Some of the eastern Coachella Valley’s most prominent politicians quietly explored an idea last year to turn the city of Coachella into a major grower and supplier of medical marijuana in California.
The idea originated with Rancho Mirage City Councilman Scott Hines, a political consultant whose clients have included a medical marijuana provider.
Among those involved in meetings or correspondence on the plan in the summer of 2010 were Coachella Mayor Eduardo Garcia; Mayor Pro Tem Steven Hernandez; and Greg Cervantes, district director for state Assemblyman V. Manuel Pérez, a Democrat from Coachella.
In one email obtained by The Desert Sun, Hines referred to those involved in the discussions as “Team Coachella.”
But Garcia and Hernandez told The Desert Sun they only listened to Hines’ plan, never expressed support for it and walked away from the idea when a poll they say Hines commissioned affirmed there was little support among the city’s 40,000 residents for an industrial-scale marijuana operation.
Cervantes said he had no involvement in the discussions, didn’t recall the plan, and doesn’t know why he was included in an email chain on the topic from Hines.
The survey’s findings — and the entire evaluation of the potential for medical marijuana production and sale in Coachella — were never made public.
Results were never shared with city staff members or the rest of the city council, Coachella City Manager David Garcia — no relation to the mayor — and council member Gilbert Ramirez confirmed.
The existence of Team Coachella and the discussions of its participants have emerged from a continuing Desert Sun investigation into the valley’s taxi operations, an issue that has little to do with medical marijuana.
One of the Team Coachella members was Greg Klibanov, then co-manager of American Cab, according to the taxi company’s attorney, J. Scott Russo.
Klibanov paid a Newport Beach political polling firm $10,000 to conduct the Coachella survey.
At the time, Mayor Garcia was vice chairman of the SunLine Services Group board, which regulates taxi service locally.
And American Cab had significant business before the board at that time, including whether it would receive any taxi permits that became available as Classic Yellow Cab departed the desert in early September 2010.
“Based on Mayor Garcia’s influence and power over American Cab, Mr. Klibanov paid $10,000 to fund Mayor Garcia’s survey,” Russo wrote in a Nov. 9 letter to SunLine.
Garcia is now the SunLine board’s chairman and the board is considering whether to approve American Cab’s ownership change. Without the approval, the company would have to shut down its operation.
Russo is asking Garcia to recuse himself from the discussion and vote.
Garcia said Russo’s version of events is “very different” from what actually occurred.
He said he and Hernandez heard Hines’ pitch on Coachella and medical marijuana “as we would take a meeting with anyone interested in bringing business opportunities to the city.”
Garcia said he and Hernandez were skeptical of the idea and were concerned about how city residents would react to it.
But in a July 2010 email from Hines to Team Coachella about how the survey was progressing, Garcia responded: “This works for me Scott! Thank you.”
Both Garcia and Hernandez said they never met Klibanov until he appeared with Hines at a meeting in August 2010, where the unfavorable survey results were shared and the marijuana plan was dropped.
Russo’s allegations now are “really an attempt to intimidate me and to try to silence a voice of concern” about American Cab’s change of ownership request, Garcia said.
Garcia said he’s sought the legal opinion of both SunLine’s and the city’s attorneys, and does not intend to recuse himself as SunLine again takes up American Cab’s ownership change at its Dec. 7 meeting.
“It’s not appropriate for Scott Russo and American Cab to try to intimidate an elected official, and make up a scenario that’s intended to try to sway an outcome that’s before the board in a couple of weeks,” he said.
Hearing the pitch
As they met over a meal at the Agua Caliente casino in June 2010, Garcia and Hernandez say they heard a surprising suggestion from Hines: they should consider making their city the valley’s headquarters for the cultivation and dispensing of medical marijuana.
Hines, a well-connected Democratic political consultant, had been forced to recuse himself from discussions on the Rancho Mirage City Council about licensing marijuana dispensaries because he had consulted for a client in the medical marijuana business.
Hernandez recalled that Hines proposed using Coachella’s existing agricultural infrastructure as a natural base for large-scale marijuana production and sales.
“He was talking about potentially making the city a grower,” Hernandez said. “What would be grown out of these packing sheds would be distributed to other collectives throughout the cities and throughout the state.”
Medical marijuana is legal under state law in California and generates as much as $1.3 billion in sales a year, generating up to $105 million in taxes for the state.
But pot’s legal status in the California has never sat well with federal law enforcement authorities, and their opposition has recently intensified.
Federal prosecutors in September sent letters to a number of California marijuana growers and dispensaries, ordering them to close down or face civil or criminal charges and potential seizure of lands.
Coachella had passed an ordinance prohibiting medical marijuana dispensaries in March 2009.
But in the 15 months afterward, several court cases had gone in favor of dispensaries. And a statewide ballot initiative to legalize marijuana use was on the November 2010 ballot.
Hines’ 2010 statement of economic interest, a form filed with the city of Rancho Mirage to outline potential for conflict of interest, indicates that one of his clients from which he derived an income of greater than $10,000 in 2009 was AmbuServe, a Gardena-based ambulance company.
AmbuServe is owned by Klibanov’s wife, according to Russo, the American Cab attorney.
In his letter to SunLine, Russo included a photocopy of a canceled check from AmbuServe Inc. in the amount of $10,000, payable to Probolsky Research LLC, a Newport Beach company that specializes in public opinion research.
Written into the memo portion of the check is “City of Coachella voter survey.”
Hines called Klibanov a “previous client and friend” who like many entrepreneurs in 2010 “was exploring whether (medical marijuana) would be an emerging industry.”
Hines, however, presented himself as a representative of American Cab before the SunLine board in September 2010.
Hines said he represented American Cab “for a brief period last fall and into the winter,” but hasn’t worked with them since.
Commissioning a poll
Hines called the meetings about medical marijuana in Coachella “really just a matter of letting people network with each other.”
But Hernandez remembered Hines as an impassioned advocate, not just a facilitator.
“He was saying, ‘This is a great opportunity and if the industry takes off, it’s going to be just like tobacco; there’s going to be huge opportunities for cities to make revenue,’” Hernandez said.
Recalled Hines: “I made an introduction between Greg (Klibanov) and Eddie (Garcia) and Steve (Hernandez) initially, because there seemed to be some mutual interest in at least exploring it.”
Hines said he does not remember who specifically came up with the idea of doing a poll in Coachella.
“I don’t remember if Steve or Eddie came up with it, or Greg did,” he said. “I’m not sure I can clarify that. I’m not dodging it. It was kind of a collective conversation. But it was a cost-effective way to gauge public direction.”
When asked if all of Garcia’s and Hernandez’s dealings were with Hines alone until the August meeting where the poll results were shared and Klibanov was present, as the Coachella officials told The Desert Sun, Hines said, “That sounds right.” He said it was possible they didn’t know Klibanov was involved until that time.
At no time in his conversations with Garcia, Hernandez or Klibanov “did the issue of SunLine or taxi cabs ever come up,” Hines said.
“There was never a discussion of any kind of quid pro quo, either implicitly or explicitly, that I was ever a part of,” he said.
‘Inference could be there’
But Russo, American Cab’s attorney, said openly discussing such an arrangement wouldn’t have been necessary.
“Given the positions people held, the inference could be there,” he said.
Garcia, however, said it wasn’t known by SunLine officials that Klibanov had become an American Cab representative until mid-to-late September 2010, after the marijuana proposal was explored and dropped. American Cab’s registered owners, A.J. Saini and family, became embroiled in a legal dispute over ownership of the company with Klibanov in 2010 that was ultimately settled the following spring.
Klibanov reportedly left American Cab in November 2010, according to company officials.
Russo disputed that Garcia didn’t know of Klibanov’s affiliation with American Cab.
“From the end of 2009 until about October 2010, Klibanov was the face of American Cab to SunLine,” he said. “He was the only person who SunLine dealt with and he represented American Cab at the monthly franchisee meetings.”
Klibanov did not return messages left by The Desert Sun. But Russo provided copies of emails discussing the run-up to the Coachella survey.
In a July 6, 2010, email from Hines, whose recipients included Garcia, Hernandez, Klibanov and Cervantes, Hines wrote:
“Team Coachella, please look at the attached survey and let me know if you approve. If you have a suggestion or change of some kind, please email me back by the end of the day on Wednesday. If you are good with this, please send me an ‘approve.’ We would like to initiate the survey on Thursday. Thanks so much.”
In another email dated July 15, 2010, Hines said that disconnected phone numbers and a large number of Spanish-speakers in Coachella were causing delays in completing the survey. The email’s recipients included Garcia, Hernandez and Klibanov.
Cervantes said he didn’t remember ever receiving or reading Hines’ email, and doesn’t know why he was copied on it.
He said he had no involvement in discussions of bringing medical marijuana operations to Coachella, and that he opposes any such plan.
“I get anywhere from 80 to 100 emails a day from all over the district,” he said.
“This was probably an item that didn’t even cross my mind, knowing what I know about the mayor and the city council’s opinion on medical marijuana. I would have known it wasn’t going anywhere.”
Garcia emphasized that the idea to make Coachella a medical marijuana powerhouse came from Hines.
He and Hernandez said they made it clear they were opposed.
“In an effort to sway our position on this matter, a poll was conducted,” Garcia said. “At the end of the day, the poll reflected exactly what we thought.”
Hines said he’s dismayed by what’s transpiring now between American Cab and Garcia related to the Coachella marijuana discussion.
“It’s a shame that’s what this has devolved into,” he said. “But at the time it was just goodwill, collaboration and an idea.”
Keith Matheny is an investigative reporter for The Desert Sun. He can be reached at [email protected] or (760) 778-4693. Follow on Twitter @keithmatheny