Broker in Ash Street, Civic Center Plaza deals responds to conflict-of-interest allegations

Jason Hughes, the volunteer adviser to San Diego mayors who collected almost $10 million for his work on two lease-purchase agreements, has cited a City Attorney’s Office memo to explain why he did not previously disclose that compensation.

In a formal answer to a lawsuit filed by City Attorney Mara Elliott that accused Hughes of a financial conflict of interest, lawyers for Hughes said their client repeatedly told city officials he expected to be paid for his services.

The court filings say Hughes worked with three mayoral administrations — Bob Filner, Todd Gloria and Kevin Faulconer — without being directed to file what’s called a Statement of Economic Interest.

Gloria, a former council member who stepped in as interim mayor after Filner resigned in mid-term, was elected mayor last fall.

The legal documents Hughes filed also include screenshots of internal emails that he says indicate city officials were aware as early as 2013 that Hughes may need to file state-required financial disclosures.

The documents also quote from a 2007 legal memo signed by then-City Attorney Michael Aguirre that suggests it was the city’s job — not Hughes’ — to make sure disclosure rules are complied with.

“At all times, the city understood that the responsibility for determining whether an informal adviser like Hughes had any sort of disclosure obligations laid with the city, not Hughes,” his lawyers wrote.

The City Attorney’s Office said the emails and a 14-year-old memo do not relieve Hughes of his duty to follow the law.

“Jason Hughes’s use of select emails will not fool the court or absolve him from his obligation to report income in the manner and form required by state law,” Elliott spokeswoman Hilary Nemchik said by email.

“The fact remains that his secret commissions from Cisterra were not disclosed until he was subpoenaed by City Attorney Elliott,” Nemchik wrote.

Elliott sued Cisterra Development and its financier, Wilmington Trust, in October, asking a judge to validate former Mayor Kevin Faulconer’s decision to stop paying for a high rise the city acquired from them in a 2016 lease-purchase deal.

The 19-story office tower at 101 Ash St. was unable to be occupied due to asbestos and other issues, but the city paid more than $23 million in rent for the vacant property before suspending the $535,000 monthly payments.

As a result of the lawsuit, city lawyers learned earlier this year that Cisterra paid Hughes $4.4 million for arranging the Ash Street transaction and $5 million for a similar agreement for the nearby Civic Center Plaza high rise in 2015.

Cisterra was the seller in both transactions. Hughes, Faulconer and other public officials for years had represented Hughes’ consulting work for the city as a volunteer effort.

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