Editorials

Ever since Richard Nixon’s hired thugs broke into the Democratic National Committee’s headquarters in Washington’s Watergate office complex, it’s been This-gate and That-gate for almost every instance of suspected political misconduct, of which there have been more than a few since 1972—the latest is “Benghazi-gate. It was only a matter of time before Berkeley acquired its own X–gate.

In the last couple of weeks our very own –gate soubriquet has appeared in the comment section of various of the Bay Area News Group’s multiple outlets as well as the online local Berkeleyside site.

What’s it being called? Cap-gate, of course.

What is Cap-gate? Well, that depends on who you ask, and when you ask them. (“What did he know, and when did he know it?")

It seems that Berkeley Councilmember Laurie Capitelli scored some number of thousands of dollars (we used to call them “Gs") from Police Chief Michael Meehan’s purchase of a home with a loan of about a half-million dollars from the city of Berkeley which had been approved by, among others, Councilmember Laurie Capitelli.

Isn’t that what we used to call a kickback? Again, it depends on who you ask. 

In brief: 

Long, long ago, way back in 2012 if you can even remember that year, the Planet brought you a hot little story by Zelda Bronstein, longtime political activist, Planning Commissioner and mayoral candidate turned journalist, who knows where a lot of bodies are buried in Berkeley. 

Councilmember/Realtor Capitelli and the Police Chief’s $500,000 House Loan from the City of Berkeley

She noticed that Capitelli was listed as the buyer’s agent on the sale, and that as Councilmember he’d voted to approve the loan. Despite this shocking revelation, the sky did not fall, and Capitelli was re-elected. 

Fast forward to 2015: 

In late September, ace reporter Thomas Peele, whose work appears in the multiple Bay Area News Group outlets, did some of his trademark prize-winning data mining, and wrote this story, complete with chart: 

 

Bay Area government leaders reap sweetheart housing deals at taxpayers expense

In the body of the story, Peele called out a few of the biggest beneficiaries of generous housing allowances scored by public officials. He didn’t mention Chief Meehan by name, but Meehan’s $500,000 loan from Berkeley at 3% interest was number 6 in the chart. 

Another eagle-eye, former Planet reporter Fred Dodsworth, saw Peele’s story in the CoCo Times, remembered Bronstein’s 2012 piece and reprised the whole thing for the Planet’s op-ed section: 

Public Comment: Bay Area Government Leaders Reap Sweetheart Housing Deals at Taxpayers' Expense--Even in Berkeley!

Then Peele picked up the thread again, this time with Capitelli center stage: 

Berkeley council member profited from police chief's public home loan

Here’s the lead: 

“In a move that ethicists call fraught with conflicts and cronyism, a City Council member who voted to give Berkeley police Chief Michael Meehan a $500,000 housing loan from public funds later worked as his real estate agent and took a commission on the chief's purchase of a home, records show.” 

The story seemed finally to have grown legs—and Tom Peele even found some ethicists to tell you how wrong Capitelli’s behavior was. 

Then there was a sidebar from yet another former Planet reporter, Richard Brenneman, on his frequently spicy blog, with another old Capitelli scandal: 

Berkeley politics: Corrupt business as usual  

And, better late than never, there came this version on Berkeleyside.com: 

Berkeley councilman Laurie Capitelli profited from $500,000 housing loan given to police chief, paper says

But it wasn’t over yet. Next, on B-side, Capitelli explained himself one more time (we’re now up to Oct. 5): 

Capitelli says he didn’t get commission from house sale for Meehan, but will donate fee he was paid

“ ‘I reiterate that I received no compensation whatsoever from Red Oak from the sale itself,’ Capitelli said ... ‘I have had no financial interest in the company for several years. I did not, as reported, split any commission on the sale. I did receive a $5,925 unsolicited payment for dealing with a variety of questions and issues forwarded to me by the agent, which arose during their search for a new home.’ “

Oh, well then, it was just a measly $6K, chump change in today’s market. No problemo, right? 

The commentariat went wild after that. 

Here’s the neatest explanation of all the numbers being tossed around, from a pseudonymous commenter: 

• $1,185,000 times .05 = $59,250 (5% total commission paid on the house’s selling price)
• $59,250 divided by 2 = $29,625 (half of commission to buyer's agent)
• $29,625 times .20 = $5,925 (20% of the buyer’s agent’s commission paid to Capitelli)

Tidy, plausible, isn’t it? If the agents agreed to a slightly-lower-than-6% commission at 5%, which is common, it fits perfectly. 

It might be just a random number chosen by Meehan’s agent as a fee for “dealing with a variety of questions…” but Occam’s Razor suggests that it was a 20% kickback. 

Peele’s follow-up story dutifully reported Capitelli’s backpedaling (somewhat tongue-in-cheekily) but he and the Bay Area News Group stood by his story as first reported: 

Berkeley councilman to donate real estate fee to charity after conflict of interest was raised.

Why should we care, some readers asked, if Capitelli donates the cookies to charity after he’s been caught with his hand in the jar? 

Well, it’s dangerous to have a councilmember with such a shaky grip on ethics. 

Who else might he be taking money from? And what influence might people who pay him have over his Council votes? 

And what’s this about? Capitelli’s now-former real estate firm, Red Oak Realty,was hiding behind his broker’s license on the sales document, even though he says he was no longer doing whatever the law wants the requisite licensed broker to be doing? 

The payoff number is peculiar. The amount of money Capitelli took on this sale, whoever it was that paid him for whatever he did, is too much just for answering a few questions. At a very generous hypothetical $500 hourly rate, more than most attorneys charge, this would still represent at least 12 hours of work. 

On the other hand, $6K is too little to sell your soul for. Doctor Faustus got a much better deal for his. 

Surely Capitelli is not six thousand dollars this side of the poorhouse. His judgment is even more faulty than his ethical compass. 

I’ve heard it said that “real estate ethics” is right up there with “military intelligence” as a perfect example of an oxymoron, but I’ve known plenty of honest and generous real estate people. When my sister and I sold my mother’s house we were given good advice on various problems by the three real estate people we interviewed, even though we eventually sold it privately before it was even listed, in today’s super-charged market. We practically had to strong-arm one agent who spent a lot of unpaid time with us to accept a nice dinner in a restaurant as a thank-you gesture. 

I hate to say We Told You So, but a search in the Planet archives on Capitelli’s name produces other hints of future ethical lapses in the last decade or so. 

Real Estate Committee Pays for Mailers and Ads for Berkeley Council Candidates Moore and Capitelli

Hahn Tops Incumbent in Funds, but Developers Favor Capitelli

And then there’s my favorite, from way back in 2004: 

Down at the Alligator’s Ball

It describes Capitelli’s fundraising party for heavy hitters from the building industry, which has contributed a lot more than a measly $6,000 to his campaigns in the intervening eleven years. 

Now, once again, it might be time for the seeds the developers planted with Laurie Capitelli to bear fruit. He and his cronies in the City Council’s Immoral Majority are poised to give away a new installment of sugar plums right before the holiday recess in December, because expediter Mark Rhoades announced at the Zoning Adjustment Board that he needed a done deal by the first of the year., 

Per the script finalized on June 25, ignoring citizen protests, the Council will probably be letting developers of 2211 Harold Way off the hook, allowing them a deep discount on the significant community benefits we were promised if we voted in Measure R 1.0’s five tall buildings. The shameless giveaway of millions of dollars in SCB’s on the Rhoades-promoted building proposed for the historic site of the Shattuck Hotel embarrassed even the Zoning Adjustment Board majority members employed in the building industry who voted for the project. They were clearly uncomfortable with the token payment which they were forced to accept under the deal promoted at Council by Capitelli and his ally Mayor Tom Bates. 

Will Berkeleyans rise up and reject Capitelli as Bates’s anointed successor next year? Will Cap-gate turn into Casti-gate? Well, considering that our lotus-eating voters quickly forgot that the Mayor himself stole and destroyed copies of the Daily Cal after the paper endorsed his opponent, I wouldn’t bet on their remembering Cap-gate a year from now at election time. 

Why should we worry about small stuff like this when the lotuses are falling from the trees in our Gourmet Ghetto? Berkeley, after all, is The Best of All Possible Worlds, isn’t it?