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Wednesday, Apr 21 1999
Questions of Faith
For more than three years, John E. McInerney III has been battered by a constant barrage of charges regarding his ethical conduct.

The drubbing began in 1996, almost as soon as Mayor Willie Brown appointed McInerney to the Board of Appeals, a quasi-judicial body that makes final rulings on land-use matters appealed from the city Planning Commission. Because it is the court of last appeal for many zoning disputes, a seat on the appeals board is an incredibly powerful position.

Even before McInerney was sworn in, he was criticized on ethical grounds.
Critics asked if the Republican attorney should be allowed to take his seat because the law firm in which he was a partner, Orrick, Herrington & Sutcliffe, served as bond counsel to the city. During his campaign, Mayor Brown had said that he would not appoint any commissioner who did business with the city.

Brown appointed McInerney anyway, explaining away the potential for conflict of interest this way: McInerney was a real estate lawyer, and did no work in Orrick's municipal bond division, so no actual conflict existed.

Of course, McInerney worked in Orrick's real estate division, which should have raised even more serious conflict-of-interest questions with the mayor, given that real estate disputes are the raison d'etre for a Board of Appeals. But these potential conflicts were overlooked. For a while.

But by the summer of 1997, McInerney was entangled in three separate ethics controversies, some more substantive than others.

In one case, he was accused of attempting to influence the city's zoning administrator on behalf of a client who was trying to build live-work units on Harrison Street. The city charter prohibits a San Francisco official from advocating on behalf of a paying client before city government. There was a phone call to the zoning administrator, but both he and McInerney gave innocent explanations of the contact. An ethics complaint filed by a neighbor objecting to the proposed development was eventually dropped, and the city attorney and the district attorney declined to take legal action.

In the second dust-up, McInerney's critics took innocent behavior and tried mightily to transform it into something unethical, which obscured any coherent critique of the commissioner. McInerney and some other investors wanted to build a five-story apartment building in Polk Gulch; some neighbors complained about its height, and the matter ended up before the Board of Appeals. McInerney, therefore, faced himself as an apellant. He recused himself. This incident was conflated with other, more credible allegations, in the service of a "where there's smoke" argument.

In January 1998, McInerney became embroiled in another ethical controversy. This one drew the attention of a formidable foe, then-state Sen. Quentin Kopp.

Susan Schindler, the owner of the Brain Wash Cafe on Folsom Street, alleged that McInerney and his former law firm tried to intimidate her into dropping her opposition to a proposed 17-unit live-work development next to her business. (McInerney left Orrick, Herrington & Sutcliffe at the end of 1997 to take a job as a managing broker at TRI Coldwell Banker.) Schindler asked the Planning Commission to review the project because she was afraid its future residents would complain about noise coming from her cafe.

In response, the Orrick firm wrote a 58-page memo to the Planning Commission claiming Schindler was out of compliance with various city regulations. She was later visited and cited by a building inspector, who said her elevator, which had earlier passed muster, was slightly in violation of city guidelines. The city tax collector also began an audit of her payroll taxes. She made a complaint to the Ethics Commission. And her friend, Public Defender Jeff Brown, alerted the city attorney to the possibility of an ethics breach. Both complaints went nowhere.

Kopp stepped in and asked District Attorney Terence Hallinan to investigate; the state lawmaker also asked permission from the California attorney general to proceed with a private lawsuit against McInerney (a move allowed under state law when public officials refuse to take action against another public official accused of wrongdoing). The attorney general eventually declined to allow Kopp to move forward, citing a legal technicality, but without commenting on the merits of the charges against McInerney. Hallinan refused to investigate, saying that it was a matter for the city attorney, who also declined to open a probe.

By July of last year, all the law enforcement agencies that might have taken action had let McInerney off the hook on all the complaints against him.

He must have been relieved. He'd been muddied up pretty good by the nearly 2 1/2 years of attacks on his character. The local print press had reported on the ethics charges vigorously, and neighborhood activists had placed a target squarely on McInerney's forehead. When the last set of charges fizzled, John McInerney might have set about reclaiming his reputation.

This is what John McInerney did instead.

On Jan. 1, 1998, in the midst of the aforementioned ethics complaints, McInerney went out and acquired another huge potential conflict of interest.

McInerney affiliated himself with the law firm of Reuben & Alter in an "of counsel" capacity. "Of counsel" is a fancy term meaning McInerney is neither an associate, making a salary, nor a partner, who receives a percentage of profits, of Reuben & Alter. Rather, McInerney keeps his files at the Reuben & Alter offices and avails himself of secretarial staffers, who perform his billing and other administrative duties. He has his own clients, brought with him from the Orrick firm, and performs work for them alone. He does not advise Reuben & Alter on its cases, he says, although he does "share" at least one client with the firm. He compensates the firm for overhead costs by allowing it to take a cut from his billings to his clients.

There is nothing inherently improper about this relationship. But Reuben & Alter is a registered lobbyist at City Hall and regularly represents clients before the Board of Appeals. And R&A name partner James Reuben and John McInerney are, in the parlance of Southern states, "bubbas." They are also tightly woven into the city's political establishment.

About The Author

George Cothran


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