With FBI probe looming, L.A. City Council members revive plan to limit developer donations

Two years ago, Los Angeles City Council members called for a ban on political donations from real estate developers seeking city approval for their projects, saying they wanted to erase the perception that money is the reason big buildings are getting the green light.

That plan languished at City Hall and was tabled by the Ethics Commission before it officially expired.

Now, with FBI agents conducting a corruption investigation into City Hall, council members have revived the idea.

“Now more than ever, trust is the fundamental pillar, and we need to do something to gain back that trust,� Councilman David Ryu, who spearheaded the proposal, said this week.

This time, council members are looking at going even further, by restricting donations made by developers to charitable groups at the request of city politicians. That idea was prompted by a report last year in The Times on donations to Bishop Mora Salesian High School, said Ryu spokesman Estevan Montemayor.

The Times reported that Councilman Jose Huizar personally asked companies that do business at City Hall to donate to the private school, where his wife was working as a professional fundraiser, and assigned his staff to help with the effort.

Real estate developers with projects in Huizar’s district have received subpoenas instructing them to turn over any records of contributions to Salesian, as well as to political committees tied to the councilman.

The renewed push for restrictions on political giving comes days after new revelations about the FBI investigation, which became public in November when agents raided Huizar’s home and offices.

“Obviously it’s happening now because the feds are circling City Hall,� said Damien Goodmon, a South Los Angeles activist who has long argued that big market-rate residential projects in L.A. force low-income residents out of their neighborhoods. “It’s unfortunate that it takes an FBI investigation for these things to be talked about.�

News emerged Saturday that a federal warrant sought evidence of possible crimes — including extortion, bribery and money laundering — involving more than a dozen people, including Huizar, Councilman Curren Price and current and former aides to Huizar, Mayor Eric Garcetti and Council President Herb Wesson. Also named were executives of Chinese firms involved in downtown development.

Several council members said the new push was not prompted by the FBI probe or the latest revelations. Councilman Paul Krekorian, who also signed on to the proposal last time, said he did not see the idea as being related to the investigation. Whatever is being examined by FBI agents must involve violations of existing laws, he said.

The proposal will be an important step in reassuring the public that real estate decisions at City Hall are “being made solely on the merits of the project,� said Krekorian, who represents part of the San Fernando Valley.

Councilman Paul Koretz, who represents part of the Westside, said he too had supported the proposal long before the federal investigation became public. But he argued that the probe should make it “easier for us to finally push this through.�

The resurrection of Ryu’s proposal was welcomed by Studio City resident Lisa Sarkin, who spent nine years on her neighborhood council.

“The developers have way, way, way too much sway with the council members,� she said. “I mean, even neighborhood council members have a hard time seeing their council members. But you go to a council meeting and there are developers that go into the backroom to talk to them, and there’s no accounting for any of it.�

Some in the business community argue that council members are focusing on the wrong issue. Real estate developer Mott Smith, principal with Civic Enterprise Development, said too many planning decisions are controlled by council members, which means that real estate companies need to woo politicians to get projects approved.

The system “basically makes almost everything impossible to achieve without some kind of influence being applied,� Smith said.

When the idea of restricting developer donations first arose two years ago, city leaders were facing a battle over Measure S, which would have cracked down on real estate projects that cannot be approved without changing city planning rules.

Goodmon, deputy campaign manager for the Measure S campaign, said he believes council members first unveiled the proposed ban to show that they were doing something about developer influence in the run-up to the election. Once the campaign was over and the measure had been defeated, council members let the proposal wither, he said.

The Ethics Commission, which recommends changes to campaign finance law, tabled Ryu’s plan last year.

Former Ethics Commission President Jessica Levinson, who was not on the panel when that decision was made, said she has no doubt that council members are revisiting Ryu’s proposal because of the fallout from the FBI probe. But she argued that it is the wrong strategy — both for practical reasons and because it would probably run afoul of the 1st Amendment.

“The Supreme Court is really suspicious about singling out certain people and saying, ‘You don’t get to participate in the political process by making contributions,’ � said Levinson, a professor at Loyola Law School.

Levinson said the city will probably face difficulty deciding how exactly it wants to define a real estate developer. And she predicted that if the measures passes, developers will simply funnel money into independent committees that back candidates at City Hall, which would not be governed by the new restrictions.

This time, Ryu and other council members are asking the city attorney to draft ordinances, rather than giving that direction to the Ethics Commission.

Under the proposal, real estate developers would be barred from giving to city candidates and officeholders once they have turned in an application that requires city approval or other action, provided that the request involves building or adding more than 4,000 square feet of floor area for residential projects or 15,000 square feet for commercial projects.

The donation ban would last until a year after a final decision is made on the application, the proposal said. The restrictions would apply to the owner of the property being developed, including principals of any legal entity that owns the property.

Koretz, the Westside councilman, said that this time, he believes the proposal is “very likely to pass.�

“I think people didn’t take it seriously when we introduced it a couple years ago,� he said.

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Twitter: @AlpertReyes