By Andrea Adelson and Jean Ardell | LB Indy
Candidate Judie Mancuso and four others accused Mayor Steve Dicterow of a lack of transparency over his troubled personal finances during the Laguna Beach City Council meeting Tuesday, Oct. 16, allegations Dicterow refuted in measured tones from the dais as well as in a later interview.
Mancuso was one of several speakers who alleged Dicterow had failed to comply with election code disclosure rules for those who hold elected office. “As a resident I think it is critical that we know what everyone’s financial situation is,” she said.
Mancuso also pointed out that Dicterow, who filed for Chapter 11 bankruptcy protection in 2014, wields influence in making decisions over city finances. “If he has chosen bad, wrong decisions, then maybe those same bad, wrong decisions might transfer over to his management of city finances.”
Generally, council members refrain from replying to comments made during the public communications portion of the meeting. In this instance, with the consent of his colleagues, Dicterow said he felt compelled to come to his own defense and point by point refuted each individual allegation raised by a handful of people, including some who appeared to be Mancuso supporters.
Specifically, Mancuso and others said Dicterow had improperly completed Form 700, a statement of economic interest required by the Fair Political Practices Commission; failed to tell voters about his bankruptcy; and reported his sources of income inconsistently on candidate disclosure forms and to the bankruptcy court.
A reorganization plan submitted to the Central District U.S. Bankruptcy Court for Dicterow on Aug. 28, 2015, shows Dicterow’s sources of income. They include his work as an independent contractor earning $4,000 a month from American Computer Optics of Irvine and $8,000 a month from attorney Gene Goldsman of Santa Ana, respectively.
Dicterow maintains that he is complaint with FPPC disclosure rules, which do not require disclosure of income sources that originate outside of the political jurisdiction where an elected official serves.
“The court monitored me for a year to make sure my payments are being made,” said Dicterow. “If I fail, the creditors go back to court.” Court records show that Dicterow’s unsecured debts amounted to $283,170, including $72,861 in credit card bills, a $13,289 business credit line and $194,068 in students loans incurred on behalf of his daughter, Taryn.
In an earlier interview, Dicterow said he sought the bankruptcy court’s protection because of a foreclosure threat from his lender, who had refused to negotiate with him over 20 months despite his entreaties. Income from his $500,000 investment in a motorcycle racing circuit, underwritten by a $1 million mortgage in 2006 on his Holly Street house, had dried up. Another venture, a 10-year mold remediation franchise, didn’t pan out. He said he refused to sell his home of 30 years out of devotion to his wife, Catrina, who is blind. “It gives her comfort,” Dicterow said.
At the council meeting, Martin Edens and William Levin both were dismissive of the accusations. Edens, who said he has worked with Dicterow, called him a “reliable business partner,” and called the criticism of him “a smear kind of thing.”
Levin, who established a law partnership with Dicterow in January, called the criticism “an extremely opaque attack.”
An email from a faux sender that outlined the allegations that were raised at the City Council meeting began circulating as early as September. The sender was firstname.lastname@example.org. Readers of the writer J.K. Rowling will recall that Barry Fairbrother is a character in her first adult novel, “A Casual Vacancy,” whose sudden death leaves an open seat on the parish council. The true originator of the email remains a mystery.
Mancuso denied she had a part in its origin. When Mancuso read it, she said, “I hit forward, and sent it to others in town as an FYI. Others said, ‘Wait, this matters,’ and they decided to run with it.”
The morning after the council meeting, Dicterow said that he fielded dozens of telephone calls and email messages, “all of them in support,” he said.
Dicterow said he remains open to conversation with the voters of Laguna Beach. “But there will be no retaliation. My only issue is to make sure I’m not smeared.”