Resignation aftermath: New details come to light after a departure in Arroyo Grande



Scandals, whether genuine or manufactured, have a way of shaking things up. Once hackles are raised and the spotlight is on, anything and everything is up for public scrutiny.

Recent events in Arroyo Grande certainly appear to support that theory. Ever since five police officers discovered City Manager Steve Adams and Community Development Director Teresa McClish at City Hall late at night on July 3, the entire city has been sucked into an ever-widening gyre of scandal and controversy.

Though that may sound melodramatic, the hundreds of angry residents who have packed the City Council chambers, the city police officers who have unanimously voted “no confidence” in Adams and Mayor Tony Ferrara, and, most recently, the resignation announcement from Adams on Oct. 2 stand as hard evidence that scandal has permeated Arroyo Grande.

“It’s not a good place, where we are right now,” Ferrara told New Times. “We need to fix it and get back on track.”

Much has been written about, spoken of, and speculated on regarding the July 3 events, but Adams’ resignation announcement and harsh words from the city’s Police Officers Association (AGPOA) have shifted the focus to more relevant questions: Why did this happen, and where does the city go from here?

A major piece of those questions promises to be answered by a new, independent investigation—approved by the council on Oct. 8—that will examine the totality of the incident and subsequent fallout before delivering a verdict in a public report.

City Councilman Jim Guthrie, one of the three people who selected Ventura-based investigator Chuck Hookstra to lead that effort, told New Times that the new investigation is essential.

“Even with Steve resigning, we are going to proceed with the investigation,” Guthrie said. “There are still a number of unanswered questions the public wants an answer for.”

As Guthrie explained, the council unanimously believed the initial, internal investigation by Deputy City Attorney Michael McMahon was sufficient, but a Sept. 18 letter from the AGPOA raised questions and doubts that necessitated a further investigation—at least in Guthrie’s mind.

The increased visibility and presence of the AGPOA as this scandal has spiraled and intensified is no coincidence, according to many in the city.

In Adams’ resignation letter—published in New Times on Oct. 2—he admitted that he has “failed to maintain a positive relationship with the POA” but also mentioned the AGPOA has retained an attorney whose former firm published a “playbook” advocating using “questionable tactics” like intimidation and “public ridicule” of prominent city staff to strengthen police union leverage during labor negotiations.

When asked by New Times why he chose to include that information in his resignation letter, Adams said it was important for the public to know.

“I want to be very clear—I’m not making any accusations against the POA—but since I’m leaving, that is important background information for the public to have about city labor relations,” Adams said. “I want to make sure I create a successful situation for my successor.”

Adams said that he and the AGPOA have been through some “tough times” in past years that have “created a strain on the relationship” but added he didn’t wish to comment beyond what he said in his resignation letter.

However, further investigation by New Times revealed that the AGPOA’s legal representative—who’s been the union’s chief labor negotiator for roughly the past three years—has a checkered legal background.

That representative—Westlake Village-based attorney Michael A. McGill—was a partner in the now-dissolved firm of Lackie, Dammeier, McGill, and Ethir. That firm has been the subject of at least two lawsuits—one of which alleges fraud and legal malpractice, the other of which alleges harassment, intimidation, and illegal tracking of two Costa Mesa City Council members.

McGill is explicitly named in a lawsuit filed on April 5, 2014, in the Sacramento branch of U.S. District Court. The plaintiff in that suit alleges that McGill “participated in the theft of pension funds from the LDF [legal defense fund]” as well as in the “management and operation” of an organization alleged to have violated RICO—the Racketeer Influenced and Corrupt Organizations Act.

According to Suzanne Spencer, one of the attorneys for the plaintiff in that suit, all parties reached a settlement in early September. Spencer said the terms of that settlement are confidential.

In the other suit, filed most recently on March 21, 2014, in Orange County Superior Court, McGill’s firm is accused of employing a private investigator who allegedly placed an illegal GPS tracking device on a Costa Mesa city councilman’s truck. That same investigator also allegedly falsely reported another city councilman as a drunk driver after tailing him from a bar—all during labor negotiations with the local POA, represented by McGill's firm at the time.

One of the attorneys for the plaintiff in that suit, Vince Finaldi, told New Times that the case against McGill’s firm is moving forward, though it’s currently mired in appeals that he feels are “delaying the inevitable.”

In addition, New Times obtained a copy of the “playbook” formerly hosted on the website of McGill’s firm. The playbook suggests that a POA “should be like a quiet giant in the position of ‘do as I ask and don’t piss me off,’” while also listing “storm city council,” “public ridicule,” and “focus[ing] on an individual” as tools for forcing “decision makers into giving in to your position.”

McGill and AGPOA President Shawn Cosgrove did not respond to multiple requests for comment from New Times.

In the unsigned Sept. 18 letter criticizing Adams and Ferrara, however, the AGPOA wrote that, “there have been insinuations that our association’s contract negotiation process is to blame for this incident occurring.

“Nothing could be further from the truth,” the letter continues. “Any attempts to blame our involved police officers or our association, is [sic] irresponsible and offensive.”

When asked by New Times if McGill’s involvement had anything to do with the intensity of the backlash against Adams, responses from Arroyo Grande City Council members varied.

Council members Tim Brown and Kristen Barneich, as well as Mayor Tony Ferrara, declined to comment, citing a desire to tamp down divisiveness in the city.

“I’m not going to speculate if this was Mr. McGill’s doing,” Councilman Guthrie said. “There has been some history with this attorney, but I don’t think there’s anything to specifically suggest the POA did something to attack Steve.”

“I’ve heard a lot about this ‘playbook,’ but I’ve never seen it,” said Councilman Joe Costello. “That said, it’s completely inappropriate to use those negotiating tactics Adams mentioned.”

Costello said he’s also heard from residents supportive of Adams who have been “scared away” from recent council meetings by the large police presence and their vociferous supporters in black shirts.

“That’s astounding, and we have to fix that,” Costello added.

The tension between the AGPOA and the city is somewhat moot—since Adams has formally announced his resignation, and the most recent AGPOA labor agreement—which had been under negotiation since June—was finalized on Sept. 23.

However, all of the council members who spoke with New Times said the city’s relationship with the AGPOA must be mended if the city wants to move forward.

“I don’t think either side has communicated very well,” Ferrara said. “As much as I hate to lose Steve, I can’t fault him for his decision. I don’t know if many of us could have endured the kind of confrontational criticism he’s received.”

“I’m cooperating fully with the investigation that’s going forward, and I will continue to work hard for Arroyo Grande,” Adams said. “With the resignation, my intent is to make things less divisive.”


Contact Staff Writer Rhys Heyden at [email protected].

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