HERCULES -- Former Hercules City Manager Nelson Oliva, who was widely blamed for the city's financial meltdown, could be fined $70,000 next week for conflicts of interest and undeclared gifts, such as airline travel, hotels and meals.
Investigators with the state Fair Political Practices Commission found that Oliva influenced the awarding of almost $2.9 million in city contracts to his family company, NEO Consulting doing business as Affordable Housing Solutions Group, from 2007 to 2011 while accepting almost $235,000 in gifts from the company in violation of the Political Reform Act. The commission launched its investigation after reading articles about Oliva's business dealings in this newspaper, said Milad Dalju, commission counsel for the FPPC.
Oliva's attorney, Richard Ewaniszyk, of Victorville, did not immediately respond to an email and a phone call seeking comment.
Oliva and his company was hired by Hercules in 2004 to rekindle an affordable housing program suspended after a city employee, Darrick Chavis, and his accomplice, LaMark Kevin Lassiter, diverted more than $390,000 in grant funds by means of fake invoices. The men were convicted in federal court and sent to prison.
In late 2006, Oliva was hired as assistant city manager, and in April 2007, he was appointed city manager after Mike Sakamoto retired. Oliva assured city officials that he had divested himself of his interest in NEO.
Hercules continued to do business with NEO, with his daughter Taylor Oliva ¿in the position of CEO, through most of Oliva's tenure as city manager. But the modest contract the company had with the city ballooned to approximately $1 million a year after Oliva was hired as city manager.
Oliva stepped down in January 2011 after negotiating a separation agreement with the city. Hercules severed ties with the company in 2011.
The violations and proposed fines are part of a draft Default Decision and Order produced by the FPPC's chief of enforcement, Gary Winuk, that will go before the commission Nov. 14. According to the draft order, Oliva waived his rights to contest the findings, which consist of 14 violations of $5,000 each.
Two of the violations stem from Oliva's acceptance and failure to report gifts in excess of annual limits. The gifts, according to a summary of FPPC evidence, consisted of purchases totaling $234,776 that Oliva made between 2007 and 2010 using three NEO credit cards. The purchases included airline tickets, groceries, restaurant meals, parking, hotel rooms and car rentals; NEO paid the credit card bills.
The FPPC report stated that Oliva, "in an attempt to hide his disqualifying economic interests in NEO and his conflict of interest ... deliberately failed to report any of the gifts he received from NEO" on his annual, state-mandated Statements of Economic Interest.
The other 12 violations reference 17 contracts totaling $2,889,000 that NEO was awarded while Oliva was city manager. The contracts covered a wide range of activities, including managing the city's affordable housing program, homebuyer loan programs, a beautification program, a mailbox installation program, managing a housing construction project, portfolio management and a variety of other administrative functions.
According to the FPPC report, Oliva "made, participated in making or attempted to influence a governmental decision in which he knew or should have known he had a financial interest," in violation of the Government Code.
Contact Tom Lochner at 510-262-2760. Follow him at Twitter.com/tomlochner.