Councilwoman’s husband held Facebook stock when she voted on company’s expansion

Facebook's headquarters in Menlo Park and Councilwoman Catherine Carlton
Facebook's headquarters in Menlo Park and Councilwoman Catherine Carlton

BY EMILY MIBACH
Daily Post Staff Writer

Menlo Park Councilwoman Catherine Carlton’s husband owned stock in Facebook when she voted in favor of the company’s expansion along Constitution Drive but she said yesterday (April 27) she was unaware of the investment.

Carlton said she discovered last month that her husband held around $15,000 in Facebook stock. The council unanimously approved the company’s 1 million-square-foot expansion on Nov. 1.

Carlton says she found out while filling out her Form 700 — a document wherein elected officials must disclose their economic interests.

“My husband and I gave clear instructions to his financial advisor not to buy any stock related to Menlo Park,” Carlton said in an email. “I had no reason to think that he would act differently and am very upset that he made this mistake!”

Carlton said the stock was held in her husband’s separate retirement account. The stock was acquired on Sept. 14, 2016, according to her Form 700.

Carlton said she and her husband checked in with their financial advisor about once a year during tax season. Upon finding out about the stock holdings, Carlton said she told the financial advisor to sell the stock, informed City Attorney Bill McClure about the issue and reported the incident to the Fair Political Practices Commission (FPPC).

Since then, Carlton has not participated in any other Facebook discussions. This is also related to the fact that a company she consulted for last year did business with Facebook.

McClure said no votes need to be redone regarding the Facebook expansion, which is currently under construction. This is because Carlton did not know her family held stocks in the company, he said.

If council members know they hold stocks in companies that come before the council, they are supposed to recuse themselves. If non-recusals are submitted to the FPPC, it’s possible the council member could be fined.

Last May, late Belmont Councilman Eric Reed was fined $2,000 for not disclosing that he had owned AT&T stock and voted against the utility company’s antenna project in his city.

6 Comments

  1. It’s hard to believe they didn’t know what their investments were. Wonder if she’s this careless when it comes to the city’s finances.

  2. Whether she owned the stock or not, this council has been such a pushover for Facebook, giving them everything they’ve asked for and demanding very little in return. The M2 negotiations were a joke. Facebook isn’t doing anything about traffic other than funding a pie-in-the-sky Dumbarton Corridor study that will never result in anything. They’re not building anywhere as much housing as the demand they’re creating. And council is just smiling through all of this, attending ribbon-cuttings and pounding their chests about the handful of police positions that Facebook is funding, as if that was a big deal. These local yokels just aren’t capable of negotiating with a multi-billion-dollar concern like Facebook. And the residents are going to get steamrolled from the traffic and the stratospheric demand for housing.

  3. Cat and Kirsten Keith have missed a lot of council meetings, apparently due to overseas travel. Does anybody have attendance information on the council members? I’d like to see how their attendance record stacks up.

  4. I don’t know if she is telling the truth about not knowing about the Facebook stock, but it doesn’t matter since counsel seems to say “yes” to every developer who has a project in Menlo Park. Traffic is getting so bad that I’d like to replace these counsilers with people who will say “no” once in a while.

  5. Here’s the kicker. Let’s say the facts ultimately show Councilmember Carlton in the least favorable position: that she didn’t care or even knew of her spouse’s investment. Fact is, voting on this project is immaterial to her position in FB. It’s a de minimis investment as well. Yet the FPPC does not care.

    You see, the FPPC absolves itself of any determination of materiality or scienter by waving its hands and deeming any ownership of $10k or more in any publicly traded equity to be “material”, even if the vote an elected may make is noise to the valuation of that entity. You are treated the same as if you were the sole owner in Stinky’s Plumbing and awarded yourself exclusive rights to unclog Palo Alto drains.

    And thus the problem Ms. Carlton now faces. Someone will complain to the FPPC, not as a matter of public interest against corruption, but just to stick it to her for being a politician with whom the complainant disagrees. She will be fined, and it won’t be justice being served, but rather revenge, nice and cold at that.

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