Tag Archives: 501(c)(6) Organizations

The Checkered History Of Streets And Highways Code §36612 — How The California Court Of Appeals Made BIDs Cry By Holding That They Were Subject To The Brown Act And The Public Records Act — And How Bad BIDmother Jackie Goldberg Soothed Their Hurt Feelings By Passing A Law Stating That They Weren’t Public Officials — Is It Constitutional? — It Hasn’t Been Adjudicated So Who Knows?!

The only reason that this blog even exists is that business improvement districts in California are subject to the California Public Records Act. And the first part of the story of how this came to be is fairly well known. In 1998 Hollywood property owner Aaron Epstein wanted to attend meetings of the Hollywood Property Owners’ Alliance1 and Kerry Morrison, who then as now would willingly brook no interference in her proprietary demesne, told him to go pound sand.

Instead of slapping the silica, though, Epstein filed suit against the BID, and the process culminated in the lovely holding, in Epstein v. Hollywood Entertainment District BID, that BIDs2 were subject to the Brown Act and the CPRA. This ushered anti-BID activists into a paradise from which we are unlikely to be expelled. Kerry Morrison didn’t take this outcome with any grace whatsoever and has been pissing and moaning about it from the outset all the way to the present day.

But that opinion isn’t the only authority that subjects BIDs to transparency laws. There is also the famous §36612 of the PBID Law of 1994, which states in no uncertain terms that BIDs are subject to both the Brown Act and the CPRA.3 It also states explicitly (and ominously) that BID board members and staff are not public officials. Obviously this section was added by the legislature after the Epstein ruling, but I never took the time to investigate the history.

Until now, that is. And what an obvious-after-the-fact surprise it was to find that the bill that added that section was written by none other than Jackie Goldberg, who as CD13 Councilmember during the formation of the Hollywood Entertainment District BID was known to have a great deal of blood on her hands already.4 But by March 2001, when Epstein was finally decided, Goldberg was in the Assembly, so naturally it was to her that the BIDdies, emotionally traumatized by the court’s decision,5 went running for comfort.

And in response to their pleas Goldberg introduced AB 1021 (2001) to coat the bitter pill of Epstein with some soothing syrup and to codify these changes in §36612 of the PBID law even while acknowledging that the legislature wasn’t going to be able to change the court’s holding 6 And I recently obtained a copy of the bill analysis prepared at the time for the Assembly’s Committee on Local Government to help them understand what they were voting for.7 Therein are laid out not only the provisions of the new law, but the complaints of the BIDdies, so the connection is perfectly clear.

The main concessions to the BIDdie agenda found in the code section are the explicit statement that BIDs are private corporations and that neither BID boards nor staff can be considered public officials for any reason. This last bit is tied in to the BIDs’ fear that board members might be subject to California’s political reform act and to Government Code §1090 and therefore to various ethics restrictions and financial disclosure requirements, although it’s not really clear to me that the language has that effect. I’m no kind of expert, though.

Another sop to the BIDdies provided here by Goldberg was the authorization of 10 year renewals. Previously BIDs could only renew for up to five years. In any case, turn the page for more detail, more non-expert discussion and, as always, a transcription of the document.
Continue reading The Checkered History Of Streets And Highways Code §36612 — How The California Court Of Appeals Made BIDs Cry By Holding That They Were Subject To The Brown Act And The Public Records Act — And How Bad BIDmother Jackie Goldberg Soothed Their Hurt Feelings By Passing A Law Stating That They Weren’t Public Officials — Is It Constitutional? — It Hasn’t Been Adjudicated So Who Knows?!

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How Kerry Freaking Morrison And A Bunch Of Other Bad BIDdies Helped Gut AB-1479, An Essential Improvement To The California Public Records Act, And It Seems, If You Believe Them (Although Why Would You, Really?), To Be All My Freaking Fault For Being So Freaking Mean To Them On The Freaking Internet And Being “Intent On Bringing [Their Freaking] Organization To Its [Freaking] Demise”!

In February 2017, California State Assemblymember Rob Bonta of Oakland introduced AB-1479, which would have amended the California Public Records Act to allow judges to assess civil penalties of between $1,000 and $5,000 to punish flagrant CPRA violations. The bill sailed through the Assembly and almost made it through the Senate until a shitstorm of opposition, including from many Los Angeles BIDs, some of whom cited this blog as part of their parade of horribles, hired high-powered lobbyists Gonzalez, Hunter, Quintana, & Cruz and thereby sank the most important part of the bill, leaving only a tragic and fairly useless husk.

According to a staffer of Bonta’s who is in charge of this bill it’s essentially irredeemable this term, but they’re going to try again next year. Also, she was kind enough to send me a huge selection of letters received, pro and con, including a bunch from many of our Los Angeles BID friends. If we can’t beat them, well, at least we can publish their ravings and then mock them, right? The whole collection is available on Archive.Org. You should definitely read through it if you’re interested. The support letters are fabulous, but I don’t have time to discuss them here.

And turn the page for a more comprehensive description of exactly what happened, of how the BIDs, as usual, missed the whole point, and an exceedingly, painstakingly, obsessively, mockingly detailed analysis of this characteristically delusional, narcissistic, crackle-pated nonsense from our own Ms. Kerry Morrison.1
Continue reading How Kerry Freaking Morrison And A Bunch Of Other Bad BIDdies Helped Gut AB-1479, An Essential Improvement To The California Public Records Act, And It Seems, If You Believe Them (Although Why Would You, Really?), To Be All My Freaking Fault For Being So Freaking Mean To Them On The Freaking Internet And Being “Intent On Bringing [Their Freaking] Organization To Its [Freaking] Demise”!

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Why In The World Did City Employees Avak Sarafian And Huizar Staffer Kevin Ocubillo Attempt To Get The Historic Core BID An Illegitimate Waiver From Its Statutory And Contractual Obligation To Disclose The Profits It Made From Slavery?!

In 2003 the City of Los Angeles passed a Slavery Disclosure Ordinance,1 which, in short, requires most firms that contract with the City to disclose any profits they2 made from American slavery prior to 1865. The L.A. Times published a good contemporaneous summary of the issues, which is worth a read.

This measure was promoted by pro-reparations advocates as a (mostly) symbolic expression of the City’s opposition to slavery. It’s mostly symbolic in, first, that it only requires disclosure. In fact, the only actual tangible requirement of the law is that contractors complete a disclosure affadavit. No firms that profited from slavery are prevented from doing business with the City. Also, any number of types of firms are exempt from the law. An exhaustive list of exceptions can be found at §10.41.3.

Among these are, most crucially, financial institutions. Since banks, stockbrokers, and other such firms doing business in finance are likely either to have existed prior to the ratification of the Thirteenth Amendment or else to have acquired financial firms that were, and since every major business in the U.S. during slavery times made money from the stolen labor of slaves,3 this is no minor exception.

Another huge exception is that the law only applies to slavery in the United States before 1865.4 Of course, slavery in present-day Los Angeles is not only rampant, it’s not only tolerated, but is probably pretty acceptable, at least to elected City officials given the likely level of campaign contributions made by slavers. After all, it’s not poor people buying those slaves, and probably not politically uninvolved people, either. Just for instance, between them, modern-day slaveholders Ray and Ghada Irani have given more than $22,000 to various candidates.5 Given the obsessive contribution-seeking behavior of our Councilmembers, this is more than enough explanation for the narrow scope of the law.6

And finally, for whatever reason, §10.41.3(E) exempts 501(c)(3) corporations, and that brings us to this morning’s actual subject, which, believe it or not, is the Historic Core Business Improvement District.
Continue reading Why In The World Did City Employees Avak Sarafian And Huizar Staffer Kevin Ocubillo Attempt To Get The Historic Core BID An Illegitimate Waiver From Its Statutory And Contractual Obligation To Disclose The Profits It Made From Slavery?!

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BIDs Benefit Immensely From Coercive Collection Of Mandatory Assessments And Complain Incessantly About Being Subject To The California Public Records Act. They Can’t Have One Without The Other, Yet Both Are Voluntary, So Why Don’t They Grow Up And Quit Whining About The Consequences Of Their Choices?

A business improvement district (BID) in Los Angeles1 is a geographical area in which the owners of commercial property are assessed an additional fee for various services that aren’t provided by the City. These fees are collected either by the City of L.A. via direct billing2 or, more usually, by the County of Los Angeles as an add-on to property tax bills.

The state law authorizing BIDs requires each BID to be administered by a property owners’ association (POA).3 In the normal course of things these organizations are conjured up by the City at the time the BID is established, although sometimes previously existing nonprofits will end up as a POA. One example of this is the Hollywood Chamber of Commerce, which serves as POA for the East Hollywood BID, although it predates its existence.

The law requires these POAs to be nonprofits, although it doesn’t specify what kind of nonprofit they should be. For various reasons, at least in Los Angeles, they are usually 501(c)(6) organizations. Because the City is handing over what’s essentially tax money to these POAs,4 they have a great deal of control over their activities and what they spend their money on.
Continue reading BIDs Benefit Immensely From Coercive Collection Of Mandatory Assessments And Complain Incessantly About Being Subject To The California Public Records Act. They Can’t Have One Without The Other, Yet Both Are Voluntary, So Why Don’t They Grow Up And Quit Whining About The Consequences Of Their Choices?

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The Story Of How The Central City East Association Evidently Violated City Ethics Laws Restricting Campaign Contributions, Gave Illegally To Mitch O’Farrell and Marqueece Harris-Dawson In 2015, Lied About It On Their Tax Form, And I Turned Them In To The IRS And The Ethics Commission

CCEA: The truth may be out there but it’s not out there on our tax forms.
This story begins with the fact that the Central City East Association, which runs the infamous Downtown Industrial District BID, contributed $700 each to two City Council candidate campaigns in 2015. The money was given to Mitch O’Farrell of CD13 and Marqueece Harris-Dawson of CD8. You can see the record at the City Ethics Commission and also if it’s more convenient, here is a PDF of the same information.

This turns out to be a huge problem for a number of unrelated reasons. First and most simply, the CCEA is a nonprofit 501(c)(6) organization. Unlike the more famous 501(c)(3) organizations, 501(c)(6) groups are allowed to engage in lobbying, but it’s unclear whether they’re allowed to support candidates for office.1 However, irrespective of any restrictions on donations, there are very clear reporting requirements.

Take a look at the CCEA’s 2015 tax form. In particular, take a look at question 3 of part IV, found on page 3 of the form. It asks unambiguously:

Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office?

And, as you can see in the image that appears somewhere near this paragraph, the CCEA unambiguously stated that they did not. It’s hard to imagine a less ambiguous form of direct political campaign activities than giving actual money, amirite? Hence I turned them in to the IRS and also to the Franchise Tax Board for this lacuna. Stay tuned in case anything happens!

And it turns out that there are some more subtle, but potentially equally serious, problems with these two donations involving various municipal laws. Turn the page for the highly sordid but highly technical details!2
Continue reading The Story Of How The Central City East Association Evidently Violated City Ethics Laws Restricting Campaign Contributions, Gave Illegally To Mitch O’Farrell and Marqueece Harris-Dawson In 2015, Lied About It On Their Tax Form, And I Turned Them In To The IRS And The Ethics Commission

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Further Speculation on Why BID Patrols Aren’t Registered with the Los Angeles Police Commission

This is not a police officer, it's unregistered-with-the-police-commission BID Patrol officer M. Gomez (Badge #148) looking a lot like a police officer.
This is not a police officer, it’s unregistered-with-the-police-commission BID Patrol officer M. Gomez (Badge #148) looking a lot like a police officer.
Recently I discovered that BID security contractors weren’t registered with the LA Police Commission and that no one seemed to know why. Further investigation suggested that perhaps registration had just fallen through the cracks. Well, after rereading the material from the Council file and requesting and receiving the Police Commission minutes from April 25, 2000, I noticed that there was at least one possibly significant difference in the April 25, 2000 version of LAMC 52.34 that the Commission sent over to the Council on April 27 as compared to the version that the City Attorney sent to the Council on March 31 and that it’s possible to make some kind of a case that this difference answers the BID security question. It’s not a likely case, though. Read on for details on both the potential argument and some potential objections to it.
Continue reading Further Speculation on Why BID Patrols Aren’t Registered with the Los Angeles Police Commission

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