Ethics Commission Moves Ryu’s Reform Motions Forward

With the increase in construction and development in Los Angeles in recent years, the city’s efforts to reform rules for financial contributions by developers and property owners have taken on additional urgency.

City Council Member David Ryu has tried twice since taking office to introduce motions that would reform city rules on donations from real estate developers and others involved in land use projects…but neither of those motions were acted on by the city.  Since then, however, reports of FBI and other investigations of city officials have surfaced, and a third, more recent finance reform motion from Ryu and fellow Council Members Paul Krekorian, Paul Koretz, Nury Martinez, Mike Bonin and Joe Buscaino gained some significant traction last week as the Los Angeles City Ethics Commission unanimously voted to support the proposed reforms, and sent them along to the City Council’s Rules, Elections and Intergovernmental Relations Committee for further consideration.

At the Tuesday, February 19, Ethics Commission hearing, Ryu suggested that the city’s low voter turnouts in municipal elections are a direct result of a lack of voter trust in our elected officials, and contended that “Democracy in Los Angeles is on life support.”

“Doing nothing is not an option,” he said. “A well-crafted ban on developer donations and behested payments would free the City’s decisions from a perception of bias.  It would severely limit both city officials and developers from being able to exploit or game the system.”

The reforms suggested in Ryu’s most recent motion would include prohibiting contributions to both candidates and elected officials from property owners (individuals or legal entities), and their representatives, whenever those parties are involved in a land use project requiring discretionary approval.  The proposal would also prohibit “behested” payments (e.g. donations to a candidate or official’s suggested non-profit organization), as well as set stricter disclosure rules under which donors would have to document their contributions and certify that they were made in concert with city requirements.

While there was some discussion at the hearing about the legality of making rules for any specific class of people (e.g. developers), Commission President Melinda Murray noted that similar finance reforms in San Diego have stood up to legal challenges recently, and even cases such as “Citizen’s United” have said that such rules are allowable if there have been implications or proof of corruption.  The recent FBI investigations in Los Angeles, she said, have given her “confidence” that the Commission should move ahead with the reform discussions.

In addition to Council Member Ryu, nearly 20 other members of the public, most of whom represented various community and non-profit organizations, spoke at the hearing, and all but one urged the Commission to support the reforms.  And after more than two hours of discussions and refinements, they did.

In short, the basic provisions approved include:

  • A ban on contributions from non-individuals (e.g. entities such as LLCs and corporations) and from individual (human) lobbyists, bidders, contractors, subcontractors, and other “principals” (which includes property owners, representatives, developers, architects, engineers, etc.) who have an active land use case pending with the city
  • An extension of the ban to fundraising and “bundling” activities
  • An extension of the ban to donations to or fundraising for any city or outside committees controlled by a candidate or official
  • A donation disclosure process that would make the rules clearer to potential donors, and information about donations more transparent to the public
  • Mandatory certification of potential donors (to ensure they will comply with the rules and are not currently banned for previous violations)
  • Lowering disclosure thresholds from the current $2,500 in donations to $1,000

As the measures work their way through the City Council in coming months, there will be further discussions to refine certain terms and provisions.  (For example, would the restrictions kick in when a land use application is filed, or is there some way to “capture” such projects even sooner in the planning process?  And would the restrictions end when a land use application is approved by the city, when a Certificate of Occupancy is issued following construction, or at some other point?)  Other details – such as banning contributions from non-individuals – might also require a change in the City Charter before they could take effect, and that would require approval by the electorate in a city-wide election (the soonest of which would happen in 2020).

So while the Commission approval was a big first step, there is still be a long way to go before a final ordinance is enacted.

But David Ryu, at least, was happy with the progress so far.  In a statement released after the vote, he said:

“Today, the Ethics Commission took a crucial step toward restoring trust in the City of Los Angeles. 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. 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.”

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About Elizabeth Fuller

Elizabeth Fuller was born and raised in Minneapolis, MN but has lived in LA since 1991 - first in the Sycamore Square neighborhood, and since 2012 in West Adams Heights/Sugar Hill. She was long-time board member of the Sycamore Square Neighborhood Association, currently serves on the board of the West Adams Heights/Sugar Hill Neighborhood Association, spent 10 years with the Greater Wilshire Neighborhood Council, volunteers at Wilshire Crest Elementary School, and is the co-owner/publisher of the Buzz.

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