Amid a federal corruption and bribery investigation that appears related to real estate developments, a Los Angeles City Council committee Wednesday moved forward with a proposal to ban developers from contributing to local elections if they have pending projects in need of city approval.
The proposed changes would also include a ban on political donations from non-individuals and on “behested” payments made to a charity or government program at the request of an elected government official.
It would be the first ban on developer donations by any jurisdiction in the country, according to City Ethics Commission staff.
A half-dozen City Council members introduced a motion in January seeking some of the changes. A similar motion was introduced in 2017 but did not gain any traction with the council or Ethics Commission before expiring.
“The main goal overall is to restore trust, to rebuild that trust and restore that trust in City Hall and city government,” Councilman David Ryu told City News Service.
The latest motion was introduced following a November FBI search of Councilman Jose Huizar’s home and offices. 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. No one has been arrested or charged as a result of the investigation.
The Ethics Commission backed the changes in February, and the Rules, Elections and Intergovernmental Relations Committee moved the proposal forward after hearing from the public and Ryu, one of the main supporters of the proposal. The committee’s direction was that the city attorney draft two ordinances, one based on the Ethics Commission recommendations, and one based on the City Council motion.
Ryu told CNS the two options have slight differences, including that the motion would include elections for the Los Angeles Unified School District and have different definitions for developers and behested payments. He wrote a letter asking the committee to consider the City Council motion in addition to the Ethics Commission’s recommendations.
“We want to also have a very legally defensible and enforcible ordinance, so I wanted to give the city attorney additional options,” Ryu told CNS.
Under the guidelines recommended by the Ethics Commission, non-individuals would be prevented from contributing to city elected officials and candidates, and developers needing discretionary approval from the city 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 limits contributions from non-individuals, with the charter stating candidates may not accept more than certain total dollar amounts from non-individuals, adjusted annually to reflect changes in the Consumer Price Index. The current maximum is $226,500 for City Council candidates.
The Ethics Commission guidelines on a 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.
Among the amendments added by the committee was that the Ethics Commission hold town hall meetings to get feedback from campaign treasurers and charitable organizations on how the changes would impact their operations. Ethics Commission staff would also be directed to develop a database on developers that would be covered under the new rules.
A number of steps need to happen before the proposal could become law, including that the City Council would need to vote to direct the City Attorney’s Office to draft an ordinance or ordinances, which would need to be voted on again by the City Council and signed by Mayor Eric Garcetti. The ban on non-individual contributions would also require voter approval, Ethics Commission staff told the committee.
Wesson expressed a desire to move along quickly.
“The moment is now. The time is now,” he said. “We’re going to move forward on it. We need to figure out how to make it work.”
Councilman Marqueece Harris-Dawson expressed some concerns about how the new rules could impact nonprofits.
“I just worry that when there’s a rush that we won’t actually sit down with the leaders of not just nonprofit organizations, but actually people who organize events,” Harris-Dawson said. “Right? So Mr. Wesson and I have a big — and (Councilwoman Nury) Martinez has been there — we have a big Martin Luther King parade in the community. It is an absolutely iconic event in the city of Los Angeles. There are parades all over the city. All of these folks are engaged in the process of raising resources to make that work happen. You need time to be able to have a conversation with them.”
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.”
Under the recommended Ethics Commission 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 payors 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 payments that are solicited because of a state of emergency.
The FBI probe appears to be focused on numerous City Hall figures. A warrant the federal agency obtained for a private Google email account for former Deputy Mayor Ray Chan said the agency was also seeking information regarding Huizar, Councilman Curren Price, and current or former aides to Huizar, Wesson and Mayor Eric Garcetti.
Joel Jacinto, who was named in the warrant, resigned from his post on the Board of Public Works in December.
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