Well-known for delivering terrific deal-of-the-day coupons, Groupon has earned a reputation for promoting local businesses while providing consumers with incredible bargains. The Around Dublin Team has purchased many fantastic groupons that feature restaurants and service providers near Dublin, CA and the greater San Francisco Bay Area. We love Groupon. A few months ago, Groupon garnered national attention when it offered the irresistible Gap deal, where shoppers paid $25 for a $50 Groupon certificate. Although some have criticized Groupon for turning back on its roots as a local deals provider, the Gap campaign solidified Groupon’s standing in the social buying market place and garnered the attention of Google.

Google had offered to buy Groupon at $6B, but the Chicago-based startup walked away the acquisition deal. Since walking away from Google’s offer, Groupon had suffered a series of public relations debacles including a collection of Super Bowl ads that have offended millions and an FTD deal that offered no real savings to customers.

Groupon initially only had one deal for a geographic area per day. Lately Groupon has been featuring many businesses within an area every day to take advantage of its growing customer base. This change in strategy appears to be motivated by the rising demand for businesses hungry for the kind of foot traffic that Groupon can deliver and the horde of competitors like LivingSocial and Yelp nipping at its heels.

As Groupon increases the volume of daily deals offered, it may be relaxing its business vetting process. On January 20th, Groupon offered an East Bay deal where customers pay $10 for $20 worth of food and beverages at Pear Street Bistro in Pinole, CA. Groupon sold 408 of these deals. While this result may not be a home run for Groupon, it is definitely respectable for a relatively small market like Pinole, CA. What Groupon may have overlooked during its business vetting process is that Pear Street Bistro and its owner Gary Wong were at the epicenter of a huge scandal in Pinole just a few years ago that resulted in the recall and resignation of three Councilmembers.

Pear Street Bistro owner Gary Wong was good friends with former Pinole Mayor Maria Alegria, Councilmember Stephen Tilton, and Councilmember David Cole. All three helped Wong obtain nearly half a million dollars in a Pinole Redevelopment Agency loan to purchase the mixed-use building with Pear Street Bistro on the first floor and four apartments directly above the restaurant. After Wong skipped payments to the Redevelopment Agency for over two years and was letting a Councilmember’s brother live in one of the apartments for free, Pinole’s City Manager Belinda Espinosa recommended to have Pinole’s City Council move to foreclose on the building.

After making the recommendation to foreclose on the Pear Street Bistro property, City Manager Espinosa was fired by way of a 3-2 vote with Wong’s friends on the Council, Alegria, Tilton, and Cole, in the majority. Alegria, Cole, and Tilton then pushed the City of Pinole to attempt to purchase Wong’s Pear Street Bistro building for $3M, roughly double its assessed value at the time. Disgraced Councilmember David Cole eventually resigned and former Mayor Maria Alegria and Councilmember Stephen Tilton were both recalled thanks to the efforts of the Concerned Citizens of Pinole. City Manager Belinda Espinosa, who had been wrongfully fired by Alegria, Tilton, and Cole, was then rehired by the new Council after the recall was complete.

While the dirty political players have been removed for now, Wong still owns the Pear Street Bistro and escaped from the scandal that he helped to create nearly unscathed. When alerted to this issue early in the morning when the deal was offered, Andy D. of Groupon promised to “pass (the feedback about Pear Street Bistro) on to the right people,” yet Groupon continued to sell over 400 of the Pear Street Bistro deals until the scheduled expiration at 11:59PM.

This apparent oversight in background check may be due to the fact that Groupon is hiring business development executives who either work outside the area deals are offered or are perhaps not familiar with the region’s local history. Perhaps Groupon simply does not care about who it does business with as it grows. Groupon has sold nearly 28 million deals that have saved shoppers $1.2B. It may simply be scrambling for market dominance, while viable competitors like LivingSocial and Yelp Deals are gaining traction. While Groupon’s hustle is admirable, it should never toss out its moral compass just to scratch out a few extra deals.