes from developers, the Chamber of Commerce or directly from corporate entities like Costco doesn't matter. It is so prevalent that our representatives don't even try to hide it or pretend that it doesn't influence their decisions anymore," Sullivan added.
The FPPC is scheduled to consider approving the proposed settlement during its meeting next Thursday (Feb. 15) in Sacramento.
FPPC communications director Jay Wierenga said he could not comment on the specifics of Thorne's case because the settlement is pending.
Wierenga did speak generally about the type of agreement proposed, saying it was a "streamline settlement" that is part of a FPPC program created in 2015 to resolve lower-level, relatively techinical violations that didn't cause much harm, if any, to the public.
City Manager Nelson Fialho declined to comment on Thorne's settlement, deferring comment to the mayor while saying the city had no jurisdiction or involvement in the matter.
The original complaint, which Sullivan filed with the FPPC in October 2016, targeted the city's JDEDZ consideration process to that point in light of Thorne leading council meetings on the subject while owning some Costco stock shares.
The JDEDZ proposal laid out the framework for how redevelopment could occur in largely underutilized 40 acres along Johnson Drive and Commerce Circle, southeast of the I-580/I-680 interchange -- land city leaders hope will become Pleasanton's newest commercial center anchored by a Costco store and two hotels, plus other businesses.
Thorne had participated in public meetings on the JDEDZ proposal for nearly two years until July 2016, when he abruptly recused himself from the debate after saying he discovered his retirement managed stock fund included Costco share in its portfolio.
The FPPC then determined in September 2016 that Thorne could not participate in JDEDZ discussion while owning Costco stock -- the mayor owned 24 shares with a value exceeding $2,000.
Sullivan argued in his subsequent FPPC complaint that Thorne "clearly and knowingly violated the conflict of interest statutes of the State of California by consistently advocating for and using his mayoral powers on behalf of a proposal to build Costco in Pleasanton."
Thorne, who has continued to recuse himself from all JDEDZ hearings to avoid a perception of impropriety, sold his Costco shares in the latter part of 2016, but an FPPC investigator later determined the mayor failed disclose the stock and sale information in his 2016 annual statement of economic interests (commonly known as a "Form 700").
Thorne has amended all financial statements and has not ever received a penalty from the FPPC Enforcement Division for failing to file a Form 700 in a timely manner, for violating the annual gift limit or for failing to timely report a qualifying economic interest, according to the proposed settlement.
The FPPC's public meeting next Thursday is scheduled to begin at 10 a.m. in Sacramento, 1102 Q St., Suite 3800. Thorne's proposed settlement is listed among the commission's 13-item consent agenda, a collection of items deemed routine in nature and voted upon all at once unless pulled for individual consideration by a commissioner.
The commission meeting comes during a key week for Thorne and the city.
The mayor is scheduled to deliver his annual State of the City address next Tuesday during a luncheon hosted by the Pleasanton Chamber of Commerce at the DoubleTree by Hilton Hotel -- a venue located just yards away from the JDEDZ.
And the next day, city officials are scheduled to appear in court for a case management conference in Oakland for the lawsuit filed by Sullivan's resident coalition, Pleasanton Citizens for Responsible Growth, challenging the council's environmental clearances as part of the JDEDZ approval.
The council voted 4-0 to approve the JDEDZ in December, laying the administrative groundwork to allow Costco to pursue an application to build on a Johnson Drive parcel.
Thorne continued recusing himself from the council's JDEDZ, saying he would maintain that position despite no longer owning Costco stock and having advice from the city attorney and Fair Political Practices Commission that he could legally participate.
Thorne has served as mayor since first being elected in 2012. He won re-election comfortably in 2014 and 2016 and is expected to run for a fourth term this fall -- which, if elected, would be his final term in office under the city's term limits. Before becoming mayor, Thorne served seven years as a City Council member and before that 10 years on the Parks and Recreation Commission.