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Wooden mallet and diary on a white backgroundNEWSPAPER’S RESPONSES HAVE BEEN INAPPROPRIATE

This past June, the Monterey County civil grand jury published an investigative report regarding the management and governance of the city of Carmel. A recent editorial in the Carmel Pine Cone by publisher Paul Miller exudes strong disrespect for the grand jury. This is the second editorial penned by Mr. Miller making a personal affront to individuals participating in grand jury service. His June 26, 2015, writing described the grand jury’s work as stupid and worthy of contempt. Last week, he stated that “the grand jury set out to try to make things worse, instead of helping … Farewell, grand jury, and same thing to the horse you rode in on.” It’s apparent that Mr. Miller was hoping for an indictment of the former city administrators. He also took issue with the finding that the Pine Cone influenced the city’s governance. When the report didn’t meet his expectations, he chose to belittle the jury members instead of focusing on his opinion.

In America, we don’t serve the government, the government serves us. There are a number of ways that we have to ensure that this arrangement continues. I’m certain that Mr. Miller is familiar with freedom of the press. There are other ways, too—separation of powers, the right to vote, freedom of information, and yes, civil grand juries. Civil grand juries are mandated by the California Penal Code. The code grants powers to the grand jury to examine local governments, commissions and agencies, special districts, elected officials, etc. The grand jury does not have the authority to enforce its recommendations, but it does report its findings to the citizens. The citizens can then act as they see fit.

I fully respect Mr. Miller’s views regarding the city matters addressed in the grand jury report and his disagreement. I welcome his alternative suggestions to improve the city’s governance. His personal attacks on the jury members, however, are an affront to the democratic process. The 2014/15 civil grand jury was comprised of 19 educated and committed members. It included Ph.Ds, attorneys, CEOs, business school professors, and independent business owners. The members worked diligently to develop information that informs the public and effects sound choice. The grand jury did not choose to investigate Carmel. Carmel residents and the City Council made that decision. The work of the panel was performed honestly, competently, completely within the law, and with integrity. Whether Mr. Miller and the public agree with the findings or not, the panel members were honored to serve and continue to hold their heads high.

Panetta is a faculty member in the School of Business at California State University Monterey Bay and an adjunct faculty member at the Monterey Institute of International Studies. He was a member of the grand jury committee that examined Carmel City Hall during the period leading up to the departure of City Administrator Jason Stilwell. Among other things, it concluded that his departure was sparked in large part by highly slanted reporting by the Pine Cone and the City Council’s failure to back him up.


IMG_0825 2Both the Herald and the Pine Cone ran articles this week on Carmel’s response to the county grand jury’s report of its investigation of specific City Hall actions and procedures. The response was a letter drafted by the city administrator, approved without change by the City Council, and signed and sent to the grand jury. I have read the letter and the memorandum from the administrator to the council recommending approval and have a number of issues with the entire process.

Some of the key issues identified by the grand jury include problems with the issuance and oversight of contracts and the well-known outrage that evolved from hiring and termination actions taken during the prior city administrator’s tenure.

In essence, the letter describes some procedural and hiring changes that the council evidently concludes completely addresses those concerns and issues identified by the grand jury. In part, they include (1) requiring council approval of any contract in excess of $24,999; (2) training staff and producing a manual on purchasing procedures and the issuance of purchase orders, plus the creation of a ledger that tracks contracts and purchase orders; and (3) a proposal to hire additional staff to presumably bolster the ability of the city to manage contracts and avoid future employment-related gaffes.

I believe the proposed changes are probably long overdue, but they don’t go nearly far enough. In other words, in spite of how the city characterizes them, they do not totally address the underlying causes that led to the investigation in the first place.

My biggest concern is that the role of the city attorney is not specifically included nor necessarily implied. For example, the letter states that a contract review form will be circulated and must be signed off by “numerous city officials” before the contract can be presumably approved and executed. Those “city officials” are not specifically designated, which makes no sense if the city is attempting to convince both the jury and its citizens that it has truly committed to doing the process as effectively and efficiently as possible.

It should not be a surprise to anyone that I say the city attorney is the person who should play the most important and key role in determining whether a proposed contract provides for the most efficient and cost-savings result, while fully protecting the interests of the city and its residents. This role is crucial and in every venue of which I have worked, both governmental and private, contracts are not executed without the full involvement and recommendations of in-house or outside counsel. Contract managers are a good thing, but when it comes to legalities, liabilities and commitments, only a legally trained person’s recommendations should be sought.

The Carmel city attorney, Don Freeman, is not mentioned as having a role in any of the procedural and hiring changes proposed by the city in its response. And, even more telling, the letter states that outside counsel had to be retained (at what cost?) to assist the city attorney in reviewing suspicious contracts that helped trigger the investigation. That means that the city’s own in-house attorney, on retainer for $7,500/month, either never insisted or was never tasked to review those contracts in the first place. What was he being paid for? Reviewing legal documents would seem to be a natural part of his responsibility, and certainly one that he must have recognized, but evidently did not ask or push for. If he was actually directed not to be involved, that would have been an unbelievable, negligent act, putting public money at great risk.

The city attorney also should have insisted on the selection and management of all outside counsel. A seasoned attorney, presumably, would have relevant knowledge as to the appropriate counsel for the need, to direct counsel as to strategy, to review costs and statements for appropriateness, and to even participate in some legal actions such as preparing or reviewing of briefs, motions, etc. It does not appear that the city attorney was tasked to do any of those roles, all of which could have saved the city both money and grief.

The next biggest concern I have doesn’t relate directly to the letter to the grand jury. It is the fact that the city council has seen fit, in the wake of all the mismanagement and failure to use the expertise of the city attorney in ways that were crucial, to give that person an almost 50 percent raise. On top of that, the resolution to do so states that if the city attorney is confronted with complex litigation or issues, he can bill the city for extra time, plus all of his costs. So here is a very experienced person, now earning $10,500/month representing a village of 4,000 persons, and his job description is so loose that he can, if he wishes to do so, take great advantage of the city.

None of this makes sense. and I don’t think the city should be applauded for making changes, long late in coming, and in overlooking the key elements of what went wrong in the first place.

Bill Hood is a retired water lawyer and engineer and former executive director of the Association of Monterey Bay Area Governments. He lives part-time in Carmel.


The Monterey Herald weighs in with an editorial criticizing the Monterey County grand jury report on Carmel governance and praising the Pine Cone.

The Herald, by the way, has not reported the substance of the grand jury report and makes no mention here about its key findings, that biased Pine Cone coverage created the problems addressed by the grand jury.


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One of the bigger stories of the year in Carmel broke on a Friday, too late to make it in that week’s Carmel Pine Cone. Fortunately, we have the Monterey Bay Partisan, which let the community know about the Monterey County grand jury report that blamed the weekly newspaper for causing problems at City Hall rather than simply reporting on those problems.

Now, the fine folks at the Monterey County Weekly have helped spread the word by reprinting the Partisan’s unflinching account. If nothing else, it will give PC Publisher Paul Miller something tangible to crumple up while he works on his own report due out in the morning.

Our prediction: Miller will announce that he has seen the error of his ways, admit that he was hellbent on stirring up trouble rather than informing the public and that he welcomes the attention and suggestions from an obviously public-spirited grand jury.


500_F_53293135_27J85jZn71YPw8YyiI93FVhmRFHQ1gFuThe following is a letter from Bill Hood to the Monterey County grand jury, which is looking into the personnel actions and other issues that have rocked Carmel City Hall in recent months. Hood lives in Carmel and is a former executive director of the Association of Monterey Bay Area Governments.

I am a former full-time resident of Carmel, and currently live on the Peninsula as a part-time resident.  I am a semi-retired member of the California Bar and follow closely the actions of local government agencies, including the city of Carmel.   I have spoken out, both personally and in the media, about issues relating to lack of leadership relative to realization of a reliable water supply, transparency in decision-making, and prudent management of public funds.

This past week, an article appeared in the Carmel Pine Cone calling for an immediate response to the grand jury, given the fact that the above-referenced investigation is currently underway.   I respectfully request that this letter be distributed to the jury members and staff, and that it be incorporated as part of the record that is being compiled during the investigation.

The Pine Cone article states that Mayor Jason Burnett sent a letter in November  2014 requesting the grand jury to “review our organization, our corrective action and make any additional recommendations.”   While his request, taken out of context, would seem to be a prudent action, when considered within the context of the history of Jason Stilwell’s time as city administrator, it is very telling, indeed.

Mr. Burnett’s letter and the request therein can only be interpreted as a too-late attempt to cover the fact of his and his council members’ continuing failure to exercise any reasonable level of oversight in the face of numerous actions taken by Stilwell and his senior staff that would have raised red flags to even the casual observer.

While I am focusing on the belief that those involved negligently failed in their official responsibilities, the possibility exists that the actions of Stilwell and some of his staff were actually in response to direct orders to do so.  If that is found to be the case, then negligence, while still unacceptable, would  not be involved, and the level of breach of the public trust would become more serious.

Interestingly, when the string of Stilwell decisions first became public knowledge, and in spite of the immediate concern and indignation that arose in the community, Mr. Burnett’s first reaction was to praise Stilwell.   And, importantly, the mayor’s request, in looking to the future by asking for “recommendations,” ignores the past.   Past failures in responsibility that actually caused harm to others, and which are proven by your investigation, clearly cannot be overlooked.   Such failures demand appropriate and relevant responses that are not confined to “Yes, you made a mistake; we are not going to punish you, but will simply tell you what not to do in the future.”

Recommendations for future corrective action are necessary, but it would be a whitewash to completely allow harmful actions already taken to get by with a slap-on-the wrist and no more.  The “corrective actions” to which Mr. Burnett refers are a valid request, but, once again, on their face they ignore any responsibility for all of the time in which prior harmful actions took place, but no “corrective actions” (“oversight,”  from my perspective) were to be found.

For example, Burnett, the council and the city attorney apparently sat idly by while undeserving staffers were fired by Stilwell’s assistants, out-of-area consultants were hired and paid exorbitant amounts, rubber-stamped by those who were elected or appointed to protect the public trust.  To the extent they looked the other way or asked no questions regarding Mr. Stilwell’s questionable actions and the results that flowed from them during the time when they took place, the mayor, council members, and even the city attorney abdicated their responsibilities, and by doing so, violated that trust.

Some have told me that the city attorney was deliberately kept out of the loop with respect to much of what Stilwell did.   That may be true.  But, in his capacity as city attorney, I would have hoped that person would have immediately realized that reality, and spoken up as to what his position should expect of him.

As an attorney who has served as in-house counsel for several major corporations and government agencies, I did not need to be told that my responsibilities included primary involvement in the careful selection and ongoing management of outside counsel.   And, with respect to both lawyers and other consultants, I routinely reviewed contracts and other legal documents binding my clients for legal accuracy and to ensure that questionable or detrimental provisions were properly addressed.

Under Stilwell’s tenure, available information seems to indicate that the city attorney was not asked to undertake that important role or that he did not exercise his own initiative to demand that he do so.  It is once again very telling that, this late in the game, he has been asked to go back and review and evaluate contracts entered into by Stilwell with respect to consultants and law firms.   A normal and necessary procedure would be for an in-house counsel (which the city attorney is for the city) to review communications and billing documents from outside counsel on a regular basis as part of hands-on oversight.  If the city attorney failed to do so, for reasons not his fault, then the mayor and council should assume responsibility for their failure in not requiring him and Stilwell to follow that procedure on every occasion.

Their collective failure to do this has, in part, led to the situation that has triggered your investigation.

Therefore, I respectfully request that your investigation:

  1. identify all  persons within the city’s governmental structure who had any element of responsibility for Stilwell and/or his staff’s actions that resulted in harm, but failed to do anything about them; or, in the alternative, specifically directed Stilwell and/or his staff to undertake those same actions;
  2. describe, to the greatest extent possible, the harm suffered by individuals targeted by the foregoing actions that caused the harm;
  3. take into account the harm caused to the greater Carmel community and to the city’s reputation as a result of the foregoing actions; and
  4. recommend corrective actions not only to prevent future recurrence of such failures, but also as to appropriate sanctions that should be levied upon those found guilty of any failures so identified.

In addition, in order for the investigation and its conclusions and recommendation to be acceptable and relevant, it must be undertaken in a completely objective and fair manner, with respect not only to those who may be targets of the investigation, but also to the public, which has already suffered harm as a result of the events that transpired.

Thank you for your time and consideration.