The former chief deputy of the L.A. County assessor's office failed to disclose a $255,000 loan from lobbyist Harvey Englander, the L.A. Weekly has learned.
Gary Townsend, a veteran political operative who worked in the assessor's office for 22 years, received the loan in 2010 to aid in his purchase of a condominium at a golf resort in La Quinta. Asked about it Thursday, Townsend said he would update his economic disclosure forms to include the loan.
Both men worked on the 2010 campaign of Assessor John Noguez, who is now under investigation for alleged bribery and campaign money laundering. Townsend was a senior adviser to the campaign, while Englander was the campaign strategist.
The loan appears to violate an L.A. County ordinance that bars lobbyists
from "placing any county official under personal obligation to the
In an interview, Englander said that a lawyer had reviewed the loan, and found that it was above board.
"It was a straight business transaction among friends," Englander said. "Even the insinuation of anything improper is a stretch."
Townsend served as chief deputy for two decades, under three assessors: Kenneth P. Hahn, Rick Auerbach and John Noguez. When he retired in November, he was making $189,540 a year, just slightly less than Noguez's salary of $193,383. Englander has been involved with the office just as long, running political campaigns for Hahn and Auerbach.
In February 2010, Townsend bought the condo at the PGA West country club, where Englander also owns a vacation home. Townsend's condo sits alongside a golf course designed by Arnold Palmer. It cost $319,000.
Townsend said that he could not get a bank loan for anything less than 10 to 12 percent interest, thanks to a pending lawsuit involving the property's homeowners' association. Englander, a friend of 40 years, offered to lend Townsend the money at an interest rate of 5 percent. (Townsend later clarified that no bank ever quoted him an interest rate, and he was only guessing that he would have had to pay 10 to 12 percent.)
Englander said the loan was a good investment, because the interest rate was higher than what would he have received by leaving the money in his savings account. Townsend said he made monthly payments to Englander, and paid off the balance after a year, having obtained another loan.
"If I did something incorrect, I'll do what it takes to correct it," Townsend said.
Don Garcia, the chief of the county's conflict of interest and lobbyist section, said the loan could violate the county's ordinance.
"It depends on the scenario," Garcia said. "That situation has never arisen."
The county's ordinance was modeled on the state's lobbyist restrictions, which explicitly bar state-registered lobbyists from making loans to state employees.
The condo purchase came just as Noguez was gearing up his campaign to succeed Auerbach. Englander ran the campaign, which raised and spent more than $1 million to defeat an opponent who had raised just $40,000. After Noguez won, his campaign owed $137,000 to various political vendors. The largest creditor was Englander's firm, which was owed $56,000.
The campaign held fundraisers to retire the debt. A former appraiser, Scott Schenter, claims that he began reducing property tax values in late 2010, in hopes that beneficiaries would help pay down the campaign debt, according to a source familiar with his account. The source said that Townsend was involved in exerting severe pressure to raise campaign funds, which Townsend denies.
Schenter's activity -- unauthorized by his supervisors -- was discovered in January 2011, and he resigned in lieu of being fired. The Schenter case was later turned over to the district attorney, which expanded its probe to examine allegations of bribery involving Noguez and tax agent Ramin Salari. On Wednesday, D.A. investigators served search warrants
at the homes of Noguez and Salari, at the assessor's office, and at several other locations.
In the six-month period following Noguez's victory, the campaign raised an additional $95,000, of which $39,500 went to pay off the debt to Englander's firm. The balance -- almost $17,000 -- was left unpaid.
Three months after his retirement, Townsend went to work for Englander's lobbying firm. Townsend is barred from lobbying at the county for one year following his departure from government service. Englander said that Townsend has been scrupulous about refraining from doing so.