Call for Anjali Kausar’s Resignation

The letter below calling for Anjali Kausar’s resignation due to a conflict of interest was sent to the CUSD Board. Download the entire letter here. Sign the petition here.

Date:         January 30, 2017

To:             Cupertino Union School District Board of Education
Subject:    Call for Anjali Kausar’s Resignation from the CUSD Board of Trustees

Dear President Kausar and Members of the Board:

Many parents and community members have lost trust and confidence in the ability of Board President, Anjali Kausar, to fulfill her duties to the citizens of Cupertino Union School District due to an apparent conflict of interest. Elected officials are compelled to disclose their financial interests in order for the public to be informed of any potential bias or conflicts in loyalty. In this case, as an elected public official, Anjali Kausar has failed to disclose her investment and income interests throughout her tenure on the CUSD Board of Trustees. Instead of recusing herself from participating in governmental decisions where she had known conflicts of interest, Ms. Kausar placed her self-interests above those of CUSD students and schools. Anjali Kausar has demonstrated that she is either unable or unwilling to carry out her sworn duties and should immediately step down.

I.  INTRODUCTION

Anjali Kausar has served as a CUSD Board of Trustee since February 3, 2009 in multiple capacities and currently serves as its President. As a public official, Ms. Kausar is prohibited by Government Code § 87100 of the Political Reform Act (PRA) from making, participating in making, or attempting to use her official position to influence any governmental decision in which she knew, or had reason to know, she had a financial interest.

Anjali Kausar has served as the Executive Director of the Cupertino Chamber of Commerce since September 16, 2013 and currently serves as its Chief Executive Officer (CEO). According to its website, the Chamber collaborates with government, education, and private industry to assist and strengthen local businesses, to be an advocate for business, and affect the high quality of life for which Cupertino is known. Throughout Ms. Kausar’s tenure, Intero Real Estate Services (“Intero”), The Sand Hill Property Company (“Sand Hill”), and Apple, Inc. have been paying members of the Cupertino Chamber of Commerce.

Anjali Kausar has served as a real estate agent for Intero Real Estate Services since January 2010. In November 2014, Intero represented Sand Hill in its $400 million purchase of the Vallco shopping mall in Cupertino. Sand Hill sought to redevelop the Vallco property with a reported investment of $3 billion, which Intero also supported. The Vallco redevelopment plan required re-zoning approval by the City Council of Cupertino, which stalled with public concerns over housing, traffic, and school impacts. During the November 2016 election, Sand Hill sponsored a Cupertino ballot measure (Measure D) to gain citizen approval for the Vallco redevelopment project.

II. LEGAL VIOLATIONS

  1.  Inaccurate and Untimely Filing of Disclosure Statements (Form 700)

As a CUSD Board Trustee, Anjali Kausar must file annual conflict of interest disclosure statements pursuant to the PRA. This Statement of Economic Interests (Form 700) must disclose the filer’s sources of income, specified types of investments, and interests in real property and businesses, income, gifts, and loans. (Govt C §§87103, 87203, 87206-87207)

All reports and statements filed under the PRA must be signed under penalty of perjury and verified by the filer, indicating that all reasonable diligence was used in its preparation and that to the best of his or her knowledge, it is true and complete. (Govt C §81004) If errors or omissions are discovered on any statement, an Amendment must be filed as soon as possible.

California state law (AB 1234) imposes mandatory ethics training requirements on all local elected officials, which includes the topic of conflict-of-interest laws. (Govt C §§53234-53235.2) Each public official must receive 2 hours training in ethics within the first year of service. Thereafter, those officials must receive 2 hours of training every 2 years. (Govt C §§53235, 53235.1(b)) Further, the Fair Political Practices Commission (FPPC) provides extensive information and instructions on Form 700 reporting or filing, including Frequently Asked Questions (FAQ’s) and a support hotline.

Summary of Facts

a) On February 19, 2009, Anjali Kausar filed her first Form 700, reporting among other investment interests stock of Apple, Inc. with fair market value between $10,001 – $100,000. She also reported rental income of $10,001 – $100,000 for a property in Milpitas, CA and other salary income. [Exhibit A]

b) On March 12, 2010, Anjali Kausar filed an annual Form 700, reporting among other investment interests stock of Apple, Inc. with fair market value between $10,001 – $100,000. She also reported salary income.

c) On March 18, 2011, Anjali Kausar filed an annual Form 700, reporting a gift from Caldwell Flores Winters. She reported zero interests in income, investments, or real property.

d) On March 12, 2012, Anjali Kausar filed an annual Form 700, reporting zero interests in income, investments, real property, or gifts.

e) On February 26, 2013, Anjali Kausar filed an annual Form 700, reporting a gift from Piper Jaffray. She reported zero interests in income, investments, or real property.

f) On March 3, 2014, Anjali Kausar filed an annual Form 700, reporting zero interests in income, investments, real property, or gifts.

g) On February 4, 2015, Anjali Kausar filed an annual Form 700, reporting a gift from Sodexo America. She reported zero interests in income, investments, or real property.

h) On March 31, 2016, Anjali Kausar filed an annual Form 700, reporting an investment interest in stock of Apple, Inc. with fair market value between $10,001 – $100,000. She also reported salary income of $10,001 – $100,000 from Cupertino Chamber of Commerce.

i) On May 4, 2016, Anjali Kausar filed Amendments to the aforementioned Form 700’s to report the following errors and/or omissions [Exhibit A]:

1)    Year 2010.  Investment interest in stock of Apple, Inc. with fair market value between $10,001 – $100,000. Commissions income of $1,000 – $10,000 from Intero Real Estate.

2)    Year 2011.  Investment interest in stock of Apple, Inc. with fair market value between $10,001 – $100,000. Commissions income of $10,001 – $100,000 from Intero Real Estate.

3)    Year 2012.  Investment interest in stock of Apple, Inc. with fair market value between $10,001 – $100,000. Commissions income of $10,001 – $100,000 from Intero Real Estate. Gift from Dannis Wolver Kelly.

4)    Year 2013.  Investment interest in stock of Apple, Inc. with fair market value between $10,001 – $100,000. Commissions income of $10,001 – $100,000 from Intero Real Estate. Salary income of $10,000 – $100,000 from Cupertino Chamber of Commerce.

5)    Year 2014.  Investment interest in stock of Apple, Inc. with fair market value between $10,001 – $100,000. Commissions income of $10,001 – $100,000 from Intero Real Estate. Salary income of $10,000 – $100,000 from Cupertino Chamber of Commerce.

6)    Year 2015.  Commissions income of $1,001 – $10,000 from Intero Real Estate.

When Anjali Kausar reported an investment interest in Apple, Inc. in 2009, it is questionable that she “forgot” that she owned stock in Years 2010, 2011, 2012, 2013, and 2014 …. only to “remember” in March 2016 that she still owned Apple stock.

When Anjali Kausar reported salary income in 2009, it is questionable that she “didn’t know” to report income from Intero Real Estate in Years 2010, 2011, 2012, 2013, 2014, and 2015… only to “learn” in May 2016 that she must report her income.

When Anjali Kausar reported salary income in 2009, it is questionable that she “didn’t know” to report income from the Cupertino Chamber of Commerce in Years 2013 and 2014, …. only to “learn” in March 2016 that she must report income.

On March 31, 2016, Anjali Kausar correctly reported for Year 2015 an investment interest in Apple, Inc. and salary income from the Cupertino Chamber of Commerce. Yet, Ms. Kausar waited until one month later on May 4, 2016 to file Amendments for omissions during previous years. It is notable that also on May 4, 2016, the Cupertino Chamber Political Action Committee (PAC) filed an Amendment to their campaign finance Form 410. Discoverable documents may determine whether the timing of Ms. Kausar’s and the Chamber PAC’s filings was coincidence or collusion.

During those years that Anjali Kausar failed to report conflicts on the annual Statements of Economic Interests (Form 700), she fully participated in governmental decisions in which she had a financial interest – a violation of statutory requirements.

  1. Conflict of Interest in Governmental Decisions

An official has a conflicting financial interest “if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from its effect on the public generally, on the official,..” (Govt C §87103) or on a specified interest in any relevant business entity, real property, or income or gift source.

An official will be disqualified from acting on any matter materially affecting any source of income aggregating $500 or more provided to, received by, or promised to the public official within 12 months before the time the decision is being made. (Govt C §§82030, 87100, 87103(c)) Any direct or indirect investment of $2,000 or more in a “business entity” creates an “interest” for the official and is also disqualifying. (Govt C § 87103, subd. (a))

Further, an official will be disqualified from acting on any matter related to any business entity in which the public official is a director, officer, partner, trustee, employee, or holds any position of management. (Govt C §§87100, 87103(d))

Whether a decision will have a material financial effect on the public official’s interest depends upon whether the interest is directly or indirectly involved. If the interests are directly involved, materiality is generally presumed, and the public official usually will have to disqualify himself or herself from the decision. If a person is paid to promote or advocate the policies or position of an individual or group, the official may not then participate in a governmental decision that involves that policy or position. A “nexus” exists if the official receives income in his or her private capacity to achieve a goal or purpose that would be achieved, defeated, aided, or hindered by the governmental decision. (Govt C § 18705.3,subd.(c)) “For example, the executive director of an organization, who as a part of his or her duties advocates pro-growth positions endorsed by his or her organization, is disqualified from participating in any decisions in his or her capacity as a member of a board that would advance or inhibit the accomplishment of the organization’s goals.” (Best Advice Letter, No. A-81-032)

Government Code §1090 forbids financially interested public officials from any participation in the making of a contract, including preliminary discussions, negotiations, compromises, reasoning, planning, drawing of plans and specifications, and solicitations for bids and subsequent modifications to a contract and “follow-on” contracts. A disqualified official must not be present when the governmental decision on which he or she is disqualified is considered, and the official must not obtain or review any nonpublic information about the governmental decision, including participation during a closed session of the agency. (Govt C §87105)

Summary of Facts

Pursuant to the Political Reform Act, Anjali Kausar would have been prohibited from participating in governmental decisions relating to Intero Real Estate (2009-2016), the Cupertino Chamber of Commerce (2013-2016), and Apple, Inc. Yet, Anjali Kausar has not recused herself from any decision due to a conflict of interest while serving on the CUSD Board.

Undoubtedly, multiple violations have yet to be discovered. The following known occurrences represent a clear conflict of interest and pattern of willful misconduct:

a) On June 16, 2015, CUSD Board accepted the Letter of Intent between Sand Hill Property Company and CUSD. Anjali Kausar “seconded” the motion to approve the agreement. [Exhibit B]

b) On September 8, 2015, CUSD Board approved the purchase of laptop computers from Apple, Inc. in the amount of $1,243,200 from the consent calendar. Anjali Kausar “seconded” the motion to approve the contract. [Exhibit C]

c) On November 17, 2015, CUSD Board ratified warrants including a check to Apple, Inc. in the amount of $1,391,515.39. Anjali Kausar voted to approve the warrants. [Exhibit D]

d) On June 7, 2016, CUSD Board approved a Donation Agreement with Sand Hill (“Vallco Property Owner, LLC”). Anjali Kausar “moved” to approve the agreement. [Exhibit E]

e) Anjali Kausar participated in numerous closed sessions for “real property negotiations” related to Sand Hill, Luther School site, Finch property, and many others.

Each time Anjali Kausar voted on the aforementioned agenda items, she made a government decision. During the 12 months prior to these decisions, she received income from the Cupertino Chamber of Commerce; plus, she owned stock in Apple, Inc. Therefore, Anjali Kausar had an economic interest in the aforementioned decisions.

Anjali Kausar’s duties as the Chamber of Commerce CEO include overseeing all Chamber functions and promoting Chamber policies and pro-growth, business activities. The Chamber utilizes a tiered membership structure. When a business grows, its Chamber membership dues increase. Clearly a nexus exists between Anjali Kausar and Cupertino Chamber of Commerce because she is paid to promote and advocate its policies. Further, any government decision involving a Chamber member may benefit or hinder the Chamber’s financial condition.

On multiple occasions, Anjali Kausar has illegally used her official position to influence a government decision in which she knew or should have known as a matter of law that she had a financial interest. Statutes enumerate consequences for violations, and reliance on the advice of an attorney that one’s conduct is legal does not constitute a defense. (Govt C §1097; People v Chacon (2007) 40 C4th 558, 570; People v Honig (1996) 48 CA4th 289, 347)

  1. Use of Public Office for Private Gain

Federal and state laws prohibit public office from being used for private gain, including for the endorsement of products, services or enterprises. Public officials cannot use their positions, titles, or any authority associated with their public office in a manner that is intended to coerce or induce another person for the benefit of oneself or another person(s) with whom the official is affiliated in a nongovernmental capacity.

Summary of Facts

a) On or about November 3, 2016, Anjali Kausar used the title of “School Board Trustee” on a direct mailer sent to voters during the election in support of Measure D. Use of the title was intended to sway voters’ support for Measure D with the implied message that Vallco development is good for local schools. [Exhibit F]

Anjali Kausar used the title of “School Board Trustee” to publicly endorse Measure D, an initiative sponsored by Sand Hill Property Company. Ms. Kausar’s employer, Intero Real Estate Services, represented Sand Hill in the Vallco transaction and stood to gain from the $3 billion investment if Measure D had passed. While Ms. Kausar may not have been the direct agent, she may have gained financially from Intero’s profit sharing plan.

b) On November 3, 2016, Anjali Kausar used the title of “Vice President, Cupertino Union School District Board of Education” on a Facebook ad to denounce Measure C, a competing ballot initiative to Measure D. [Exhibit F]

c) Anjali Kausar’s use of the aforementioned titles violates CUSD school board’s bylaws. “When speaking to community groups, members of the public, or the media, individual Board members should recognize that their statements may be perceived as reflecting the views and positions of the Board. Board members have a responsibility to identify personal viewpoints as such and not as the viewpoint of the Board.” (9010 BB – Public Statements)

III.  CLOSING

The chorus of parents and community members questioning Anjali Kausar’s ethical standards and loyalty to the public’s interests continues to grow. A recent petition on Change.org calling for her resignation has reached nearly 1,000 supporters.

Given the circumstances, it is untenable that Anjali Kausar can continue serving on the CUSD school board. Discovery of her past violations has only just begun. Further, the Cupertino Chamber of Commerce boasts hundreds of members, all of which pose a conflict of interest for Ms. Kausar, as CEO. Anjali Kausar is prohibited from participating or voting on any issue that would affect, positively or negatively, not just herself, but any Chamber of Commerce member, including but not limited to the following topics:

  • She can’t vote to expand or discontinue the Apple iPad program.
  • She can’t vote to acquire or dispose of schools or real estate.
  • She can’t vote to open closed schools or close open schools.
  • She can’t vote to build new school buildings or to buy new portables.
  • She can’t vote to increase or decrease class sizes.
  • She can’t vote to change school boundaries.

The California Attorney General, the Fair Political Practices Commission (FPPC), and local district attorneys are empowered to enforce the Political Reform Act of 1974 (PRA) through criminal sanctions, civil liability, civil penalties, and administrative sanctions. (Govt C §§83115-83124, 91000-91014). Additionally, civil prosecution may be pursued by various persons, including residents of the jurisdiction, depending on the circumstances. (Govt C §91004)

In using her public office for private gain and failing to disclose conflicts of interest, Anjali Kausar has discredited herself and the Cupertino Union School District. This letter calls for Anjali Kausar’s immediate resignation from the CUSD Board of Trustees.

Sincerely,

##

Sign the petition calling on Anjali Kausar’s resignation here.

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