Supervisor's Georgia Junket

Paul, Stanislaus official accepted jet trips from Diablo Grande builder

Michael G. Mooney and Ken Carlson, Modesto Bee, California, 14 September 2003

Stanislaus County Supervisor Pat Paul spent a week last year at a luxury hotel in Georgia owned by a developer with extensive county business dealings and charged the bill to another county employee's credit card. She also received gifts from the developer, Donald Panoz, builder of the Diablo Grande golf resort in the foothills west of Patterson. The gifts included a $200 facial and massage from the hotel spa during late March 2002.

Documents show all of Paul's hotel and meal costs, $1,280.93, were charged to Deputy Chief Executive Officer Richard Jantz's county credit card. Later, that amount was reduced by $196.14 because Paul said her day at the spa was a gift from Panoz.

Paul recently said the trip was justified.

"I was on county business," she said. "I'll travel and do anything I can to gain knowledge that might better the county. I feel good about it. I can sleep at night."

But her stay at the Château Élan Hotel in Braselton, Ga., and her acceptance of the spa gift, which she failed to disclose as required by state law, have created the appearance of a conflict of interest, said Larry Haugh, county auditor-controller.

Board of Supervisors Chairman Ray Simon agreed.

"She's saying it (the spa) was a courtesy," Simon said, "but that courtesy is still illegal (if it's not reported). Yes, you have the appearance of a conflict. You're dealing with a guy who has control of projects going before us."

Haugh said an outside auditor -- hired to review about $230,000 in county credit card charges by Wilson -- also is looking at Jantz's charges as part of an overall review of the chief executive office credit card accounts.

Paul and Jantz said they traveled to Braselton to discuss development of motor-sport-recreation facilities with Panoz, an auto-racing buff who operates the Sebring race track in Florida.

Simon said Panoz expressed interest in building an auto-racing center in Stanislaus County if the county would front the money for land acquisition and basic infrastructure costs. Panoz, he said, then would lease the facility from the county under a long-term agreement.

"That's what (former county CEO Reagan Wilson) told me he (Panoz) wanted," Simon said. "I told him there was no way the county would do that."

Wilson did not return telephone calls seeking comment.

Paul insists that the trip was county business and not a taxpayer-financed vacation. She also said she would remain objective in reviewing Panoz projects.

"I just figured I'm not for sale," Paul said. "A $200 spa gift is really nothing. Certainly, I should have reported it, (but) I don't see it as a conflict."

In recent months, the appearance of conflicts of interest has dogged the county's chief executive office. Wilson quit July 8 -- a month after The Bee questioned a county contract he gave to R. Lee Torrens, a friend and business partner.

Wilson's county credit card account was canceled Monday, Haugh said, after The Bee published a story detailing some of the ex-CEO's charges, including a weekend stay at a New York City luxury hotel.

CONFUSION OVER BILL

Documents show that Paul and Jantz checked into the Château Élan on March 29, 2002, and that Jantz checked out April 1. Paul did not check out until April 5. Yet, her room and meal charges continued to be charged to Jantz's credit card.

Neither Jantz nor Paul could explain why that occurred.

But Paul said Friday she will repay the county for charges she incurred during one of the days at the hotel.

"I cannot account for my time on April 4," Paul said. "I told the county counsel I would reimburse the county for my charges on that day."

Simon said it was unusual for a supervisor to put travel charges on another county employee's credit card. He said he also couldn't understand why Paul's hotel expenses were not sorted out immediately after she returned from the trip.

"It appears to me there was an attempt to hide these charges," Simon said. "I'm not saying it was deliberate, that's too strong a word, (and), I may be wrong, but that's my guess."

Paul denied Simon's allegation.

"Ray's welcome to his opinion, but that's not true," Paul said. "I was not trying to hide anything from the public. I gave up my spring break (Paul was a teacher at the time) to go down there."

Paul and Jantz said they plan to amend their state-required statements of economic interest, also known as Form 700, and notify the California Fair Political Practices Commission this week.

"I clearly made a mistake by not reporting the spa day," Paul said. "I think I should turn it over to them (the state commission)."

Also at issue are free plane rides Paul and Jantz accepted on Panoz's private jet. Both flew from Georgia to Florida -- a trip of 544 miles by car -- to tour Panoz's Sebring race track.

Paul and Jantz stayed overnight at Panoz's luxury hotel there, apparently free of charge. Jantz said the costs associated with his Sebring visit were supposed to have been listed on his Château Élan bill but were not.

"I asked that the room be put on my (county) credit card," he said. "It (the Sebring hotel bill) was supposed to be sent to the (Château Élan) desk but was not. I was not billed for that night, inadvertently."

Paul said a room charge on her itemized bill from the Château Élan, showing she stayed there the same night she was at Sebring, actually was the cost of her room the night she stayed at Panoz's hotel in Florida.

"I don't understand that," she said.

Jantz and Paul maintain that they were at Sebring on April 1 and did not return to the Georgia hotel until April 2. Jantz said he left later that day because he had to attend a conference in San Diego.

Although Jantz already had a ticket on a commercial flight to San Diego -- paid for with his county credit card -- he accepted passage on Panoz's private jet. The developer, Jantz said, was heading to Orange County.

"I made the decision to fly with him," Jantz said, "because it gave me another three or four hours to continue my (motor-sport development) discussion with him."

From Orange County, Jantz said he used his personal credit card to pay for a rental car, which he used to drive to the San Diego conference.

"My logic was, since I had another means of transportation that had been paid for (his commercial airline ticket), this (flying on the Panoz's plane) was not a transfer of value."

Paul said she encouraged Jantz to fly to the West Coast with Panoz -- even though he expressed reservations about doing so.

"He (Jantz) was really reluctant," Paul said. "I told him it was a great opportunity to discuss things with (Panoz) one on one."

Simon said the Château Élan trip -- especially Paul's participation -- casts the appearance of conflict over the entire Board of Supervisors.

"This puts us all in a bad position," Simon said. "I can see spending two or three days there. But seven days? The spa? Everything charged to Richard's (Jantz) credit card, I don't understand it."

GIFTS MUST BE DISCLOSED

County Counsel Mick Krausnick said the credit Paul received for the spa is a gift under California law and must be publicly disclosed.

Elected officials are required to report gifts valued at $50 or more on their statements of economic interest. Paul's statements show she didn't report her day at the spa.

Paul couldn't explain her omission or why she didn't move to correct it until The Bee raised questions some 18 months after her trip.

Krausnick said the free rides on the Panoz jet also might be considered gifts under state law.

He noted that because Jantz and Paul were touring Panoz's racing facilities under the auspices of county business, their passage aboard the private jet might be allowable under state law.

Ultimately, Krausnick said, it will be up to the Fair Political Practices Commission to make that determination.

Simon, however, contends that Paul's portion of the trip should not be considered county business.

"This is going to the auditor (for review)," he said. "I think she owes (reimbursement) for the whole trip. There was no official county purpose."

Paul, who represents east Modesto, Oakdale, Riverbank and Waterford on the county's east side, said she saw nothing wrong with traveling to Georgia to discuss race-track development on the county's West Side. That area is represented by Supervisor Paul Caruso.

"I go to lots of meetings that don't have anything to do with my district specifically," she said. "I travel to gain knowledge to make good, informed decisions. If something is going to have an economic benefit, it probably will benefit the entire county, not just one area."

Paul's hotel expenses at Château Élan did not raise widespread concerns until last week. They were unearthed by county officials during a Bee review of credit card charges incurred by members of the Board of Supervisors.

Jantz said he assumed all the charges had been reconciled long ago.

Krausnick called The Bee after Paul's charges were discovered.

"I can't explain why I didn't use my credit card," Paul said.

Jantz and Paul were unable to say exactly why all of Paul's hotel expenses had been charged to Jantz's county credit card -- although both said it likely was a matter of convenience.

Jantz added that it's not unus-ual for two county employees traveling on the same trip to put all the charges on one credit card.

AIRFARE CHARGE

At the time of the Georgia trip, Paul had her own county credit card and documents show she used it to pay her $1,585.50 round-trip airfare (which included a $30 agent fee) between San Francisco and Atlanta.

Though Paul and Jantz arrived at the Atlanta airport on separate flights, Paul said they shared a shuttle for the ride to Braselton.

Documents from early May 2002 show Paul reimbursed $1,438 to the county for her airfare after receiving a $147.50 credit -- for canceling the leg of the trip between Modesto and San Francisco.

"The price was ridiculous," Paul said. "I thought it was way too much (for taxpayers) to pay."

The supervisor also paid back $13 to the county, documents show, to cover meal overages while traveling in Georgia and Florida.

Paul, when first contacted by The Bee a week ago, said she had not seen her hotel bill from the trip or even discussed it with anyone.

"I asked Richard (Jantz), 'How come I never saw this bill?'" Paul said. "He said, 'because it was on my credit card.'"

But Christine Ferraro Tallman, the board's clerk, said a staff member in her office talked to Paul about the Château Élan charges soon after the supervisor returned from Georgia.

By Friday, after Paul returned from an out-of-state vacation, reviewed her personal calendar and talked to an aide, the supervisor said she remembered being questioned about the spa charge.

"When I came back to the county, I said to make sure there is no charge for a spa on my hotel bill," Paul said. "I told them that was a gift and was not supposed to be charged to the county."

Paul said she knew the spa was a gift because she had received a note from Panoz's secretary shortly after arriving at Château Élan saying she could use the spa free of charge.

"I didn't realize it was going to show up on the bill," she said.

Paul said she and Jantz were charged $119 a night for their rooms -- the hotel's conference rate. During the trip to Sebring, Paul said she and Jantz received overnight accommodations there but never were billed.

Jantz said he was asked to make the trip to Georgia by Wilson, who had visited Château Élan himself in early March 2002.

"We were there to look at a number of facilities," Jantz said. "(Automobile) racing is a very attractive economic development activity."

Modesto attorney Russ Newman, who once served as a legal adviser and registered agent to a now-defunct private company owned and operated -- in part -- by Wilson and Torrens, denied playing a role in the meeting between Jantz and Paul and Panoz.

Simon, however, said he had been told it was Newman who arranged Paul's trip.

Newman also is a legal adviser and representative for Panoz and Diablo Grande. He said Panoz likely was trying to be a good host when he picked up Paul's spa charges.

"Don is a gracious guy," Newman said. "He would be accommodating if you went back there to visit or anyone else from our community. He's proud of that place and treats his guests very nicely."

The Bee was unable to reach Panoz for comment.

Simon, noting that Paul is running for re-election, said he was not trying to cause political trouble for his longtime board colleague.

Paul, the first woman to serve on the board, has represented District 1 since 1988. Riverbank Mayor Bill O'Brien is seeking to unseat her in the March election.

"I'm not trying to kill her (politically)," Simon said. "She's made a horrendous mistake. She needs to deal with it. I just want everybody's records to be clean."