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Associated Press
Sep 23, 2004 - 01:00 AM

by Associated Press State & Local Wires

Schwarzenegger reviews official's potential conflict of interest

SACRAMENTO -- Governor Arnold Schwarzenegger is looking into whether Cabinet Secretary Marybel Batjer violated ethics rules by joining the board of directors of a Nevada bank that recently moved to California, according to officials.

Batjer, who helps oversee regulation of banks, lenders and mortgage brokers, joined the board of Bank Holdings Sept. 16. She took the post a month after the company announced its purchase of a bank charter in Costa Mesa and disclosed plans to move the business Sacramento. The Reno-based company also runs a loan office in Sacramento.

Batjer is one of the highest-ranking officials in California and is a former chief of staff to Nevada Governor Kenny Guinn.

Schwarzenegger spokeswoman Margita Thompson said the administration's lawyers will review Batjer's role at Bank Holdings, "and if any conflicts arise, appropriate action will be taken."

Thompson said Batjer did not know before she joined the board that the company was buying CNA Trust of Costa Mesa.

Batjer no longer deals with gambling issues, a major focus for Schwarzenegger, because of her previous work on behalf of Las Vegas gambling mogul Steve Wynn.

Watchdog groups expressed concerns this week about Batjer's relationship with the bank, which was first reported by Dow Jones Newswires.

Doug Heller, with the Santa Monica-based group Foundation for Taxpayer and Consumer Rights, said Batjer's role at the bank presents a major conflict of interest.

"It's totally inappropriate to have a high-level government official taking a job on the side as a director of a bank," Heller said, "especially when the official is the chief liaison to the state's banking regulator."

As a member of the bank's board, Batjer must attend a monthly board in Reno, said Hal Giomi, chairman and chief executive of Bank Holdings.

Giomi said that California financial regulators do not have authority over the company's California interests because the company's charter is in Nevada.

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