Report: Undisclosed payments to councilwoman created ‘disqualifying’ conflict of interest on votes

Councilwoman Jeannine Pearce had a financial conflict of interest that disqualified her from voting on two major issues in her district because she received payments from businesses linked to the cannabis industry and the Queen Mary, according to an outside law firm contracted by the city to investigate the matter.

According to the report, Pearce in 2018 failed to disclose $11,222 she received from DNS Verde, LLC, which is owned by Dan Zaharoni, the development manager of Urban Commons, which operates the historic ship.

In 2019, she also received $30,000 in income from Global Growth International and From the Earth, LLC, both cannabis-related companies owned and controlled by Zaharoni.

The report also found that although Pearce updated 2018 legal forms required of public officials following a Long Beach Post story in May, she did not report all of the income she received—even on the amended forms.

Pearce should be barred from voting on or communicating with city staff over issues related to cannabis and the Queen Mary—a major asset in her council district—for at least 12 months from the date of her most recent payment, the report said.

The Queen Mary. Photo by Thomas Cordova.

The report was triggered by the Post story on May 30 in which Pearce admitted she had worked for Zaharoni. The report, by Best Best & Kreiger, was released Friday afternoon to the mayor and City Council.

Elected officials are considered to have a conflict if they have received more than $500 for services in the prior 12 months.

The report also found that Pearce’s participation in a March 12 vote related to a study into the feasibility of a gondola system between Downtown Long Beach and the Queen Mary “may have been in violation of the Political Reform Act because Councilmember Pearce had a disqualifying conflict of interest,” the report said.

Though her individual vote may be invalid, the City Council voted unanimously in favor of the item, so the motion would still carry, the report said.

In a statement, Pearce said she is not the only council member who may have conflicts of interest.

“As recently as this past Tuesday’s council meeting, a colleague of mine needed to recuse himself from a particular vote due to his employment,” she said. “I do applaud this new level of close scrutiny of council conflicts as a critical step forward for the city. The relaxed atmosphere of the past has led to many questionable decisions and practices, doing a disservice to all Long Beach.”

She said in an earlier statement that she mistakenly believed she did not have to report income under $10,000—though Friday’s report shows her income was above that threshold.

“I am not the first and I am sure that I will not be the last to make errors in filling out this form,” she said Friday afternoon, referring to the financial disclosure form.

The report notes that Pearce was represented by an attorney in this matter, and is free to seek an opinion from the Fair Political Practices Commission, an independent state agency.

The report was commissioned by City Attorney Charles Parkin. It was not immediately clear whether the council will take any action on the report.

Pearce said she cooperated with the investigation, but “I am glad that this process has come to an end.”

Editor’s note: This story was updated with Pearce’s statement.

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Melissa has been a journalist for over two decades, starting her career as a reporter covering health and religion and moving into local news. She has worked as an editor for eight years, including seven years at the Press Telegram before joining the Long Beach Post in June 2018. She also serves as a part-time lecturer at Cal State Long Beach where she teaches multimedia journalism and writing.
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