Tag Archives: Zero Valuation Theory

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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How The City Of Los Angeles Arranges For Itself To Be Lobbied By BIDs Even Though The City Attorney Requires Most City Contractors To Be Explicitly Forbidden From Lobbying The City By Means Of A Contract Clause

Kerry Morrison not thinking of herself as a lobbyist, even though she does lobby and the City of Los Angeles encourages her to lobby.
Kerry Morrison not thinking of herself as a lobbyist, even though she does lobby and the City of Los Angeles encourages her to lobby.
Issues surrounding business improvement districts and the Los Angeles Municipal Lobbying Ordinance have been fraught with controversy at least since 2009, when the Los Angeles Ethics Commission submitted a comprehensive report to City Council proposing a series of reforms to the law.

One minor part of their proposal would have clarified without altering the application of these laws to business improvement districts which then, as now, are almost certainly required to register as lobbyists, even though none of them do nor have they ever. This minor clause in a major reform proposal kicked off a whirlwind of mouth-slavvery craziness on the part of the BIDs, which ended with Eric Garcetti effectively killing the CEC’s proposal in 2010 for no good reason other than that Kerry Morrison giggled at him in a committee meeting.1

So it was with a great deal of interest that I read in this Power Point thing from 2012 that, according to Miranda Paster, who is in charge of the division of the Los Angeles City Clerk’s office which oversees BIDs, that she considers part of her duties under the heading of “Optimal Government/Taxpayer BID oversight” to be to “encourage BIDs to lobby council members.”2
Continue reading How The City Of Los Angeles Arranges For Itself To Be Lobbied By BIDs Even Though The City Attorney Requires Most City Contractors To Be Explicitly Forbidden From Lobbying The City By Means Of A Contract Clause

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Why Carl Lambert’s Contributions To The Re-Election Campaigns Of Mike Bonin And Eric Garcetti Were Probably Illegal and Should Be Refunded Immediately

Mike Bonin on August 23, 2016, earning his salary, which should be sufficient.
Mike Bonin on August 23, 2016, earning his salary, which should be sufficient.
As I reported the other day, Venice Beach BID proponent and shady illegal hotelier Carl Lambert donated $1400 to Eric Garcetti and $700 to Mike Bonin in 2015. Here is an argument that they ought to give that money back to Lambert immediately.

Not just because it’s the right thing to do. We’re all grownups here, and that’s not so much why things get done. But because it’s probably illegal for them to have accepted the money, or at least for Lambert to have contributed it. To explain why this is the case I have to talk about the campaign finance laws of the City of Los Angeles, which can make anybody’s poor head spin. So forgive me, but perhaps you’ll find it worth the trouble. The whole law is at LAMC Article 9.7, but it’s not necessary to read the whole thing.1 The section we are interested in today is LAMC 49.7.35, which covers Bidder Contribution and Fundraising Restrictions. This muni code section2 implements Section 470 of the City Charter, which covers Limitations on Campaign Contributions in City Elections.3 At Charter Section 470(a) we find this noble statement of the purpose of the whole thing:

The purpose of this section is to encourage a broader participation in the political process and to avoid corruption or the appearance of corruption in city decision making, and protect the integrity of the City’s procurement and contract processes by placing limits on the amount any person may contribute or otherwise cause to be available to candidates for election to the offices of Mayor, City Attorney, Controller and City Council and promote accountability to the public by requiring disclosure of campaign activities and imposing other campaign restrictions.

Now, it is a fundamental principle in the American legal system that actions can only be illegal if there is an explicit statutory statement that they are illegal. Otherwise they’re legal. So while this statement of purpose has some force, mostly as a guide to interpreting the salient laws, it doesn’t in itself make anything illegal. Obviously Carl Lambert’s contributions to Garcetti and Bonin create the appearance of corruption in city decision making, but if that were sufficient to trigger a criminal prosecution then pretty much every donor to every incumbent candidate would have to be locked up.4 Thus we have to look to the parts of the law that implement this statement of purpose.

The Charter Section that we are interested in here is 470(c)(12)(B), which states in pertinent part5 that:

The following persons shall not make a campaign contribution to the Mayor, the City Attorney, the Controller, a City Council member, a candidate for any of those elected City offices, or a City committee controlled by a person who holds or seeks any of those elected City offices … A person who bids on or submits a proposal or other response to a contract solicitation that has an anticipated value of at least $100,000 and requires approval by the elected City office that is held or sought by the person to whom the contribution would be given…

Let’s run through the elements of the law here to see why it’s highly plausible that it forbids Carl Lambert from making contributions to either Eric Garcetti or Mike Bonin:
Continue reading Why Carl Lambert’s Contributions To The Re-Election Campaigns Of Mike Bonin And Eric Garcetti Were Probably Illegal and Should Be Refunded Immediately

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