Ex-Vernon Official Pleads Guilty to Violating Conflict of Interest Laws

Former city administrator gets community service, will not pay restitution.

By Elizabeth Hsing-Huei Chou, EGP Staff Writer

Former Vernon City Administrator Donal O’Callaghan pleaded guilty last Friday to a felony charge of violating conflict of interest laws by hiring his wife to do bookkeeping work for the city of Vernon.

O’Callaghan participated in the making of two contracts between the city and his wife Kimberly O’Callaghan, who went by her maiden name Kimberly McBride during her employment with the city.

Public officials are legally prohibited from making any decisions that could be used to benefit them financially.

Read this story IN SPANISH: Ex-Funcionario de Vernon Se Declara Culpable

Los Angeles Superior Court Judge Craig E. Veals on July 15 sentenced the 55-year old O’Callaghan to one-year probation and 200 hours of community service.

“We got what we wanted,” said Deputy District Attorney Max Huntsman. “[O’Callaghan] pleaded guilty to a felony and won’t be working as a city administrator in Vernon or anywhere else.”

While O’Callaghan will be barred from taking public office, he can still serve as a consultant through his private company, Tara Energy.

O’Callaghan resigned from his post in the City of Vernon last fall, after the city put him on administrative leave. Early last year, the city was considering a consultant contract with Tara Energy where his wife was the CEO.

Huntsman said O’Callaghan initially refused to plead guilty to a felony because it could jeopardize his immigration status in the United States. An Irish citizen of the United Kingdom, O’Callaghan has a U.S. issued Green Card granting him residency, provided he abides by all U.S. laws.

Immigration officials could take into consideration the dismissal of two felony counts when reviewing O’Callaghan’s status, said Huntsman.

O’Callaghan was indicted on three counts by a Grand Jury on Oct. 18, 2010. Two of the counts were dismissed as part of last Friday’s plea deal.

One of the dismissed counts charged him with intentionally breaking the law, and the other for excessively taking public funds beyond $65,000 for personal benefit.

O’Callaghan’s attorney Mark Werksman called the violation a “technicality,” and pointed out he will not even have to pay restitution for the salary that his wife took.

“The fact that the punishment is so lenient reflects the fact that he did not try to hide anything … and his wife provided a valuable service for a reasonable salary,” Werksman said.

Huntsman said if O’Callaghan had chosen to go to trial, the judge or a jury would have had an opportunity to look into whether O’Callaghan did intentionally break the law, and if his wife did provide valuable services to the city in exchange for the salary she received.

During Grand Jury testimony, several public and elected officials professed they did not know Kimberly McBride was his wife, even though a City of Vernon vision health plan enrollment form dated 2006 lists a Kimberly O’Callaghan as spouse.

O’Callaghan’s wife was not the only relative to have served as a city employee. She was hired through a third-party company, Project Labor, which also hired relatives of other top public officials.

Two brothers of Eric Fresch, former city administrator and now a paid advisor to the city, as well as the daughter of another former city administrator, Bruce Malkenhorst, were also hired through Project Labor.

The difference was O’Callaghan had a financial connection to his wife, said Huntsman, while other relatives on Vernon’s payroll had only personal connections.

Werksman said O’Callaghan “made no effort to hide she was his wife,” and believes Fresch knew of the relationship.

O’Callaghan and others went to work for the city with the mindset they were working for a private corporation, Huntsman said.

He added he has no objection with a city being run like a “well-oiled” business, but a city also has “awesome powers,” such as eminent domain, that private companies don’t have.

It is perfectly legal for private company employees to hire their own spouses, but those companies do not run on taxpayer dollars, he said.

Vernon Chamber of Commerce President Marisa Olguin issued a statement saying O’Callaghan’s guilty plea “is proof that the justice system works and corruption issues can be properly handled with existing laws.”

She reiterated businesses and labor groups’ opposition to AB 46 and AB 781 that could disincorporate the city. “Both Business and Labor remain united against these bills because we understand they fail to protect businesses, a majority of which are in the manufacturing industries, which employ tens of thousands of people in California. We also encourage Governor Brown to listen to both local labor and businesses and do the right thing in vetoing AB 46 and AB 781 should they reach his desk for signature. ”

She and other supporters of the city believe recent reforms in the city, such as the formation of a housing authority, reduction of city council salaries, and introducing a ballot measure to limit the terms of city council people, show that Vernon can move on from the mistakes of past public officials.

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July 21, 2011  Copyright © 2012 Eastern Group Publications, Inc.

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