L.A. plans to limit developer donations, but not until 2022

Dec. 3, 2019 3:10 PM PT

L.A.’s elected leaders are on the brink of passing a law that would deprive them of one of their biggest sources of political money — real estate companies with projects pending at City Hall.

Under the proposal, those companies and their executives would be prohibited from giving directly to the election campaigns of city candidates. But enforcement of those new restrictions could still take a while — more than two years.

The prolonged timeline has drawn complaints from critics, who say it will allow incumbent council members in the March 2022 primary campaign to preserve one of their key advantages over challengers.

Rob Quan, an organizer with the group Unrig L.A., said he believes council members slow-walked the new donation restrictions so they could continue collecting checks from real estate interests — and improve their odds of staying in office in 2022. As many as seven incumbents could seek re-election that year.

“Developer money tends to follow the people holding power, not the people challenging power,” said Quan, whose organization is looking to reduce the influence of money in L.A. politics.

The proposed ordinance, scheduled for a vote Wednesday, comes little more than a year after FBI agents raided the home and offices of Councilman Jose Huizar, who for years ran the powerful council committee that greenlights large-scale real estate projects. It also comes as a developer in Harbor Gateway is facing bribery and campaign money-laundering charges tied to city approval of an apartment complex in 2015.

Backers within City Hall say the new fundraising restrictions will help address a longstanding perception that real estate interests have undue influence over planning decisions, among the most important powers wielded by the city’s elected officials.

Council members first proposed a ban on developer donations in January 2017, when city leaders were trying to defeat a ballot measure that would have barred the approval of many large-scale development projects. After voters rejected the measure, the proposal languished. But it was revived in the wake of the FBI raids.

With so many delays, campaign finance reform advocates had resigned themselves to the idea that new fundraising restrictions would not be in place in time for the council’s March 2020 primary election — or any runoff election held in November.

But last month, the council’s rules committee backed an ordinance that also would not go into effect after the March 2022 city primary election.

In other words, candidates could continue taking as much as $800 from each developer during the primary, but would be barred from doing so if they found themselves in a runoff for the November 2022 election.

Officials said the delay would be needed as long as council members insist on having a developer database in place to coincide with the new restrictions, which will take several months to set up. By the time it is up and running, fundraising will already have begun for the March 2022 primary, ethics officials said.

Having the new rules go into effect as part of the November 2022 runoff campaign would “provide certainty for campaigns and all those impacted,” said David Michaelson, chief assistant city attorney, in a memo to council members.

Asked about complaints from activists about the delays — and the fact that council members would continue collecting developer money for two more years — a spokesman for council President Herb Wesson said that his committee, which vetted the new rules, took up the ordinance two months after it was drafted by city lawyers.

Councilman David Ryu, who has spent years pushing for the new restrictions, said through a spokesman that he is not happy with the proposed delay in enforcement. Ryu wants the rules to apply to both the 2022 primary and any runoff, said Estevan Montemayor, the councilman’s deputy chief of staff.

“He’s disappointed that’s not the case and he plans to amend the language [of the ordinance] when the item is before the full City Council,” Montemayor said.

Tyler Joseph, policy director for the Ethics Commission, said an electronic filing system would not be needed for enforcement of a ban on developer donations. Measure H, which prohibited bidders on city contracts from making campaign donations to city candidates, did not require such a database when it was approved in 2011, he said.

“While having a filing system is important for disclosure and transparency, the commission has always been in favor of applying the ban as soon as possible,” Joseph said in an email.

With Mayor Eric Garcetti, City Atty. Mike Feuer and City Controller Ron Galperin all facing term limits, contests for citywide offices will be wide open in March 2022. Fundraising for those citywide races begins in March 2020.

In addition, as many as seven council members — Gil Cedillo, Bob Blumenfield, Monica Rodriguez, Curren Price, Mike Bonin, Mitch O’Farrell and Joe Buscaino — have the opportunity to run for re-election in 2022. Fundraising for those seats is scheduled to start in September 2020.

Any race in which the top two vote-getters fail to secure 50% of the vote would head to a runoff in November 2022. Political experts say they don’t expect most council contests to result in a runoff, given the city’s long history of re-electing incumbents.

Under the proposal heading to the council, elected officials at City Hall would still be able to ask real estate developers pursuing L.A. projects to make contributions to their favored charities and governmental initiatives — a practice known as “behesting.”

In addition, developers would continue to have the power to make unlimited donations to “independent expenditure” committees, which support specific candidates but do not coordinate their efforts with them. L.A. cannot legally limit who gives to those committees or how much they can donate.

Advocates of campaign finance reform have voiced disappointment that the proposal before the council is not more ambitious. And Rey López-Calderón, executive director of the watchdog group California Common Cause, said he thinks it’s outrageous that council members are planning such a lengthy delay for enforcement of the new rules.

City leaders should move ahead with the developer donation limits “whether or not they can 100% enforce it,” López-Calderón said.

“It will be great when they update their systems and get a database” to track developers with pending projects, he said. “But what they need to do right now is show the public that they’re serious about changing the culture of Los Angeles City Hall.”

Times staff writer Emily Alpert Reyes contributed to this report.