FPPC accuses San Simeon official of conflicts of interest


The California Fair Political Practices Commission voted Thursday not to approve a penalty agreement with San Simeon’s general manager because it did not adequately describe the public harm Charlie Grace’s misconduct has had on the community. The board then directed staff to bring a stronger reprimand back to the commission next month.

Before Thursday’s Fair Political Practices Commission (FPPC) meeting, Grace agreed to pay a $4,500 fine for violating conflict of interest laws. In 2016, as San Simeon Community Services District’s general manager, Grace negotiated a contract with Grace Environmental Services, a private company he owns.

Noting this was the first time the FPPC has penalized a public official for a Government Code 1090 violation (contract conflict of interest law), Commission Chair Richard Miadich spoke of the need to “get off on the right foot” and the “importance of protecting the integrity of public officials.”

“The public was harmed when Mr. Grace was on both sides of the transaction, that is the harm, and it is a significant harm,” Miadich said. “It diminishes the public’s ability to trust that government decisions are being made for the benefit of the people and not for the self interest of the public official involved.”

FPPC officials discussed Grace’s argument that San Simeon CSD’s legal counsel should have questioned the illegalities, before deciding that having inadequate counsel is not an excuse for breaking the law.

Commissioner Frank Cardenas then questioned Grace’s changing claims over whether or not he is the CSD’s general manager.

Charles Grace

“Who is the general manager of the San Simeon Community Services District?” Cardenas asked. “I ask the question almost rhetorically because Mr. Grace has at different times suggested that he is, and that he ain’t, depending on what might be convenient at the moment.”

The FPPC voted unanimously to reject the stipulated order, and to direct staff to “negotiate new language in a stipulation making clear the significant public harm that was caused by Mr. Grace’s violation of 1090.”

Grace is no stranger to paying fines to the state. In 2011, the State Water Board fined Grace $30,000 for alleged failures to follow regulations while working at a wastewater treatment facility.

Late last month, the San Luis Obispo County District Attorney’s Office filed a civil suit against Grace and Grace Environmental Services alleging illegal business practices and false advertising in his work with the San Simeon CSD.

Responding to Grace’s legal issues, San Simeon legal counsel Jeff Minnery amended Grace’s contract which now lists Grace Environmental Services as San Simeon CSD’s general manager.

During a San Simeon Community Services District meeting last week, Minnery said the new contract provides clarity, though he failed to inform the board that the FPPC’s action would void Grace’s previous contract with the CSD.

After praising Grace’s performance, the San Simeon CSD Board voted unanimously to approve his new contract.

“I support Charles Grace 100%, he’s done a wonderful job for the community,” CSD Director Will Carson said. “He’s provided clean drinking water, the sewer doesn’t overflow anymore and pollute the ocean like it did a number of times with previous operators.”