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Kellar hasn't provided info to state

Posted: March 14, 2008 11:46 p.m.
Updated: May 16, 2008 5:03 a.m.
 
Santa Clarita Mayor Bob Kellar has still not provided the state with all the information required on his financial disclosure forms, even though Kellar's previously filed forms are being reviewed for possible violations of California law.

The California Fair Political Practices Commission requires candidates and elected officials to not only disclose their gross incomes, but also report the names of any single source of income that totals $10,000 or more.

Kellar had not reported his gross income in 2002, 2003 and 2004 on his Form 700, the Statement of Economic Interests. Because the state allows elected officials to file amendments to the forms at any time, Kellar filed amendments on Monday, disclosing his gross income from those three years. He has said he takes full responsibility for what he calls an inadvertent mistake. But Kellar, a Realtor and chief financial officer for real estate sales company Kellar-Davis Inc., still did not disclose the names of individual sources of income of $10,000 or more on his 2005 form.

Kellar was a selling agent when the Santa Clarita Community College District purchased land for College of the Canyons' Canyon Country campus and he recently confirmed with The Signal that he had earned more than $10,000 from that transaction in 2005.

Kellar was elected to the City Council in 2000 and is seeking re-election on April 8.

He did not return phone calls from The Signal on Thursday and Friday.

The FPPC has the ability to assess fines of up to $5,000 per violation, and real estate brokers and agents are not exempt from disclosing their commission as part of the applicable income information. The FPPC regulations define commission income as "gross payments of $500 or more received during the period covered by the statement as a broker, agent or salesperson, including ... real estate brokers or agents."

Roman Porter, spokesman for the FPPC, could not directly comment on Kellar's forms but said: "Let's say I was a broker and I was representing both sides of a transaction and I get $10,000 from the seller and $10,000 from the buyer and that's direct commission to me. I'd be required to disclose the commission on both sides of that transaction."

He said one of the key things the FPPC looks at is whether or not failure to disclose information is inadvertent or purposeful.

"Our greatest concern is that there is compliance with the Political Reform Act and that candidates and offices holders fully comply with the act and provide full disclosure for the public," he said. "It could go to the point where our executive director issues a demand that the act be complied with, and it could be to where the enforcement division investigates and we can assess a fine of up to 5,000 per violation per the Political Reform Act."

Kellar said at Tuesday's City Council meeting that he has been placed in an "impossible circumstance."
The requirement to disclose individual sources of income is unfair for elected officials who also work as real estate agents, he said.

Because most commissions exceed $10,000, he would need to disclose the names of nearly all his clients.
"In the real estate industry, that would be a breach of my fiduciary responsibility to the client, to put (the client's) name on some special list that would be (filed) at City Hall or in Sacramento or wherever," Kellar said Tuesday. "Folks, how long do you think I'd be in business? I'd have lost my company, lost my house years ago."

Though he said "there has not been any purposeful effort on my part to deny revelation or information having to do with the Form 700," Kellar later said his responsibility to his clients is the reason he did not disclose their names on the form.

"It is for that reason that I have not included those, because it is a breach of my fiduciary responsibility," he said.

Records obtained by The Signal, however, show that in his time on the council, Kellar has disclosed at least one client from which he received $10,000 or more.

On his 2001 form, Kellar listed LeHockey-Arklin as a source of income of at least $10,000.

Stanley Wieg, legislative advocate for the California Association of Realtors, said Friday that most Realtors who also serve as elected officials choose to "just disclose."

"Just because you disclose a source of income doesn't mean you have to disclose the details of the relationship with that source of income," Wieg said.

He said that because grant deeds are typically public documents, much of the buyer and seller information is already available to the public.

"If you go to the trouble of it, you could find out the clients for everything he has sold," he said.

Wieg said the association sponsored legislation several years ago to tackle the misconceptions about real estate agents' conflicts of interest, which discouraged them from running for elected office.

"There were some older opinions that people were using to suggest that just because you were in the real estate business, anything that you did that had anything to do with land use or policy in local government somehow disqualify you automatically," he said. "It was sort of a 'no Realtors need apply' sort of approach."

He said the FPPC has come a long way in correcting those misperceptions and has made it clear that unless the real estate agent has a deal-specific conflict of interest, that person is not disqualified from holding a public office.

"It is supposed to be a participatory democracy," Wieg said. "We want people to get involved in local government. We want people that know something about their community to be involved."

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