L.A. Ethics Commission wants ban on campaign contributions by developers

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By Craig Clough
City News Service

LOS ANGELES (CNS) – The Los Angeles Ethics Commission today recommended banning non-individuals and developers from contributing to local elections, along with a ban on some “behested” payments made to a charity or government program at the request of an elected government official.

The move comes amid a wide-ranging federal corruption and bribery investigation of City Hall that appears to be related to real estate developments, and would be the first ban on developer donations by any jurisdiction in the country, according to Ethics Commission staff.

A half-dozen City Council members introduced a motion last month seeking some of the changes; a similar motion was introduced in 2017 but did not gain any traction with the City Council or Ethics Commission before expiring. The motion presented in January by council members David Ryu, Paul Krekorian, Joe Buscaino, Paul Koretz, Mike Bonin and Nury Martinez was seconded by Council President Herb Wesson.

“By limiting the outsized influence of developers in our local elections and embracing clean campaign finance laws, the commission has made clear that the status quo is not working for Los Angeles voters, and is failing Los Angeles democracy,” Ryu said. “I am grateful to the ethics commissioners and the commission staff for taking bold action today to reform our campaign finance laws. I look forward to seeing this item through City Council, and urge Council President Herb Wesson to schedule the motion in the Rules Committee as soon as possible.”

Under the recommended guidelines, non-individuals would be prevented from contributing to city elected officials and candidates, and developers needing discretionary approval would be restricted from making political contributions from the date the application for the property is filed until 12 months following the final resolution of the application.

City law currently limits contributions from non-individuals, as the charter states that candidates may not accept more than certain total dollar amounts from non-individuals, and are adjusted annually to reflect changes in the Consumer Price Index. The current maximum is $226,500 for City Council candidates.

The ban on non-individual and developer contributions would also apply to contributions to any committee controlled by an elected city official or a candidate for elected city office, and would also prohibit them from fundraising and bundling, meaning they could not collect large amounts of other people’s money and deliver it to an elected official or candidate.

The Ethics Commission had previously considered a ban on developer contributions and some members had concerns about its potential legality. But the recent FBI investigation appears to have shifted the ground, as the Ethics Commission staff report on the issue noted the investigation and the media reports around it.

“Concern that developers exert undue influence undoubtedly exists, as evidenced in recent media reports focused on City Hall and extensive public comment received by the Ethics Commission,” the report says. “There is no question that the widespread perception is that there is a pay-to-play culture at Los Angeles City Hall, in which developers give money to elected officials and their favorite organizations in an attempt to influence decisions about development projects and public policy.”

Tyler Joseph, an analyst for the Ethics Commission, also said that staff felt comfortable recommending the ban because the city already has other activity-based contributor bans at City Hall, including on lobbying and contract bidding.

Los Angeles City Councilman Jose Huizar’s home and offices were searched by the FBI last November, and he was also named in a search warrant related to the FBI’s probe of possible bribery, extortion, money laundering and other crimes as part of a corruption investigation at City Hall focusing on huge real estate investments from Chinese companies.

The warrant was for a private Google email account for former Deputy Mayor Ray Chan, but said it was also seeking information related to numerous City Hall figures, including Huizar, Councilman Curren Price, and current or former aides to Huizar, Council President Herb Wesson and Mayor Eric Garcetti.

Joel Jacinto, who was named in the warrant, resigned from his post on the Board of Public Works last month.

The warrant does not say the FBI has gathered evidence of criminal activity by any of the people or companies named in the document, and no one has been arrested or charged in the investigation, but the Ethics Commission report noted that media reports related to the investigation “and the allegations they contain, whatever the ultimate result, significantly erode public confidence in city government.”

Ryu spokesman Estevan Montemayor recently told the Los Angeles Times the idea to ban some “behested” payments, which was also included in the new City Council motion, was prompted by the newspaper’s report last year on donations to Bishop Mora Salesian High School. The school is Huizar’s alma mater, and his wife, Richelle, also worked there as a paid fundraiser.

Under the recommended guidelines, behested payments would be banned by “restricted” sources, which includes a lobbyist, a lobbying firm, a bidder, a contractor, a person who attempted to influence the elected official in the previous 12 months, and developers.

Of the 10 payers who were reported as having made the most behested payments over the past five years, eight had business with the city during a recent five-year period, according to Ethics Commission staff.

The behested payment ban would include several exceptions, including for payments that are solicited because of a state of emergency, that are solicited through a communication to the general public, that solicit services — rather than dollars — provided to the city, and that occur because an elected official is involved in a grant application on behalf of the city.

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