Amid FBI Probe of City Hall, Council Committee Looks at Developer Donation Ban
Posted Wednesday, April 10, 2019 - 10:57 am
Amid a federal corruption and bribery investigation that appears related to real estate developments, a Los Angeles City Council committee will consider a proposal Wednesday to ban developers from contributing to local elections if they have pending projects in need of city approval.
The changes would also include a ban political donations from non- individuals and on “behested” payments made to a charity or government program at the request of an elected government official.
The move 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 new 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 is scheduled to take up the issue during an 8 a.m. meeting.
“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,” Councilman David Ryu said after the Ethics Commission vote. “I am grateful to the ethics commissioners and the commission staff for taking bold action today to reform our campaign finance laws.”
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, 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.”
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 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 it 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.