People v. Gnass – Case Brief Summary (California)

In People v. Gnass (2002) 101 Cal.App.4th 1271, a city attorney was indicted for having had a financial interest in each of 10 contracts the city made in connection with the issuance of certain bonds.

The city attorney had also served as a private attorney for a technically separate joint powers agency that would need a "disclosure counsel"--a lawyer who evaluates risks and prepares a prospectus for potential investors. (Gnass, supra, 101 Cal.App.4th 1271, 1279-1282.)

The appellate court found these circumstances could support a finding that the attorney had a financial interest in the bond deal because he knew it was likely that he would later be retained to serve as disclosure counsel. (Id. at pp. 1282, 1288.)

In that case, one of the questions before the appellate court was whether the prosecution correctly instructed the grand jury on the mens rea element of the crime with which the defendant was charged. ( People v. Gnass, supra, 101 Cal. App. 4th at pp. 1305-1316.)

The Gnass court decided that that question could be raised on a motion under Penal Code section 995 because "a claim of instructional error is a cognizable basis for a motion to set aside an indictment under Penal Code section 995, subdivision (a)(1)(B), in that it is 'manifestly tantamount' to a claim the grand jury, as instructed, may have indicted the defendant on less than reasonable or probable cause." ( People v. Gnass, supra, 101 Cal. App. 4th at pp. 1306-1307.)

In sum:

A city attorney was indicted for having a financial interest in each of 10 contracts the city made in connection with the issuance of bonds.

The city attorney also served as private attorney for a technically separate joint powers agency. And the agency would need a "disclosure counsel"--a lawyer who evaluates risks and prepares a prospectus for potential investors. (See Gnass, supra, 101 Cal.App.4th at pp. 1279-1282.)

The appellate court noted that the city attorney's role in the whole bond deal was somewhat "unclear," but the basic idea of the indictment was that the city attorney had "used his position as the city attorney" to convince the separate joint powers agency that was also his client to enter into the bond contracts, knowing he would also do the work of a disclosure counsel. (Id. at pp. 1282, 1288.)