The Oakland Public Ethics Commission this month issued a fine of $309,600 against a former city building inspector accused of accepting bribes from property owners in exchange for greenlighting inspections or issuing permits. It is by far the largest fine ever issued by the commission.
Thomas Espinosa, the former specialty combination inspector in the city’s Planning and Building Department’s Code Enforcement Division, also convinced some property owners whose buildings he inspected to hire him as a contractor, the investigation by public ethics commission staff found.
None of the income was reported on a Form 700, or Statement of Economic Interests, which under state law must be filed by elected officials and public employees like Espinosa, who make or influence governmental decisions.
In all, Espinosa was found to have committed a jaw-dropping 47 violations of the Oakland Government Ethics Act, more than any previous case investigated by the Oakland PEC, which since 2014 has had authority to impose fines on city employees and elected officials for ethics violations.
Following the two-year investigation, a hearing officer recommended a fine of $210,000. The seven-member Public Ethics Commission at a Sept. 17 meeting, however, decided to increase the fine, citing “the intentional nature of the violations and the impact on public safety as a rationale for pursuing maximum fines,” according to a commission press release.
“This case is, by far, the most extensive and egregious activity ever investigated by the Public Ethics Commission,” Commission Chair Michael MacDonald said in a statement. “The evidence in this case showed a pattern of intentional behavior for personal gain at the expense of the City, property owners, and the public, justifying maximum-level penalties of $5,000 or up to three times the amount unlawfully received, for each violation.”
Earlier this year, the commission issued a fine of $55,000—$5,000 per 11 violations—against Anthony Harbaugh, a former city building inspector accused of assisting Espinosa in the permit-approval scheme.
The Espinosa investigation began in 2016, when managers in the planning and building department raised concerns over Espinosa’s behavior. Led by PEC Chief Inspector Milad Dalju, the two-year investigation found dozens of instances of Espinosa violating the city’s ethics rules.
Most of the violations are related to Espinosa arranging under-the-table deals with four property owners and convincing other property owners to hire him as an independent contractor or consultant. Espinosa also used his city vehicle and city computers, printers, and other resources for his personal contracting work. Other violations were related to conflicts of interest and misusing his city position.
In one instance, Espinosa told a real estate broker who was trying to sell a house to write him a $1,500 personal check. Espinosa then deposited the money into his bank account, and later went into the city’s planning and building computer system to waive building code violation fees.
In another example uncovered by PEC investigators, a West Oakland landlord paid Espinosa $176,000 to work as a contractor on her properties. In return, Espinosa ensured the properties reached compliance, improperly inspecting his own work. This conflict of interest and the income he received was never reported on his Form 700.
Espinosa also issued a “work-stop order” at a home being remodeled in the Oakland Hills in order to coerce the property owner to pay him $12,850 to clear up the enforcement case, investigators found.
After participating in interviews with PEC staff in June and July 2018, Espinosa fell off the map. For some time, PEC staff had trouble tracking him down after he moved and did not provide his new address. This year, he resurfaced and told PEC staff that he is suffering from memory loss due to failing health.
With the help of his brother-in-law, Espinosa spoke with PEC staff about attending his administrative hearing in April 2021. However, he was ultimately a no show. Then, at the June meeting of the Public Ethics Commission, Espinosa called in during public comment to address commissioners.
Espinosa said he had suffered a stroke, and sent PEC staff a letter from his doctor about his memory issues. “I told them time and time again, I have no memory of working anywhere,” Espinosa said at the meeting.
In response to concern from commissioners, the City Attorney’s Office later issued a legal memo, which said that the PEC’s role at that point was to establish penalties and not re-hear findings of fact. Espinosa, according to the memo, bears the burden of proving any claim of mental incapacity.
Commission staff asked Espinosa to send further information about his medical issues but, according to PEC Executive Director Whitney Barazoto, he did not provide additional documents in advance of the posting of the Sept. 17 meeting agenda.
Espinosa, who was hired by the city in 2005, left his job in 2016 after he was interviewed by PEC investigators. His troubles extend beyond the PEC investigation. He reportedly is under investigation by the FBI.
In 2018, a large cannabis real estate company he was operating on the side crumbled. His business partners sued him, alleging he defrauded them out of millions of dollars. That same year, he filed for bankruptcy.
