El Monte’s city manager and then-mayor used an application that automatically deleted text messages, potentially in violation of state law, to coach an applicant attempting to secure a retail cannabis license from the city in 2020, according to a newly filed declaration in a pending lawsuit.
City Manager Alma Martinez set the application, called Signal, to delete messages after only an hour, according to a screenshot in the court filing.
State law prohibits public officials from destroying records that are less than two years old and requires them to obtain permission from their respective legislative body — in this case, the City Council — before the destruction, according to Kelly Aviles, an open government attorney.
“I believe the intentional destruction of records relating to the conduct of public business is not only a violation of the law, but may also be criminal,” Aviles said.
However, a district attorney isn’t likely to charge anyone for using Signal anytime soon. A citizen would need to seek an injunction, and then the court, at its discretion, could determine if the act was criminal. The willful destruction of records by a custodian is punishable by up to four years in prison.
Laws related to the retention of records, however, are quite murky. The California Public Records Act, which governs the public’s access, is mum on the length of time any record should be retained. Other state laws prescribe different timelines for different agencies and different types of records.
David Loy, legal director of the First Amendment Coalition, said the use of Signal is “obviously troubling” from a transparency standpoint, but the lack of uniformity in the law can create confusion — sometimes real, sometimes feigned — about what should be retained and for how long.
“I certainly don’t think it’s a good idea, but it’s not 100% clear that it’s illegal,” he said of the use of Signal.
The nonprofit advocacy group Consumer Watchdog is collecting signatures for a statewide initiative, expected to appear on the November 2024 ballot, to expand and clarify public agencies’ record-keeping responsibilities. The initiative, which Aviles helped draft, would set a five-year minimum for retention, require agencies to respond to requests within 30 days, limit certain exemptions; and make “available to the public communications and other records exchanged between government employees and entities outside of the government about policy decisions.”
Messages show cozy relationship
In her declaration, Teresa Tsai of GSC Holdings, a company that failed to obtain a retail cannabis license, alleged she was directed by then-Mayor Andre Quintero and Martinez in 2019 to use Signal — and only Signal — to communicate with them “prior to and during the application process.”
The declaration was filed in support of a lawsuit from FEAH LLC, another applicant that failed to receive a license and now alleges the process was fatally flawed.
Screenshots submitted to the court showed a series of messages from May 2019 to November 2019, months before the city began accepting applications, that suggested Martinez and Quintero assisted Tsai in efforts to legalize retail cannabis in El Monte.
“You should consider organizing people to show up to the council meeting to protest any new taxes,” Quintero allegedly wrote in a July 2019 Signal message to Tsai. “They are unwilling to consider cannabis sales, so they can tax us more.”
In a November 2019 message, Tsai wrote that she warned someone not to run against Quintero “or they’ll lose our support and all negotiations will end if they do that.”
While the deletion of the messages could have violated state laws, the contents do not appear to show any illegal conduct on their own.
Martinez deferred questions to Assistant City Attorney Lloyd Pilchen, who declined to comment due to FEAH’s pending litigation.
The city did not immediately respond to a request for its record-retention policy, but the city’s current mayor, Jessica Ancona, said there is no policy governing text messages.
‘Taints the process’
Ancona, a political rival of Quintero and a frequent critic of Martinez, called the use of Signal immensely concerning as it raises questions about what other conversations might have taken place.
“It taints the process in its entirety,” Ancona said. “With this information, it seems very clear to me that the former mayor and our current city manager conspired to rig the entire cannabis application process to award licenses to those who either contributed financially to campaigns or were political allies.”
The city’s attorneys have repeatedly denied there was any wrongdoing in the city’s selection. Though El Monte paid an outside law firm to investigate the process, the results have never been made public. FEAH’s attorneys have attempted to determine the results of the investigation, but have been unsuccessful so far because the city claims no final report exists.
Attorneys Jayan Hong and David Torres-Siegrist represent FEAH, which sued after it was ranked seventh in a process that awarded only six licenses.
“People use Signal for a reason,” Hong said. “Why is the city manager communicating directly with folks who are in the process of applying for cannabis licenses in such a discrete manner, knowing that those messages are not only extremely encrypted but are going to disappear?”
Messages deleted on Signal are not only removed from the local device, but also from the company’s servers.
A deluge of lawsuits
El Monte initially faced seven lawsuits over its handling of the licenses, most of which have since been resolved. FEAH, one of the last remaining litigants, alleges it was denied a license based on irregularities, favoritism and errors.
Five of the six winning applications were written by the same person, Hong said. Applicants donated a combined total of more than $100,000 to pro-cannabis candidates, the lawsuit alleges.
FEAH alleges city officials may have given some applicants “advance instructions” on how to maximize their scores, and pointed to the Signal messages as evidence.
In her declaration, Tsai stated Martinez “implied” an applicant would score higher in the “community benefits” portion of the application, which accounted for 175 points out of a total of 1,000, if it donated directly to the city’s general fund.
A grading rubric, available on El Monte’s website, publicly lists the same information, though that specific document appears to have been created after applications were submitted. FEAH’s attorneys deny their client knew the city would weigh general fund contributions more than those specifically benefiting parks or schools.
Though GSC did not receive a high enough overall ranking to obtain a retail cannabis license, the company pledged $100,000 directly to the city’s coffers and received the highest score possible for that section, according to the declaration. The company previously obtained licenses for cannabis cultivation, manufacturing and distribution in 2018.
In a series of messages in 2019, Tsai and Martinez brainstormed setting up a fee that would go to law enforcement in an effort to win support for their cause. At one point, Tsai asked Martinez to have then-Assistant City Attorney Joaquin Vasquez draft a code amendment based on their conversation.
“Have Joaquin incorporate into code amendment,” she wrote. “And I’ll mirror on my end.”
“Ok,” Martinez replied.
Other messages set up private meetings in downtown Los Angeles that included Tsai, Martinez, Quintero and a political consultant.
Former mayor denies wrongdoing
In an interview, Quintero acknowledged using Signal and the automatic deletion feature with Tsai. He had not seen the declaration, but he described conversations that matched screenshots in the court filing.
Quintero denied sharing proprietary information with any of the applicants and stated his conversations with Tsai were not subject to the state’s public records act because they focused on political conduct, not official city business.
“It should have been, for the most part, only political stuff,” he said.
The screenshots show Quintero worked with Tsai on a potential ballot initiative related to retail cannabis and discussed setting up a political action committee to raise funds and conduct polling.
“Alma has told all the applicants they need to help, but they’re just not helping,” Tsai wrote to Quintero in an iMessage. “She’s stressed that this is an attack on the industry. But she can’t make everyone do a PAC.”
Quintero wrote back: “We need someone to lead the PAC. I’ll talk with a friend. Once we set it up, we will do outreach to get funding.”
Aviles, the open government attorney, disagreed that Quintero’s messages would be exempt.
“His job is to represent the citizens. If he is working with citizens, to advise them to form PACs, to start initiatives, it is all public record,” Aviles said. “His job as part of the council is to regulate cannabis in the city, there is no distinction.”
Quintero did not recall asking Tsai to use Signal. He openly shared his thoughts on cannabis with anyone who asked at the time, he said.
“I was very open about supporting cannabis and the process,” Quintero said. “If they were going to try to get it approved, they were going to need to go through an initiative. We needed to know if there was support from the community.”
A competing initiative qualified for the ballot before Tsai’s initiative came to fruition. The City Council, including Quintero, adopted that initiative outright in December 2019, instead of asking voters to decide. The ordinance was intentionally set up in such a way that council members could not choose the winners and losers, Quintero said.
Ancona, who took Quintero’s seat the following year, alleges proponents timed the council’s vote to coincide with the holiday season, when public engagement is typically lower.
“They wanted the avoid the amount of public input and backlash we received in 2018 when the medicinal cannabis ordinance was first proposed,” she said.
Lawsuit: Application process flawed
FEAH’s lawsuit accuses the city’s administration of misleading applicants. The applications originally were to be scored in their entirety by a third party, SCI Consulting Group, but the city changed the process — a month after the companies submitted their proposals — to have city employees score key portions, including the “community benefits” section.
The city’s attorneys argue the ordinance gave the city manager the discretion to change the process as needed. The city’s staff handled scoring where local knowledge made a difference, they stated in court filings.
Though SCI was supposed to tally both sides’ scores, the city once again took over at the last minute. It is unclear who in the city actually did that tallying, however. El Monte, in its filings, stated that the city’s community and economic development director, Betty Donavanik, combined the scores.
But in a separate deposition, a legal assistant — who is also the adult son of Martinez’s boyfriend — testified that he did the final calculations using Microsoft Excel. He was hired by the city attorney’s law firm, Olivarez Madruga Law Organization, after meeting founding partner Rick Olivarez at a dinner with his father. He was placed on the cannabis team almost immediately after his hiring, he testified.
The legal assistant did not participate in the actual scoring of the applications beyond merging the two sets of numbers at the end, he said.
Both Martinez and Pilchen declined to address questions about the hiring, or to explain why a legal assistant performed that function.
Scoring errors
At least two scoring errors have been uncovered since FEAH’s lawsuit was filed in 2020. In one, the third party hired to score portions of the applicants accidentally gave points to an applicant that had not properly completed a segment of the application. The applicant in question surrendered its license as a result and another company, just ahead of FEAH in the rankings, received it instead.
Dana Cohn, an attorney representing El Monte, accused FEAH of frantically “searching for any evidence that the application process was corrupt.” None of the mistakes identified would have changed FEAH’s score enough to move it to the sixth slot, according to Cohn.
“Over three years, it has found no such evidence,” Cohn wrote. “It is time for Petitioner to face the music. It has no evidence the City treated Petitioner differently, or that the review of any application was arbitrary or capricious.”
A hearing on the lawsuit is scheduled for Sept. 21. If successful, FEAH is asking the judge to either award an additional license or force a do-over.
Editor’s note: This article has been updated to clarify that, according to city officials, the outside law firm that investigated the selection process never produced a final report.
