Thursday, June 19, 2008

Mearan's Conflict of Interest

Robert Forrey addressing City Council

In his actions as a member of the Portsmouth City Council and as chairman of the City Building Committee (CBC), City Councilman Michael Mearan appears to have violated Sect. 160 of the Portsmouth City Charter, “Oath of Office,” and Section 161 of the Charter, “Financial Interests in Contracts, etc.,” which states, “No officer or employee of the City shall have a financial interest, direct or indirect, in any contract with the City or be financially interested, directly or indirectly in the sale to the City of any land, materials, supplies, or services except on behalf of the City as an officer or employee [emphasis added].” In addition to violating Sect. 161 of the City Charter regarding conflict of interest, Mearan also appears to have violated Sect. 102.03 (A) (1) of Ohio’s Ethics Law, which states, “No present or former public official or employee shall, during public employment or service or for twelve months thereafter, represent a client or act in a representative capacity for any person on any matter in which the public official or employee personally participated as a public official or employee through decision, approval disapproval, recommendation, the rendering of advice, investigation, or other substantial exercise of administrative discretion.”

The “Donation”

On the agenda of the March 14, 2005, meeting of the Portsmouth City Council was the following item: “Ord. authorizing the Mayor of the City of Portsmouth, Ohio to accept a deed to the real estate generally known as 807 Washington Street, Portsmouth, Ohio.” At the same meeting, according to City Council minutes: “Mike Mearan – 812-6th Street, an attorney representing Herbert Singer who is offering the former Adelphia building to the City. Mr. Mearan said . . . that the intent of Dr. Singer is to give this property to the City for the City to use. He supported the idea of using the building for a Police Department but acknowledged that would be a decision for Council. Mr. Mearan said that in order for Dr. Singer to take advantage of certain IRS regulations the City could not sell or lease the building because that would set a value on the property and would restrict the amount Mr. Singer can claim as a donation to the City. Mr. Mearan stated that with the understanding that the City would accept the property and use it for City purposes, with a restriction of ten years after which if the City wants to get rid of the building or do whatever they want with the building they could do so.” In a letter to Mayor Kalb, the same day, March 14, Mr. Mearan wrote. “I am hopeful that Council will approve the ordinance to accept the deed to the Adelphia building. As we have previously stated, for Dr. Singer to receive a favorable tax ruling the property must [underlining in original] be used by the City for city related purposes. This restriction would be applicable for a period of no less than ten (10) years.”

807 Washington St., aka "Adelphia building"

At that same March 14, 2005, meeting, the city accepted Dr. Singer’s offer and formalized the transfer of the property to the city in ordinance Number 20-2005. That ordinance contains the provision that “said property to be used for city-related purposes for a minimum period of 10 years.” (A copy of the ordinance is in the City Building Committee’s “Final Report,” which can be found on Councilman Mollette’s website under “CBC-Marting.”) In addition to the tax advantages he would derive if the city used the property for city purposes for a period of ten years, Dr. Singer derived another financial gain from the transfer of the property to the city. Dr. Singer had been delinquent in paying his city property taxes, which amounted to almost $18,000. (See Ord. 11-2006.) In the arrangement that Mr. Mearan worked out with the city, Dr. Singer did not have to pay the city the nearly $18,000 he owed in back taxes. The city signed a Warranty Deed to the property dated Aug 23, 2005. (“Final Report.”) It should be emphasized that Dr. Singer’s “donation” of the 807 Washington St. property had financial strings attached, strings that would enable Dr. Singer, in Mr. Mearan’s words, “to take advantage of certain IRS regulations,” regulations that would qualify Dr. Singer for a tax break of an unspecified amount.

Mearan Appointed to Council

At the June 12, 2006, Council meeting, to fill a vacancy, Mearan was appointed to City Council and took the oath of office: “I solemnly swear that I will obey the Constitution and laws of the United States and of the State of Ohio, that I will in all respects observe the provisions of the Charter and ordinances of the City of Portsmouth and faithfully discharge the duties of the office of [City Council].” In his maiden speech as councilman at that June 12, 2006, meeting, according to council minutes, He [Mearan] stated one of his goals to be trying to determine what is best with regard to relocating the municipal building in a way that won’t cost the citizens any money.” In view of the contingent and provisional nature of the agreement between Dr. Singer and the city of Portsmouth regarding the 807 Washington St. property, and given. Mearan’s role as Dr. Singer’s attorney in creating that agreement, Mearan, as a member of city council, should have recused himself from any discussion or vote related to the relocation of the Municipal Building. He should have done so to avoid a conflict of interest. The “public purposes” condition of Dr. Singer’s “donation” had still not been met by the city when Mearan was appointed to City Council, so he appears to have been in violation of Section 102.03 (A) (1) of Ohio’s Ethics Law, which prohibits a public official from representing a client while rendering decisions, giving approval or disapproval, making recommendations, rendering advice, or exercising “other substantial exercise of administrative discretion.”

City Building Committee

Left to right: Mearan (Chair), Robinson, Johnson, Kalb, Ockerman

At the July 10, 2006, City Council meeting, according to Council minutes, City Council President Howard Baughman told Council that “he has been talking with Mr. Mearan and has made the decision to appoint a committee to study the City’s assets for a building, study the information that has already been acquired, talk to new people with new ideas and to make a few decisions and proposals to Council. He expressed his hope that this be done in a timely manner.” What the minutes of the meeting do not show, but what a tape of the meeting on reveals, is that Mr. Baughman said, “Mr. Mearan has come up with some new ideas and is very excited about it.” Mearan was apparently eager to serve on the City Building Committee. In any case, Baughman not only appointed Mearan to what became known as the City Building Committee, he appointed Mearan as chair of that committee. By accepting an appointment to chair the City Building Committee, Mearan compounded his conflict of interest regarding Dr. Singer and the 807 Washington St. property. Mearan’s presence on the City Council and especially his chairmanship of the City Building Committee put him in a position to help Dr. Singer get his tax break.

“Abstaining” on the “Donation”

At the August 14, 2006 meeting of the City Building Committee, Mearan said, “I personally have no interest whatsoever in the Adelphia building. I have no client that has any interest. I represented Dr. Singer, who owned the building, and donated it to the city and I would even abstain from voting so there would be no appearance of impropriety.” But on Dec. 11, 2006, the City Building Committee issued its “Final Report,” which recommended the city use 807 Washington St. for a "City Hall complex," incuding a new police station. The vote to send the recommendations on to City Council was 4 in the affirmative (Mearan, Johnson, Ockerman and Robinson) and 1 (Kalb) in the negative. So Mearan did not abstain on this important vote. At this same August 14 meeting, incidentally, Mayor Kalb said, “There is this question of whether the city does own the Adelphia building. The city does own the Adelphia building. There is no stipulation that we have to be in it for ten years.” But five months earlier, as I have pointed out, on March 14, 2005, the City Council had passed Ordinance 2005-20, which stipulated “the Mayor of the City of Portsmouth, Ohio to accept a deed to the real estate generally known as 807 Washington Street, Portsmouth, Ohio, said property to be used for city-related purposes for a minimum period of 10 years” (emphasis added). And on Dec. 11, 2006, when the City Building Committee submitted its “Final Report,” Ordinance 2005-20 was included, with the provision that “said property to be used for city-related purposes for a minimum of 10 years.”

That March 14, 2005, vote was not the only important one in which Mearan did not abstain from voting on matters related to Dr. Singer’s “donation.” According to official minutes, on June 9, 2008, the City Council gave a first reading to “An ordinance to submit to the electors of the City of Portsmouth, Ohio at the next General Election to be held the 4th day of November 2008, the question of whether to construct a new facility to be known as the Justice Center at the Washington Street Site (former Adelphia Building) to house the Police Department, Municipal Courts, Clerk of Courts, Probation Department and Solicitor’s Office . . .” The vote of the Council on the ordinance (which also included the Marting building) was 4 in the affirmative and 2 in the negative, with Mr. Mearan voting in the affirmative. In spite of the documented provisional quid pro quo nature of the property transfer from Dr. Singer to the city, Mr. Mearan served on the City Building Committee where he could help Dr. Singer receive his tax break.

Toxic Black Mold

The property Mr. Singer “donated” to the city was reportedly infected with toxic black mold (S. chartarum), which rendered the building less than worthless, as Mearan should have known. “Depending on the length of exposure and volume of spores inhaled or ingested,” an entry in Wikipedia states, “symptoms [of toxic black mold] can manifest as chronic fatigue or headaches, fever, irritation to the eyes, mucous membranes of the mouth, nose and throat, sneezing, rashes, and chronic coughing. In severe cases of exposure or cases exacerbated by allergic reaction, symptoms can be extreme including nausea, vomiting, diarrhea and bleeding in the lungs, and nose.” Dr. Singer’s building had toxic black mold when the city took title from him, as Portsmouth Police Chief Charles Horner told Mearan at a City Building Committee on Nov. 20, 2006. So Dr. Singer did not so much donate as he foisted the building off on the city, with Mr. Mearan’s assistance. As a member of the City Building Committee had said at its Nov. 20, 2006, meeting, if the Washington St. building has black mold, “that building’s no good anymore” and “has to go.”

The rent Adelphia Cable and its predecessors paid to Dr. Singer over the period of the 20-year lease (which lasted only 19) amounted to just under $1,400,000. I have been told by people who worked in the old Adelphia building that it had deteriorated during the period of the lease, and while Adelphia would have liked to remain at 807 Washington St., paying high rent on a deteriorating building under a new lease made no business sense. Singer had wrung what profit he could from Adelphia Cable, and when no one else showed any interest in buying the property, (and what businessman in his right mind would?) he unloaded it on the taxpayers of Portsmouth in the deal Mearan helped negotiate, or perpetrate. “Don’t look a gift horse in the mouth” does not apply to Dr. Singer’s gift, because the horse he offered the city was dead and infected with black mold and never should have been accepted. Mearan had the chutzpah to publicly suggest that a plaque or something be put on the new Justice Center at the Washington St. property to commemorate D. Singer's philanthropy. Dr. Singer's philanthropy is of the kind shown by the Marting Foundation, the kind that the poor people of Portsmouth can not afford any more of.

The so-called Adelphia building was an environmental and financial liability that its deadbeat absentee landlord foisted off on the city with the assistance of his attorney Michael Mearan. In the nineteen-years Adelphia Cable and it predecessors occupied Dr. Singer’s building, he reportedly never once was in Portsmouth. He came only afterwards. Who was representing Dr. Singer’s interests in Portsmouth all that time? Mearan needs to document when he began serving as Singer’s attorney in Portsmouth and when he stopped serving in that capacity. But exactly when Mearan formally stopped being Dr. Singer’s attorney is not the crucial point. The crucial point, from the viewpoint of the law, is that Mearan as councilman and as chairman of the City Building Committee put himself in a position to continue to represent Singer’s interests and push for using the 807 Washington St. property for public purposes so that Dr. Singer could get his tax break. Acting in “a representative capacity,” Mearan was guilty of a conflict of interest that calls into question the legality of the whole “Adelphia” deal and the ordinance that the city is trying to put on next November’s ballot. The Marting scam was declared null and void and so should the whole “Adelphia” scam. Following up on the City Building Committee member who said the black mold-infested “Adelphia” building “has to go,” I would add, “so does Mearan.”

Today it was reported in the New York Times that Steve Shaffer has been indicted by a Kentucky grand jury for his role in stealing Indian Head Rock. “These individuals have been playing fast and loose with the law, and it’s caught up with them finally,” Reginald Meeks, a Kentucky legislator, told the Times. “Clearly, there’s a different set of values in Kentucky than apparently exist in Portsmouth, Ohio,” he said. Mr. Meeks, you don’t know the half of it. Mr. Meeks, meet Mr. Mearan.