Berkeley councilman Laurie Capitelli profited from $500,000 housing loan given to police chief, paper says

Laurie Capitelli, Espresso Roma, Berkeley, CA, Oct. 10, 2012.
Laurie Capitelli at Espresso Roma, Berkeley, CA, Oct. 10, 2012. Photo: Emilie Raguso

Update, Oct. 5: Councilman Laurie Capitelli issued a statement Monday to clarify his role in the purchase of a home by Berkeley Police Chief Michael Meehan in 2010 following a City Council vote the prior year to loan the chief money toward the purchase. Capitelli told Berkeleyside he never served as the real estate agent for the home purchase and did not split a $30,000 commission for the deal, contrary to what was reported Friday by the Bay Area News Group. Capitelli told Berkeleyside he received an unsolicited payment after providing another agent advice about sewer lines and creeks, which he says he now plans to donate to charity. He initially kept the money because he said he was advised by Berkeley’s city attorney that there was no ethical conflict related to the vote and his role in the later transaction.

Original story, Oct. 3: Seven months after City Councilman Laurie Capitelli voted in November 2009 to loan incoming Police Chief Michael Meehan $500,000 in public funds to buy a house, he helped sell Meehan a home and garnered a $15,000 commission, according to a report by Thomas Peele for the Bay Area News Group.

Capitelli had not been hired as Meehan’s real estate agent when he voted with the rest of the City Council to provide the housing loan. Consequently, he does not feel he broke any ethical boundaries, he told the newspaper.

“I had no clue I’d be representing him” when the loan was approved, said Capitelli, 69, who is a partner in Red Oak Realty. “He came to me months later.”


Others, including City Councilman Kriss Worthington and an ethicist, think Capitelli did violate ethical boundaries.

“No way!” Worthington told the Mercury News. “It is almost inconceivable. It’s just slimy and unethical. It cheapens the office” of council member.

Meehan bought a home in June 2010 in the Thousand Oaks neighborhood for $1.185 million, $90,000 above the asking price, according to the report. The city’s loan, which he combined with others, was offered at 3% interest.

Red Oak Realty got a $30,000 commission for the sale, which Capitelli split with another agent, according to the Mercury News.

Capitelli said city lawyers told him representing the police chief would not violate state conflict-of-interest rules because they had no representation agreement prior to the loan vote.

Capitelli is widely expected to run for mayor in 2016 when Mayor Tom Bates steps down. Bates announced during his last campaign that that would be his last.

Read the complete story here.

Do you rely on Berkeleyside for local news? Support independent journalism by becoming a Berkeleyside member for $5 a month or even less, or by making a one-time donation.