L.A.’s lobbying law loophole
A proposal would let unions avoid tight campaign finance and conflict of interest restrictions.
When is a paid advocate a lobbyist? And, more importantly, when and how much information should paid advocates be required to publicly disclose about their lobbying?
For years, Los Angeles’ rules regulating lobbying have been squishy, and many would-be lobbyists have been able to avoid registering with the Ethics Commission and revealing their efforts to influence policy. The City Council is now considering tightening those rules in a long overdue update to the city’s Municipal Lobbying Ordinance, and most of the changes are big improvements that will increase transparency.
But there are still areas of concern, including a last-minute change proposed by council President Paul Krekorian that would, for the first time, explicitly exempt union employees from having to register as lobbyists. Currently, union employees are supposed to register as lobbyists if they spend 30 hours in three months advocating to city staff and elected officials on issues other than collective bargaining agreements with the city. Employees of unions representing construction workers, carpenters and hotel workers have registered as lobbyists this year.
Instead, under the proposal, union employees would fall into a new category of paid advocate called a “nonprofit filer” that would have fewer restrictions and disclosure requirements than a lobbyist or lobbying firm.
Under the proposal, any charitable nonprofit or union with an employee paid at least $5,000 a year to lobby city officials or departments would have to file quarterly reports with the Ethics Commission disclosing the employee name, what he or she advocated for and the official or department lobbied. That is similar to what lobbyists have to report.
But there are big differences when it comes to restrictions. Lobbyists are barred from giving gifts or making campaign contributions to a city candidate (though they are allowed to deliver contributions from clients, which they have to report). Nonprofit filers, however, would be allowed to offer gifts and campaign contributions, and they would not have to file reports detailing gifts to city personnel, political contributions or fundraising on behalf of city candidates.
Perhaps that’s not a big deal for most nonprofits. Under Internal Revenue Services rules, 501(c)(3) charitable nonprofits are forbidden from contributing to or supporting political candidates, though their employees can do so. But labor organizations are 501(c)(5) nonprofits. They are allowed to support candidates and make campaign contributions. Classifying unions as nonprofit filers rather than lobbyists creates a significant loophole in a city where labor unions are major players in elections.
Another difference: Registered lobbyists are barred from serving as city commissioners to reduce the potential conflicts of interest. But nonprofit filers would be allowed to serve on such commissions.
Krekorian said he’s trying to differentiate between professional lobbyists who are hired to advocate a position and employees who are advocating on behalf of their organization. His proposal for the nonprofit filer category came after charitable nonprofits protested that an earlier proposal lumped them in with lobbyists and would subject them to onerous registration and reporting.
But his proposal would allow major political players to avoid having to register their employees as lobbyists and follow important regulations designed to curb or disclose their influence and spending. Powerhouse organizations, like the Los Angeles County Federation of Labor, would not have to register as a lobbyist employer. Nor would major nonprofits, such as AIDS Healthcare Foundation or USC.
The Municipal Lobbying Ordinance was adopted in 1994 to ensure that city officials and the public would know who is being paid by whom to influence government decisions, but it hasn’t been updated since. Previous City Councils ignored Ethics Commission recommendations to modernize the law. So it’s important that this City Council — responding to recent scandals — is finally moving on reforms.
The proposed update would reverse an ill-considered 2006 ballot measure developed by the City Council without Ethics Commission input that created a difficultto-enforce definition of a lobbyist — someone who spends 30 hours lobbying within three months. Since nobody shadows lobbyists, tallying their minutes of persuasion, this allowed some to skirt registering.
The proposed standard requires registration if a person is entitled to receive at least $5,000 a year for lobbying, which is clearer and easier to enforce — and will capture more paid advocates. The updated law would also require that lobbyists provide verbal disclosures to neighborhood councils, and to make clear in public filings what position they are advocating.
These are all good changes — but not sufficient. Angelenos should know who is being paid to influence city decision-makers. In closing some loopholes, the council should not be opening new ones, especially for some of the city’s biggest and most influential unions and nonprofits.