Danville Express

Cover Story - January 26, 2007

What a Guy

The art of governing grabs Guy Houston, propels him to state Assembly

by Jordan M. Doronila

Morning arrived in America when Ronald Reagan became president, so Republicans believe, with Guy Houston - now a California Assemblyman - being among the fervent enthusiasts.

Though scandals, tragedies and turmoil darkened the nation in the 1960s and 1970s, Reagan brought confidence and strength back to the United States, Houston said.

Inspired, he joined Reagan's U.S. Presidential Campaign in 1980 when he was studying at St. Mary's College in Moraga.

"Ronald Reagan for me is the man," said Houston, 46. "He made us feel good. His economic policy ushered in a long era of prosperity in this country."

Now, more than 26 years since his involvement in Reagan's campaign, Houston starts his third term as state Assemblyman for District 15, which includes Danville, San Ramon and Pleasanton. He coasted to his re-election victory by a margin of more than 10,000 votes, 54 percent, against Danville Democrat Terry Coleman in November.

This year, he plans to push a slew of new legislative bills in the Assembly, continuing to help bring equalization money to schools in the San Ramon Valley Unified School District and improving transportation in the San Ramon Valley.

"I found him very responsive," said Danville Town Councilwoman Candace Andersen, who has also been involved in Parent Teacher Association legislation in the school district. "I've appreciated some of the work he has done with the schools."

His new bills also include steroid testing for high school athletes, installing median barriers on Vasco Road in Brentwood and Livermore, and creating a market-based emissions system, which allows companies to buy and sell emissions credits.

"It's all about transportation and education," he said, about the needs in his district. "We have been focusing on these areas."

Moreover, he plans on submitting a bill to find ways for more speech therapy slots and programs at colleges, which would help special education.

In addition to his legislative goals, he has his eye on running for the state Senate or U.S. Congress. And he is also dealing with a civil lawsuit involving an alleged pyramid scheme, which was filed against him and his father Fred more than two years ago.

'Howdy Doody' rides in from Pleasanton

"It's a term of endearment," Houston said of his nickname Howdy Doody, which came from his college years due to his red hair.

Houston was born in Walnut Creek and grew up in Pleasanton. He went to San Ramon Valley High School, where his father was football coach.

"It was a lot different in character," he said about Danville now and then. "The population wasn't there."

He played football as a quarterback in 1978 for the Wolves. By playing football under his dad, he learned about tradition, respect and pride, and especially about revering the institutions that govern the country, he said.

Houston has kept an article about the Wolves beating another high school 19 to 12, with a close-up of himself with a football helmet, and it is hanging on the wall at his Sacramento office.

He is also good friends with legendary Oakland Raiders coach John Madden and his sons. Houston said his father Fred and Madden enjoyed talking football with each other.

Upon graduating San Ramon, Houston entered St. Mary's College, and received his bachelors and masters in business administration.

"I enjoyed being close to home," he said. "It's a beautiful campus."

While he was at St. Mary's during the late 1970s, the nation was undergoing a tumultuous time after the Vietnam War, the assassination of President John F. Kennedy, an economic downturn and the Watergate scandal, he said.

"We didn't feel good about being American," he said.

When former California Gov. Reagan ran for president, Houston said he saw a leader that made America feel proud.

"He spoke to you," Houston said. "He didn't waffle. He stood up. He made us feel good about being American."

"He stood for lower taxes," he added.

Houston became involved in Reagan's presidential campaign as well as several other Republican campaigns, such the re-election bid of former U.S. Rep. Bill Baker, who represented District 10 until he was defeated by Ellen Tauscher.

"You latch onto somebody," Houston noted.

Getting his start in Dublin

Houston went into the real estate business and moved to a house in Dublin because it only cost $89,000, he said. There was affordable housing in Dublin, and he wanted to live close to his family in Pleasanton.

When he moved to Dublin, the City Council, city staff and county officials had plans to expand the community by attracting more businesses, to be part of the growth in the area in the early 1990s.

Houston became involved in Dublin politics when he pushed for an initiative to have the mayor be an elected position, as opposed to rotated among the City Council members.

The residents voted to approve the initiative, he said.

"I thought it was fair," he said. "I think it's a better system."

Shortly afterward, he was elected to the City Council and then was elected mayor in 1994.

His 12 years of experience working on political campaigns gave him the motivation and knowledge to run for an elected position.

"I knocked on doors and met people," he said. "I didn't try to sell them something or convert them."

"You gotta get your message out," he added. "It's shoe leather walking to precincts."

He also said he was not afraid to ask for money from potential donors, whether it be residents or business, to fund his campaigns.

"I wasn't shy," he said. "If you don't ask people, you're not going to get any money."

When he became mayor, he said Dublin's agenda was to double the population with more jobs and economic development. Houston, the council and city staff worked together to accomplish this vision.

During Houston's tenure, the city created an economic development director position to entice companies.

"Dublin had been a bedroom community," said Dublin's current mayor, Janet Lockhart, a Democrat. "I could see that he had a wonderful vision. His vision was to see Dublin grow, to see business in our communities."

"It was easy to share in his vision," she added.

City Manager Richard Ambrose said Houston, along with the council and staff, brought in computer technologies, such as Sybase Inc., and retail outlets. Additionally, Houston was instrumental in building Dublin's new library.

"Guy was great to work with," Ambrose said. "He had the ability to see the big picture. He was able to look at all things going on."

Moreover, Houston helped convince the city and companies to donate several hundreds of thousands of dollars for new technology for the city's schools, Ambrose said.

"He's always been a really good communicator," said Lockhart.

She recalled Houston telling Sybase owner John Chen, "I'd offer you a key to the city, but we don't lock our doors."

"Guy has never been bashful to (fulfill his) desire to lead," she said. "He wanted to lead the community."

Not all Dublin residents were happy about Houston's mayoral style. Some said his pro-growth vision went too far at times and threatened areas designated for open space.

When Dublin Planning Commissioner and attorney Morgan D. King, David Bewley and John Anderson started authoring an initiative in 1998 to save open space in the Dublin's West Hills section, Houston did little to support the measure, said Bewley.

The initiative, Measure M, gave the residents the right to vote to approve or disapprove when the city decided to annex agricultural land for residential development, he said.

"Guy wasn't involved," Bewley said. "It wasn't his initiative. He wasn't active in our campaigns or the issues in the campaign."

"He certainly didn't help us," he said.

Measure M eventually received consensus. Residents and council members gave their support and approved it in 2000.

"Guy didn't get in the way of the process," Lockhart said. "He's just not the bad guy."

"Frankly, it doesn't ring a bell," Houston said. "I don't recall the details."

Bewley mentioned another situation where Houston and the City Council in 2001 allowed a developer to build homes on two residential lots on Brittany Lane with 13-foot setbacks, which was contrary to the city's plan of developing housing with 20-foot setbacks.

The developer successfully built one house with a 13-foot setback; however, the City Council a couple of years later rescinded its decision, which put a halt in constructing the second home with a 13-foot setback, Bewley said. He said the council publicly apologized in 2003 for its decision.

"I'm not running him down," said Bewley, who resides on Brittany Lane. "There's good development and bad development. It's just a matter of how it was done."

Onward to Sacramento

"He enjoys politics," Lockhart said. "He likes representing ideas and people. And it's an important part of his life."

Regarding Houston's run for the state Assembly, she said, "He wanted to represent a larger constituency."

Originally, Houston wanted to run for Assemblywoman Lynn C. Leach's seat in 1996, but he said he felt the timing wasn't right because he was still occupied being mayor. But after the new millennium arrived, he set the wheels rolling forward in his bid for higher office.

"It's interesting to look at bigger policy," he said. "It was a natural progression."

When he ran for the Assembly in 2002, he raised $500,000 from the Republican Party for his campaign.

He said the personal contact he enjoyed as mayor is not as prevalent representing thousands of people as an assemblyman.

"I rely on a survey instead of direct contact," he said.

Houston was elected assemblyman in November 2002, defeating Contra Costa County Supervisor Donna Gerber. In his first two-year term, he submitted 11 bills in 2003 and two of them were signed by the governor. In 2004, he pushed 15 but only one of them became a law.

One of Houston's first-term bills passed allows the state to reimburse up to 100 percent of property damage caused by a disaster in the Delta.

The majority of his early bills died or failed to get passage.

"As mayor, it's fulfilling to have your finger on what's going on in the community," Houston said. "You're moving the Titanic very slowly in Sacramento."

He said his greatest accomplishment in his three terms in office was continuing the efforts of Leach and the school district in getting equalization funds to schools in the San Ramon Valley. He said he worked with Gov. Schwarzenegger on the funding.

"I gotta give Guy credit," said Joan Buchanan, trustee for the San Ramon Valley Unified Board of Education. "He also fought for us."

Houston said Los Angeles and San Francisco counties, which have large urban populations, received the majority of state school funds from equalization.

He said the key to getting more funds is concentrating on increasing the amount of money that was due to his local school district and not touching the money allocated to the large urban counties.

He said he received thousands of letters from residents in the district requesting equalization money from the state. The district received $2.6 million from the state this current school year, said Mike Bush, district assistant superintendent of business services.

"We piggybacked on Leach's work," Houston said. "It was a team effort."

Houston said he describes himself as neither a moderate nor a conservative.

"I never try to label myself," he said.

However, his voting record suggests otherwise.

In 2004, he voted "No" to legislation about raising the state minimum wage to $7.25 per hour and voted against another bill in 2006 that sought to raise the minimum wage by $1.25.

"I think that raising the minimum wage is not necessary," Houston said. "I see it as a job killer. It's a big cost increase." If the costs of businesses increase, they may go away or not hire people for jobs, he said.

In addition, he voted "No" on a bill that required companies with more than 10,000 California employees to spend 8 percent of their annual payroll costs on health care insurance for employees in 2006.

Houston said the legislative piece was singling out Wal-Mart.

"I don't believe you should put on a payroll tax," he said. "It's unfair to Wal-Mart."

If people decide to put a payroll tax on Wal-Mart, they should place the same type of fees on everybody else, he said.

And he voted against the state's new California Global Warming Solutions Act, which was signed into law by the governor last year to reduce emission of gases that contribute to global warming.

Houston said the law lacked a market approach to make companies curb their gas emissions. He supported companies buying and selling emission credits. He noted that Japan, the European Union and other areas on the East Coast use a market approach in dealing with global warming.

"It's an intelligent way of doing it," he said.

"It's easier for businesses to comply, and a new commodity that could be exchanged and traded," said Aaron Bone, Houston's chief of staff.

Currently, Houston serves as vice-chairman for the Assembly Local Government Committee and is a member of the Banking and Finance as well as the Transportation committees.

Lawsuits make the news

In 2004, Fremont Bank filed a lawsuit against Houston and his partner and brother Eric, in a bid to force them to repay a loan of more than $200,000 to their father's bankrupt business.

The case has been settled, said Nancy King, a legal assistant associated with the lawyer who was involved with the people who filed the Fremont lawsuit.

But another lawsuit against Houston has not been settled.

A group of seniors filed a civil lawsuit in 2004 against Guy Houston and his father Fred. Their lawsuit claimed they were encouraged by the Houstons to invest thousands of dollars from their retirement funds; however, they claim, they never saw profits plus lost their original investment.

Plaintiffs Gerald Stefanski of Dublin, Samuel and Joann Story of Concord, and Carol Tomasa have filed the lawsuit against the Houstons. The lawsuit claimed they had invested money with Winning Action Investments, which contained other businesses called the Investment Partnership and the Houston Napa Development; and as a result, they have lost their money due to fraud and negligent representation, according to court documents.

Houstons allegedly have done the following, according to court documents:

* They diverted funds and other assets of the Investment Partnership, to other than partnership uses, including funding Houston's other business entities; and

* They diverted assets from the Investment Partnerships to themselves and to other business entities to the detriment of their creditors, including the plaintiffs.

Subsequently, Guy Houston has submitted legal statements to refute the plaintiff's allegations. According to court documents, he has never had any conversations or solicited and received money from Tomasa.

Additionally, he said he has never been an agent, an employee or a partner of the Investment Partnership in regards to Tomasa. Additionally, Houston's lawyer wrote in court papers there are no documents linking him with the Investment Partnership, and he never took any money from it for his own purpose.

Nonetheless, some of the plaintiffs disagreed vehemently.

Gerald Stefanski, now in his 70s, said he got involved with the Investment Partnership when he walked by the establishment on Clark Avenue and Dublin Boulevard.

He said he talked to Fred Houston, and he was convinced to roll over his Individual Retirement Fund (IRA) to his company. He said he first invested $18,000 into Houston's company in 1984.

He said his venture was earning $85,000. Afterward, he invested approximately 10 times in the company. When Fred Houston filed for bankruptcy a couple of years ago, Stefanski lost around $300,000.

Stefanski's wife Jean said Fred promised them that they would give them their money.

"We never got a penny," said Jean Stefanski, 75.

"Every time we turn around, they have an excuse," Gerald Stefanski said. "It makes me kinda sick to the stomach."

"I trusted Fred and Guy Houston," he added. "I thought they would never do anything like that."

Houston has declined to comment on the allegations. Last January, he submitted a summary of judgment, which gives him the opportunity to cut through the plaintiff's pleadings and challenge the court, despite his allegations, whether the dispute is worth resolving in a trial.

His hearing on the judgment is tentatively scheduled on Feb. 15, said Morgan D. King, the attorney representing the plaintiffs. Houston has filed a civil motion, which grants him immunity from dealing with anything that pertains to the case while the Assembly is in session, said King.

Houston can deal with the case when the Assembly is adjourned for at least 40 days, which will be next October or November, said King.

"The current status is that we are still doing depositions and examining documents," said King. "He's trying to dismiss Mr. Stefanski's case and Tomasa's cases. I don't think he's going to be able to do it.

"When the case goes to trial is anyone's guess," King added.

"It took forever to get a deposition," said Jean Stefanski. "It's been going on for four years. He's waiting for us for to die off. He's delaying the time."

"I'm not answering any questions at all about the case," Houston said. "The readers will know when there is a conclusion. When it's done, they'll know."

"I am confident that this will be all resolved by the end of year," he added.

Onward to 2009

Houston lives in San Ramon with Inge, his wife of 16 years, and their three children. He said he is considering his options, to run for the state Senate or for the congressional seat of U.S. Rep. Jerry McNerney (D., District 11) when it expires in two years.

Houston said he is going to meet Republican Party officials in Washington, D.C., in the next couple of weeks.

"It's too early to tell," he said. "We'll see in the next several months."

"He's well thought of in the Republican Party," said Contra Costa County Republican Chairman Tom Del Becarro.

"He's a team player," he said. "He's certainly the most prominent Republican in Contra Costa County."

"He's cultivated a lot of friends and relationships," he added. "He's a hard and steady worker when it comes for running for office. He doesn't seek undue attention to himself."

Danville Mayor Mike Shimansky said he has known Houston for 20 years.

"Guy helped me refinance my mortgage in my house," Shimansky said. "I appreciate that."

"In general, Guy's kind of a family guy even though he is busy in Sacramento," he added. "I think that's what this valley needs."

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