More disclosure problems for Boulder City Council

Jefferson Dodge | Boulder Weekly

Additional questions have emerged around the financial disclosures filed by Boulder City Council members.

In addition to the examples previously reported by Boulder Weekly about city council members George Karakehian and Ken Wilson being less than accurate on their forms, BW has uncovered irregularities in other members’ paperwork.

The growing evidence that city officials have some serious problems disclosing information needed to avoid potential conflicts of interest, or at least the appearance of impropriety, only adds ammunition to claims by local critics who fear that some on council may be operating out of self interest or for the gain of their friends and business partners.

The latest round of questions involve filings by council members Macon Cowles, KC Becker and Suzy Ageton. Cowles, for example, failed to list on his 2011 disclosure form the capital gain from the sale of his house at 1680 Wilson Court, a property that made headlines in 2010 and 2011 after Cowles appealed the county assessor’s value of his house. The Camera reported that he later sold the house for $1.57 million, nearly twice as much as the assessor’s revised value.

Cowles told BW this week that not listing the capital gain from the sale was an oversight. In the instructions on the form, “capital gain” is specifically spelled out as one example of the types of sources of income that must be included.

In response to a request for an opinion on the matter, City Attorney Tom Carr said via city spokesperson Patrick Von Keyserling that since the form allows council members to omit their primary residence from the “Real Estate Interests” section, it is unclear whether they need to report capital gains from the sale of such properties.

Like Carr has done in previous situations where he has defended inaccurate information provided by council members, he seems to be saying that the form itself — or council’s inability to grasp its requirements — is at fault.

Von Keyserling says Cowles’ omission is one of the gray areas that will be clarified in the next couple of months as Carr, at the request of Mayor Matt Appelbaum, reviews ways to revamp the process council uses for members to disclose possible conflicts of interest.

Von Keyserling acknowledged that the city’s code of conduct, contained in the Boulder Revised Code, definitively requires capital gains to be reported.

“Because of that discrepancy, those would be the types of issues the city attorney’s office is looking at to standardize and make sure both the form and the current law are in line with each other,” he says.

Becker’s 2010 and 2011 forms illustrate another possible omission. Under the “Business Interests” section of her 2010 form, she lists herself as an investor in “1240 Cedar LLC,” one of the entities that county records show sold a property for $2.5 million on Sept. 3, 2010, six days before the date of Becker’s disclosure form. She does not list any revenues from that sale on her 2010 or 2011 forms, and even if she rolled any profits back into the LLC, the LLC is not included on her 2011 paperwork.

Possibilities include that Becker was still part of the LLC when she filled out her 2011 form and failed to disclose it, or had liquidated her interest in the LLC and failed to disclose that source of income on the form. Secretary of State records show that 1240 Cedar LLC was still an active entity at the time her 2011 form was filed, even though the property located at 1240 Cedar had been sold more than a year earlier.

Becker did not respond to requests for comment by phone or email during the three days prior to press time. She was not at Tuesday night’s council meeting, so she may be out of town.

Before the city issued a restraining order against him, local political gladfly Seth Brigham had raised other questions about Becker, including the appointment of one of her business partners, Scott Holton, to the Boulder Housing Partners board in March 2011. That appointment was made by then-Mayor Susan Osborne and did not involve a council vote. Osborne told BW that she was not aware of the relationship between the two at the time of the appointment, and that she doesn’t recall whether she consulted with Becker regarding the appointment. She did say, however, that Holton applied for the post, like any other prospective board member.

While apparent irregularities on Ageton’s forms are more easily explained, they further highlight the need for the city to rework the process it uses for council members to disclose possible conflicts and appearances of impropriety.

For example, on her 2010 and 2011 forms, Ageton doesn’t declare the home that she owns under “Real Estate Interests,” and while the form allows council members to omit such assets, other council members, such as Cowles, list such properties. When those assets are not placed under the real estate section, it is unclear whether the home address listed in the form is rented, owned — or their parents’ basement.

Ageton agrees more clarity is needed. “I’ve gone back and forth on [listing] that, and it seems to me this is a small, maybe insignificant, example of why I think the form is not well-designed,” she told BW. “To me, there ought to be consistency. I think that’s a place where we could clean up this form and just automatically have every council member list their residence.”

On her 2011 form, under “Sources of Income,” Ageton lists a “real estate sale,” but she lists no property owned on the previous year’s form. She does list an “estate distribution” on her 2010 form, and she explained to BW that she received partial ownership of an out-of-state property as part of an inheritance that year, and that property was subsequently sold. Ageton says she consulted with city staff on how to list that estate distribution, and followed their guidance. (Council members are not required to list dollar figures on their forms.)

But she points out that a flaw in the form is that it calls for including revenue from all properties sold — even when they are out-of-state and have no relevance to council duties.

“So again, this is a place where we need to be clear about what is the purpose of the financial disclosure form,” Ageton says. “That sale, I, in no way, could influence by an action as a Boulder City Council member. If the intent of the financial disclosure form is to allow people to see where there are financial business interests that I might be able to influence as a council member, this particular piece of my financial history is totally irrelevant.”

She suggested creating a closer connection between the code of conduct and the disclosure forms required to be filled out every year by sitting city council members and by candidates running for council that year.

“I think the community does deserve to know what financial interests, business properties or personal properties that we have that we could potentially, by a legislative action, influence,” Ageton says.

But when asked why she, unlike Wilson, failed to list prominent clients of her consulting business in the “other information” portion of the form, Ageton says that while such disclosures should be considered, “there is a line between providing relevant information that allows the community to make the assessment about whether or not you are acting appropriately, and opening up your entire life to people so that they can do or say whatever they feel like with regard to the clients, some of whom they may like, and some of whom they may not like.”

When asked about the allegations regarding Karakehian and Wilson, she says, “the two that you have highlighted, I know those to be good, honest people. I don’t have any reason to believe there was any intent to deceive. I think this form is not easy.”

Ageton suggested that an independent, third party, like a consultant, could be used to regularly review the disclosure forms privately, “and something could be cleared if it needed to be. … I’m not interested in playing a game of ‘gotcha.’ If someone is intent on hiding something, they can do it, probably. But that’s true with so many things in life.”

She cited ambiguous language in the city’s code of conduct that asks council members to disclose “close” friends who have a “substantial interest” in a transaction with the city.