Former San Mateo County Community College District chancellor Ron Galatolo speaks out

“I am truly innocent and (District Attorney Steve Wagstaffe) knows that,” Galatolo said, citing “exculpatory evidence” he has seen through the disclosure of phone call and video interviews conducted by prosecutors and investigators.

“There was no crime,” Galatolo said. “There was no corruption. ... If the DA believes this case centers around me as a corrupt public official, then I would urge them to follow the money. There is none.”

Smith made the same assertion.

“Fundamentally, in a case such as this, the prosecutors love to say, follow the money, and ... when you read about this in the paper and you read about my client being blasted as a corrupt person, you would expect that there would be some evidence that he got kickbacks from these companies that got the contracts to build these magnificent facilities in the colleges he oversaw,” Smith said. “Not one dime have I seen ever was paid to my client, as a kickback, as a payment, as some kind of greasing someone’s palm to get the contract. Nor have I seen any evidence that any of the work that was done on any of the beautiful projects that my client oversaw in the community college district was at an inflated cost, cost more than it should have cost, in terms of the right people to do the job. I’ve seen nothing like that.”

Wagstaffe offered a different perspective on the case, stating that his office wouldn’t bring forward charges unless it felt confident evidence was strong. The investigation and accusations of wrongdoing began in 2019, when former Vice Chancellor Eugene Whitlock filed a whistleblower complaint alleging a laundry list of misconduct by Galatolo. Whitlock declined to comment for this story, citing the ongoing investigation and legal proceedings.

Since then, Wagstaffe said dozens of search warrants have been issued which he said have brought to light more damning evidence against Galatolo. The mounting documents and evidence, he said, is what prolonged the investigation. Ultimately, the investigation led to the filing in 2022 of a criminal complaint by Wagstaffe against Galatolo.

“I wouldn’t approve the charging of this case unless I believed we could prove this case beyond a reasonable doubt,” Wagstaffe said. “This one here, we went over this very, very carefully beginning to end. That doesn’t mean I’ll guarantee [a conviction.] Only a fool would guarantee in our jury system but I do believe we have a strong case.”

The charges

The complaint contains 21 charges, 17 of which stem from allegations Galatolo directed contracts to favored firms with which he had a financial interest and from whose principals he received gifts. Interrelated to those charges is the allegation that by failing to report these gifts on state-required financial disclosure documents, Galatolo committed perjury.

Specifically, there are two counts of unauthorized use of public funds for directing the awarding of two projects at Cañada College to two firms with whom he had an improper relationship — a solar installation project to Allana, Buick and Bers (ABB), and Building 23, a new Science and Technology facility, to McCarthy Builders; six counts of being “financially interested in a contract made by him in his official capacity,” all related to contracts awarded to ABB from January 2014 through March 2019; and nine counts of perjury for failing to disclose gifts from principals at ABB on the state-required Statement of Economic Interests, known as Form 700, from 2011 through 2020.

Galatolo vigorously denied directing contracts to anyone.

He said the case of illegal contracting practices rests solely on “false statements” from Karen Powell, the college district’s former executive director of Facilities Planning and Operations, that Galatolo placed undue influence on the committee of district personnel that would review contract bids. It was a standard practice for a committee to be appointed to recommend bid awards. Galatolo was not on those committees. Powell declined to comment for this story.

“I’ve listened to every interview the DA has provided through discovery and not one person who was on the (contract) selection committees corroborates Karen’s erroneous allegations that I either directed or was involved in the selection of McCarthy for Building 23, or ABB, who was awarded the solar project,” Galatolo said. “I consciously kept an unambiguous arm’s length from any decision-making throughout the entire selection process. I never directed ... any staff nor attempted to guide the Board of Trustees on who to select and ultimately approve.”

Galatolo said substantial contracts were awarded to firms bidding against ABB and McCarthy and that the two won contracts when they successfully followed the bid process and submitted low bids.

“In those instances, there was no interference from me whatsoever nor any attempt by me to alter a decision,” Galatolo said.

Friendships or business relationships?

But Wagstaffe said signs of interference were present. In some instances, it appeared some firms with close relationships to Galatolo were allowed to modify their bids after filing deadlines, coming in substantially below competitors despite their initial bids being on the higher end.

Regarding the allegations of a financial interest in ABB, Galatolo said, “I have no financial interest in ABB nor have I received one dime of compensation or other form of payment from them.”

What he had, Galatolo said, was a friendship, in particular, with Karim Allana, the chief executive officer of ABB. Allana confirmed Galatolo’s characterization of their relationship in a press release this April, describing the accusations as “designed to be salacious and grab headlines.”

Galatolo confirmed that he went to sports events, had expensive meals and traveled extensively with Allana. Often, Allana paid for the tickets, airfare upgrades and meals.

Galatolo said he was meticulous in reciprocating — providing something of equal or greater value. If Allana paid for dinner, Galatolo would buy him a bottle of wine of equal or greater value, he said. If Allana provided an upgraded airline seat for a trip they were taking together, Galatolo said he would pay for Allana’s hotel stay for a week, he said.

Under the rules governing Form 700s, overseen by the state Fair Political Practices Commission, a gift is not required to be reported if there is a reciprocal gift of equal or greater value.

“These are good friends. These are friends I shared my home with, these are friends I traveled with, these are friends I broke bread with. It wasn’t just an informal hey, let’s go out to lunch because we want to develop rapport. These are good friends,” Galatolo said. “Friendships exist, I know it’s hard for the DA to have friends, but not for chancellors. Chancellors have friends. DAs probably don’t. That’s why he probably can’t relate to this. And, as friends, we do all the common things that friends do together. And so, when we did these things, I knew in my heart it would not influence. I did not have influence. I had a committee that made decisions, I had a facilities director who made decisions and never did I interfere and say this is who I want to do the work. The friends I had — we shared. We shared everything with one another.”

‘A political corruption case’

However, Wagstaffe said Galatolo had a habit of leaving large ticket items off of his disclosure forms and, paired with other findings, those omissions raised questions around criminal behavior that he said shouldn’t be left unchecked.

“When people make mistakes, that happens all the time and it’s understandable. It’s not easy to know exactly what you need to report,” Wagstaffe said. “If that was all we found in this case, if there was no violation of any law other than form 700, it would be a different story. But it wasn’t once or twice. There was a whole bunch [of misfiled 700 forms]. … You don’t give a break to what you view as criminal behavior. This is absolutely, we believe, a political corruption case.”

Asked if he should have been more sensitive, as a prominent public official, to the appearances surrounding these exchanges with friends, Galatolo said, “Yes, in retrospect, you might have something. In retrospect. But, what do you do, then, with friends? ... When they sit there and say, ‘Hey, let’s go to a ball game together’ do I say, no, I can’t do it because it’s got a little bit in the public eye? You know how you do it? You do it by reciprocating. You say, OK, let me take you to dinner then. Let me do this for you. ... I never saw them as gifts to me. If you’re buying stuff for your friends and they’re buying stuff for you, that’s exactly what the FPPC recognizes. They recognize friendships exist, it just has to be reciprocal.”

The perjury counts stemming from the accusations Galatolo failed to report the gifts on his Form 700 also may be legally flawed, Smith said.

Filing insufficient information on a Form 700 is a misdemeanor and the statute of limitations is one year. Perjury is a felony and the statute of limitations is three years from when the conduct was discovered.

Smith said the Form 700 violations are misdemeanors and that the statute of limitations has long expired. The perjury charges are an attempt to “bootstrap” the expired misdemeanors into felonies, and he said he will challenge all nine of those counts in court.

While not admitting to violating the Form 700 regulations, “we strongly believe none of those counts will survive,” Smith said.

Gifts

Among the gifts Galatolo is alleged to have received is free consulting work from ABB employees on a solar project at his residence in Maui and a drainage system at a residence in Lake Tahoe.

In both instances, Galatolo said he hired other firms to do the work at his properties and the ABB staff only provided some informal reassurances that the work was being done properly.

“They did no work, they did no inspection, they didn’t rule on it, they didn’t accept it,” Galatolo said.

“One of the other elements of unfairness in this case is the way Ron has been portrayed as living this lavish lifestyle and the way it is portrayed is by doing illegal things,” Smith said.

“Ron Galatolo made his money that allowed him to live the lifestyle that we’re talking about — a place in Maui, a place in Tahoe, a place in Paris — not by being a community college chancellor benefiting his community, but in real estate, like a lot of people in the Bay Area, simply buying and selling properties, and benefiting from the extraordinary appreciation in real estate values over the last half-century in the Bay Area. So, the way he’s portrayed and the subtle underpinnings of all of this is: ‘Look at this son of a b— who is living this unbelievable lifestyle because he’s involved in graft and corruption and taking money on the side, lining his pockets with public funds.’ It’s false. It’s simply not true.”

Other counts

The remaining four counts in the 21-count complaint allege Galatolo filed false tax returns in 2018 when he fraudulently took credit for a $10,000 donation made by the community college foundation to Santa Rosa Junior College student, faculty and staff recovering from the Tubbs Fire; and that he committed perjury for falsely stating the purchase price of a 1963 Corvette at $2,500 and the purchase price of a 2006 Chevy SSR at $1,000.

Smith said the claim of a $10,000 donation “simply was a mistake.” Galatolo said he received a letter thanking him directly for the contribution, he filed it with other documents in preparation for filing his tax returns and mistakenly claimed the donation when he did his taxes.

“I probably should have spent a little more time looking at that donation versus other donations,” Galatolo said.

The purchase prices for the two vehicles were as he reported them to the Department of Motor Vehicles. He bought the 1963 Corvette sight unseen and it was inoperable when it was delivered. He never got it running, Galatolo said.

The Chevy SSR was purchased as part of a $25,000 contract he paid for work at his brother’s ranch near Placerville, including clearing the property and installing a new irrigation system. The work performed cost $24,000 and he bought the Chevy from the contractor, a longtime friend Galatolo called “a second father to me,” for an additional $1,000.

Galatolo confirmed he had been willing early in the investigation to plead to a misdemeanor related to the DMV issues, but that prosecutors wanted him to plead to a felony. He refused.

“I said to my attorneys, ‘I’m innocent of all the work-related stuff. ... I have valid reasons why the DMV thing is the way it is. But if they want to get a win and they want to try to get me with a misdemeanor, then I’ll be more than willing to talk about that.’ But I told them, ‘Are you asking me to plead to a felony that I think I’m innocent of?’ ... and I said, ‘Then there’s no plea deal. There’s no plea deal to make here when I know I’m innocent.’ I made it very clear to them I am not going to plead to something I am innocent of.”

That moment passed, and both Galatolo and Smith said no plea deal is being sought. Wagstaffe said a plea deal for a misdemeanor was never on the table and that strong exculpatory evidence would need to be brought forward to persuade his team to consider making a deal.

“What we want in our public officials and that includes me, everybody in these decision-making positions, is that they’re pristinely clean, there’s nothing wrong with taking gifts from friends but if we believe there’s quid pro quo that’s when we charge a case,” Wagstaffe said.

Origin of accusations

The accusations, now approaching five years since they were first made, began with the original whistleblower complaint filed by Whitlock, whom Galatolo called a “bad guy. ... I terminated him because he was a perpetual liar.” Fired by Galatolo, Whitlock went to the district attorney and “told him a ton of lies,” Galatolo said. “I think he went in with, like, 70,000 pieces of documentation just to overwhelm (the DA). ... So here comes the first press release from Wagstaffe, just guns a-blazing. ... He came out and got way ahead of his skis.”

Added Smith: “If any of these incidents that Eugene Whitlock was supposedly a whistleblower on — if a $10 bill had wrongly gone to Ron Galatolo, you would have heard about it. No such evidence exists. They have exhausted years in trying to follow the money, yet there is no money to follow. What they’ve come up with instead is this hokey theory that when he goes to dinner with one of the contractors and the contractor buys dinner but Ron puts $200 of wine down there, oh my goodness, that’s not reciprocal, that should have been disclosed, that should have been listed. Come on. That’s not graft. That’s not corruption.”

Wagstaffe noted many of the charges brought against Galatolo had nothing to do with the accusations made by Whitlock.

Adding to the atmosphere has been the termination of Galatolo’s consulting contract with the district, entered into after he was ousted as chancellor, and related comments by senior district Trustee Richard Holober and then-Trustees Dave Mandelkern and Maurice Goodman that they knew nothing about Galatolo’s personal relationship with some contractors.

A news release issued by the district in February 2020 announcing the termination of Galatolo’s contract included several assertions that Galatolo’s personal relationships with some contractors “were not disclosed to the board.”

The comments by trustees reflect long-simmering resentments, Galatolo said. Holober openly acknowledged during a successful re-election campaign in 2018 that he would have Galatolo removed as chancellor, Galatolo said. In the same election, Galatolo actively campaigned for Holober’s opponent, Tom Mohr.

Ultimately, Holober, Goodman and Mandelkern, voted to remove Galatolo. Initially, under a separation agreement, the board hired Galatolo as a consultant to work toward creating a four-year state college at one of the district’s campuses. They subsequently terminated the agreement — Galatolo says unlawfully — as the corruption investigation continued.

“Let me be really clear with you, OK?,” Galatolo said. “They said, because they’re political motherf—ers and they want to protect themselves, they said they didn’t have knowledge of these relationships. I’m telling you, they knew.”

Holober, Mandelkern and Goodman went to sports events and social events with the contractors with whom Galatolo claims friendship, including Allan and Brian Bothman of Robert A. Bothman Construction, Galatolo said, adding that he also was at these events and his relationship with the contractors was clearly evident. Holober and Mandelkern did not respond to requests for comment.

Goodman acknowledged that he’d gone to at least one sporting event and reported attending on his Form 700s which he said is why he was accused of wrongdoing. As for the extent to which the board knew of Galatolo’s close relationships with vendors, Goodman said they may have understood there were friendships there but at no point did they or he understand those relationships to be inappropriate.

“Being friends with people is not illegal but that’s not what he’s being accused of. What he’s being accused of is abusing his power and going beyond having friendships and hanging out with people,” Goodman said, standing by his decision to vote for not renewing Galatolo’s contract. “The board does bear some responsibility for the fact that this was allowed for so long. He was a chancellor for 19 years.”

Civil suit, day in court

The corruption allegations gained even wider circulation when a civil suit was filed on behalf of the college district by famed attorney Joe Cotchett claiming that the contractors and Galatolo engaged in a “pay to play stealing of public funds.”

Smith called the accusations “demonstrably false. ... Again, it’’s what inflames the public. ... They just love to portray him as “This guy’s a rich guy based upon working for the public.’ It’s just false. It’s not true.”

Galatolo said he is looking forward to his day in court. The parties are expected to be in court July 31 to set the date for the preliminary hearing, Wagstaffe said.

Because prosecutors issued a complaint, instead of an indictment, Galatolo is entitled to a preliminary hearing at which a judge can rule if there is sufficient evidence to bind him over for trial. There have been several postponements of the preliminary hearing, largely at the request of the District Attorney’s Office.

“If they believe going to a basketball game with my closest friend is a felonious crime, then I am ready, willing and able to defend myself in front of 12 unbiased, non-politically motivated jurors,” Galatolo said. “I was a successful businessman and investor who had acquired wealth through hard work even becoming chancellor. I had absolutely no motive to commit the financial crimes with which I’m being charged.”

marksimon@smdailyjournal.com

sierra@smdailyjournal.com 

(650) 344-5200 ext. 106