California's political watchdog agency has determined that a former state senator who engaged in real estate transactions with a friend and campaign donor did not violate the state's political ethics laws.
The Fair Political Practices Commission had been reviewing both a short sale and a loan related to properties owned by former Democratic Sen. Michael Rubio, who resigned in February to take a job directing California governmental affairs for Chevron Corp.
Shortly after Rubio stepped down, it was revealed that a company managed by San Joaquin Refining Co. President Majid Mojibi purchased a Bakersfield home Rubio put up for a short sale after he had to move to remain eligible to represent the Central Valley's 16th Senate District. That company, DCM Asset Management, also provided Rubio with a loan to purchase a $681,000 home in El Dorado Hills last year when he was unable to receive a traditional mortgage. Rubio later sold the five-bedroom house back to Mojibi, whom he describes as a close personal friend, and began renting it.
The El Dorado Hills transactions, first reported by The Bee, was later disclosed in Rubio's annual Statement of Economic Interests form. That form also showed that Rubio was involved in another real estate deal with ties to the Mojibi family.
Those exchanges raised questions about whether the loan and the sale violated the Political Reform Act, which limits elected officials to $440 in gifts from a single source per year. A central issue for the ethics agency officials was whether the terms of the loan Rubio received would have been available to the general public.
A letter from the FPPC, which never formally acknowledged it was investigating Rubio, deemed the loan for his El Dorado Hills home was not a gift under the Political Reform Act.
"Because the transactions between you and DCM were commercial transactions conducted on terms available to the general public without being apparently specifically designed to provide personal benefit to you, neither the gift nor the gift disclosure requirements of the Act will apply," Adrianne Korchmaros, a political reform consultant in the Enforcement Division, wrote in the letter.
The letter also states that Rubio "provided documentation that the (Bakersfield) property was purchased at the fair market value of its price at the time," qualifying the payment as income, not a gift.
The agency's enforcement agency did reach an agreement with Rubio that he would pay a $200 fine for a technical disclosure violation related to how he reported the sale of his Bakersfield home in 2011.
PHOTO CREDIT: Then-Sen. Michael Rubio, D-Bakersfield, speaks, during a hearing at the Capitol in Sacramento, Calif. Tuesday, April 17, 2012.(AP Photo/Rich Pedroncelli)