The Los Angeles City Council moved forward Wednesday with a proposal that would restrict the ability of developers to make political contributions to candidates in city elections, although specifics of the rules still need to be finalized.
The council is also considering 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.
If ultimately approved, Los Angeles would become the first jurisdiction in the country to ban developer political donations, according to City Ethics Commission staff.
Councilman David Ryu, one of the proposal’s main backers, said the move to create the ordinances was a “historic” moment for Los Angeles.
“I know this is hard and would change the way we fundraise, but I’m asking you to do the hard thing because it’s the right thing,” Ryu said. “L.A. does not belong to us. It belongs to the people. We have a chance to make their voices heard and ensure the future of our city.”
The council requested that three ordinances be drafted by the City Attorney’s Office. One is based on Ethics Commission recommendations and one is based on a City Council motion, although they only have slight differences — with one including elections for the Los Angeles Unified School District Board of Education. The two proposals also have different definitions for “developers.” The council will ultimately have to choose between the two versions.
The third proposed ordinance would focus on behested payments.
The council voted 14-0 to ask that the ordinances be drafted. But all will have to return for further discussion.
“We are not voting on an ordinance,” Ryu said. “We are instructing the ordinance to come back to the Rules Committee and the city attorney will work with departments that address the many concerns and draft something that’s legally sound.”
Any ordinances that are adopted would become effective after the 2020 election. Several council members raised questions during the meeting about the definitions of developers and behested payments that would be affected by the ordinances.
Council members said they wanted to ensure the ordinance is constitutionally enforceable before adopting something that could drastically change funding opportunities for city candidates.
Councilman Greig Smith said the ordinances could have a “chilling effect” on some “non-individual” organizations that work closely with council members in their districts. He said he didn’t want force candidates to financially distance themselves from organizations such as charities and beneficial community nonprofits.
Efforts to update the city’s campaign finance laws began after a November 2018 FBI search of Councilman Jose Huizar’s home and offices. He was also named in a search warrant outlining 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.
Huizar voted in favor of the creation of all three ordinances Wednesday.
Under the guidelines recommended by the Ethics Commission, non-individuals would be prevented from contributing to city elected officials and candidates, and developers seeking city approval of projects would be restricted from making political contributions from the date the project application is filed until 12 months following the final resolution of the application.
City law limits contributions from non-individuals, with the charter setting limits on such donations, adjusted annually to reflect changes in the Consumer Price Index. The current maximum is $226,500 for City Council candidates.
The Ethics Commission’s proposed restrictions 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 developers and non-individuals 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.
Under the recommended Ethics Commission guidelines, behested payments would be banned for “restricted” sources, includes developers, lobbyists, lobbying firms, bidders, contractors or people who attempted to influence the elected official in the previous 12 months.
According to the Ethics Commission, eight of the 10 donors with the most behested payments over the past five years had done business with the city within that period.
The behested payment ban would include several exceptions, including payments that are solicited because of a state of emergency.
A ban on non-individual contributions would require voter approval, according to Ethics Commission staff.