The MLO at the time (and now) defined a lobbyist as someone who is paid for engaging in 30 hours of lobbying activity over three consecutive months, and required lobbyists to register with the Ethics Commission and pay a small fee. This was (and is) difficult to enforce, not least because it’s hard to know who’s spending 30 hours and who’s just spending 29.9. Thus one of the major parts of the Commission’s proposal was to redefine a lobbyist as someone who made a specified number of contacts3 with city officials in an attempt to influence municipal decision-making on behalf of a third party. They balanced this with a number of new proposed exemptions to what constituted lobbying activity. Most prominent among these was the exemption of speaking at a public meeting which then (and now) counted as lobbying.
This report contained some very specific language concerning BIDs, but it argued only that BIDs should continue not to be exempted from the MLO.4 So the MLO at the time did not mention BIDs either to include or to exclude them from the law. Thus they were subject to the MLO, although BID representatives who made public comments seemed to think that they weren’t and that the proposal was to make them subject to the law.5
In July 2010 the Chief Legislative Analyst filed a five page report analyzing the CEC6 proposal and making recommendations to the Committee. On July 28, 2010, the Committee, chaired by Eric Garcetti, who was joined by Councilmember Janice Hahn,7 considered the reports. You can listen to a recording of the meeting here.8 The discussion begins at 2:22 with Garcetti and Hahn questioning then Commission Director of Policy and Legislation Heather Holt9 about the proposal. Both Garcetti and Hahn are skeptical with respect to proposed exemptions for 501(c)(3) organizations. The discussion of BIDs begins at 25:48 when Garcetti, who’s obviously had this on his mind because he brings it up unprompted and apropos of nothing at all, says to Holt:
Can you walk us through the BIDs as well, like, what the interpretation of what a business improvement district is, I mean, quasi-public, quasi-private, but…logic behind that?
Holt outlines the proposal, which is basically not to change the status of BIDs under the MLO. At 29:15 Janice Hahn checks on this:
And you said currently, currently how do they fit in?
Currently they are subject…there’s no categorical exemption for them, either under the current law or under the proposal.
Hahn: So nothing changes for them?
Next Eric Garcetti, in a lengthy speech, essentially dismissed the entire proposal because it would require BIDs to register as lobbyists (complete transcription below).
- He sarcastically hinted that it would require Councilmembers to register:
…it then becomes difficult for us to figure further in there, what are we trying to protect the public from and what do they need to know, because at the end of the day we’re paid advocates who take positions on things ourselves, and, you know, argue for them. I mean, you can take it to the extreme and, you know, I’ll make sure Janice registers if I register, and you can talk about when we meet with each other.
- He played the big government card:
…then we become Council members and we inherit this backpack of things that just make life difficult for people who are trying to do some simple things out there. It’s kind of government getting in the way, and it’s difficult to unwind those.
- He mocked the proposal as facile idealism, ignoring the fact that it would actually have made compliance easier rather than more difficult:
It’s very easy to just take the ethical stance of just go as far as you can this way because that’s the most ethical thing, when I think, in reality, over the time I’ve been here the most ethical thing is to make things both properly disclosed and easy enough for people to access what they need to in a democracy without making it a really difficult thing.
- And he used one of Kerry Morrison’s pet projects as an example of how BIDs aren’t lobbyists:
Of course they [BID staff] earn a salary, but it’s not like when they come to city hall they’re not going to get the extra $20,000 bonus if they get the alleyway in Cahuenga done. It’s just something that we believe in.
- I want to add just maybe a couple of things that they did not bring up. One is that we are typically 501(c)(6) organizations, so we’re not going to fall under a nonprofit exemption if one even exists any more. And also we already do pay fees to the City.
Under the MLO lobbying entities have to pay some nominal fee to the Ethics Commission. Like under $500. See how Kerry acts as if the problem is the payment of the fee. It’s not. And see how she’s about to start whining about how much money BIDs pay to the City? This time, though, with friend Eric at the wheel, things take a slightly more giggly turn than usual:
- We pay anywhere from one to two percent of our assessment, so for example, on a $3.4 million in Hollywood we pay $34,000 a year already on an annual basis to the City Clerk to help compensate for their oversight of the voluminous materials that we send in for…
Eric Garcetti: [unintelligible] thanks you for that…
Kerry Morrison: [giggling]…uh, yeah.
Ah, sigh, right? No dignity. Not even the pretense of dignity. Also, it’s perennially interesting to me how much the BIDs harp on about the money they spend, as if it were some kind of charitable contribution rather than them covering the nominal cost to the City of administering their existence, which is purely voluntary on their parts.12
- And I know, and Heather has said “you know, you shouldn’t consider the label of a lobbyist being a bad thing.” But it does have a certain connotation, as you were describing before. We see ourselves as paid staff advocating for a community. I am advocating right now.
Well, sure, more minimization. “I am advocating right now.” That’s true, Kerry. You were advocating right then. And under the MLO in force then (and now) that advocacy counted as lobbying activity. Interestingly, under the proposed revisions it would have been exempt. Also, isn’t it fascinating how she thinks the way she sees herself, the way her colleagues in the BID business see themselves, is somehow relevant to the question of whether they’re violating the lobbying law? I wonder how all those people the BID patrol arrests for e.g. sitting on the sidewalk see themselves? No one asks them, though, because no one cares.
- You know, we lack civic engagement in this country. Whether it’s just, you know, a decline in voting, a decline in participation, and a lot of what we do is to encourage civic engagement, the letters, participating in committees, and just being aware of what’s going on in government and meeting with elected officials and meeting with agency folks and I think this is going to create a chilling effect.
She’s so confused!13 What is the “this” of which she speaks? It must be the MLO revision that she’s in the process of commenting on, but recall what it’s about. It’s to redefine who qualifies as a lobbyist by how their lobbying activity is counted. What counted as lobbying activity would have been made less stringent by this proposal. So how is, e.g., no longer counting speaking at a public meeting as lobbying going “…create a chilling effect?” It’s nonsensical.
- It certainly…I’ve been told now based on describing my day, and I echo what Estela said, you’d have to have a daily diary of what I do, it would look like this, for one week. It will create gridlock for us to not only compile the data, but I think for the Ethics Commission staff to evaluate the data.
See how she’s riffing off of Eric’s bitching about how the proposal is some kind of big government conspiracy to impede people who live in the real world? She’s utterly mischaracterizing the proposal, though, by pretending that it would require a log of all lobbying activity. In fact, it clearly states something quite different:
Requiring lobbyists to also provide information about their qualifying lobbying contacts provides more thorough public disclosure and indicates the lobbyist’s registration deadline by identifying exactly when the individual qualified as a lobbyist. The information that is provided regarding the lobbying contacts should include each lobbying contact prior to registration, the dates of the contacts, the City agency that was contacted, the municipal decision at issue, and—for lobbying organizations—each employee who engaged in the contacts. For persons who elect to preregister…the Commission recommends requiring a statement that the requisite number of contacts has not occurred as of the date of registration.
You see how there’s no requirement to provide information about all lobbying contacts? Just the ones that trigger the registration requirement, which means no more than five. How was this going to cause “gridlock?”
This last bit is especially ironic, since (a) the Cahuenga alley thing is an actual project that Kerry Morrison lobbied for with Garcetti and (b) Kerry Morrison did in fact receive a substantial bonus in 2010 (and most if not all other years) for performance, which surely included her work on this alley and her other lobbying projects.10
Finally, after public comments from Carol Schatz (45:21), Misty Iwatsu (49:55), Gary Russell (51:50), Russ Brown (55:00), and Estela Lopez (58:15),11 Mr. Garcetti calls on his buddy Kerry Morrison.
It’s worth listening to the tone of the meeting at this stage. That’s Estela Lopez giggling giddily before he calls on Kerry in a most familiar way. She then proceeds to miss the point about everything in every possible way. As usual, though, it doesn’t matter. The fix is in. And thus spake Kerry Morrison (complete transcription below):
The point (as usual) seems to be that the BIDs objections, Kerry’s objections, none of them actually had to make sense, because the fix was in with Eric Garcetti, who ran a giggly love-fest of a meeting and then didn’t take any more action on the proposal, none at all, until it automatically expired in August 2012. The ironic twist here is that BIDs were and are still subject to the MLO. It’s true that the 30 hours is harder to pin on them than the five contacts would have been, but on the other hand, the wider definition of lobbying activities that count towards the time qualification remains in force. And even though no one seems to have ever pinned an unregistered lobbying beef on a BID, it certainly doesn’t mean it’s never going to happen. Stay tuned!
Garcetti’s speech at 29:32:
Um, OK. I know we have a number of public comment cards. Before that I just want to add a little bit more discussion and a tiny bit more questioning. I think it’s better, actually, for the public comments to come after this so we can have some context and have some time to think things through. First of all, let me thank the Ethics Commission, the Ethics Commission staff for…this is a really tough problem to deal with, and I think all of us want to have the right sort of disclosure. I mean, I hope we do. Maybe some people in this room don’t, but I certainly do as chair of this committee, and I think all of us want to have greater disclosure in terms of knowing who’s advocating about what. I also think that we’re trying to define something that is so slippery and difficult to figure out. I mean, it’s like the supreme court case, and my apologies to lobbyists, about pornography. It’s difficult to define but you know it when you see it. Well, I think for us, we know when we see a lobbyist as opposed to when we see people who are lobbying for something. And, I think you have a lot of people in this room who are like wait a second, I’m not a lobbyist, I’m an advocate, and I work in different groups, and whether it’s a nonprofit that’s…business community, or a nonprofit working on behalf of antipoverty, or a nonprofit working on behalf of unions. To me it’s always, there’s always been a different threshold, and I appreciate that there’s a different threshold in terms of the number of visits and the fee. So, acknowledging that, and that we share that there is some sort of differentiation, it then becomes difficult for us to figure further in there, what are we trying to protect the public from and what do they need to know, because at the end of the day we’re paid advocates who take positions on things ourselves, and, you know, argue for them. I mean, you can take it to the extreme and, you know, I’ll make sure Janice registers if I register, and you can talk about when we meet with each other. But, there is, I think it’s incumbent upon us to be very precise about what we’re going to define here, and to do some thinking that is really embedded in the real world. While I like the dynamic between our Ethics Commission and Council is Ethics Commission, I think, often thinks things through in a pure way, Council members [mumbles] and you’re in some ways more versed and know the law and know the precedents around the country and other systems better than we do. We then live in the world of like actual provision of services to people, and we know that the best intended rules are what we spend most of the day trying to get through in all the other areas of what we do. Because there’s no laws, rarely are there laws that are poorly intended, but then we become Council members and we inherit this backpack of things that just make life difficult for people who are trying to do some simple things out there. It’s kind of government getting in the way, and it’s difficult to unwind those. It’s very easy to just take the ethical stance of just go as far as you can this way because that’s the most ethical thing, when I think, in reality, over the time I’ve been here the most ethical thing is to make things both properly disclosed and easy enough for people to access what they need to in a democracy without making it a really difficult thing. And so that’s the balance I want to strike as we, you know, dig down into this issue. So that’s all I kind of want to say just as some principles, but I do have, I think there’s some excellent stuff in here and I also have some things where I’m still chewing through, you know, five contacts are better than one but it’s a pretty irrelevant division for me because, you known, anything of substance will have five contacts. So you’re going to catch so few people between one and five. So it’s kind of, it’s almost like saying “you’re different” without making it really different substantively in terms of the practice. You know, nonprofits versus, I know a lot of people have always said this about neighborhood councils too, which is why we, at least I’ve pushed strong for disclosure in neighborhood councils, and maybe, a number of neighborhood council folks I know have supported that because at a certain point you can either be paranoid that any organization that’s a nonprofit or a neighborhood council or even City Council, as we’re often accused of can be infiltrated by the special interests. But on the other flip side I think there is something different from that pure lobbyist, who is like, here’s my shingle, hire me, and I’ll advocate for you on whatever versus somebody who takes a job and something they believe in with an organization. Of course they earn a salary, but it’s not like when they come to city hall they’re not going to get the extra $20,000 bonus if they get the alleyway in Cahuenga done. It’s just something that we believe in. So I still want to tread that area, and I think that’s where most of the discussion and opposition and ideas in this room come from folks out there in the real world as well and so I’m anxious to hear that, but I don’t know if you want to add anything before we hear from some of those folks?
Kerry Morrison’s comments at 1:01:34:
Eric Garcetti: Alright, um, Kerry.
Kerry Morrison: Thank you. My name is Kerry Morrison. I’m the executive director of the Hollywood Property Owners Alliance and the Central Hollywood Coalition managing two business improvement districts, the Hollywood Entertainment District and the Sunset & Vine B.I.D. I will not reiterate the comments that my colleagues have already made about the level of transparency and the requirements of our city contract. I want to add just maybe a couple of things that they did not bring up. One is that we are typically 501(c)(6) organizations, so we’re not going to fall under a nonprofit exemption if one even exists any more. And also we already do pay fees to the City. We pay anywhere from one to two percent of our assessment, so for example, on a $3.4 million in Hollywood we pay $34,000 a year already on an annual basis to the City Clerk to help compensate for their oversight of the voluminous materials that we send in for…
Eric Garcetti: [unintelligible] thanks you for that…
Kerry Morrison: [giggling]…uh, yeah. And also, all of the BIDs collectively in the City, I believe the aggregated contribution arguably taking care of municipal services is about $24 million dollars a year. So the partnership that we are in is one…that’s how we view it. And I know, and Heather has said “you know, you shouldn’t consider the label of a lobbyist being a bad thing.” But it does have a certain connotation, as you were describing before. We see ourselves as paid staff advocating for a community. I am advocating right now. Last comment I want to make, and I think you raised some good comments about just the public policy aspects of civic engagement. You know, we lack civic engagement in this country. Whether it’s just, you know, a decline in voting, a decline in participation, and a lot of what we do is to encourage civic engagement, the letters, participating in committees, and just being aware of what’s going on in government and meeting with elected officials and meeting with agency folks and I think this is going to create a chilling effect. It certainly…I’ve been told now based on describing my day, and I echo what Estela said, you’d have to have a daily diary of what I do, it would look like this, for one week. It will create gridlock for us to not only compile the data, but I think for the Ethics Commission staff to evaluate the data. And also confusion about, even today I think it was a little difficult to answer some of your very good questions about whether something is…really constitutes lobbying or not. So I would think the safest course of action here is to do a categorical exemption of the organizations that manage business improvement districts and their paid staff. Thank you.
Image of cozy Eric and Kerry is a public record.
- City commissions, such as the CEC, can recommend changes to the ordinances that govern them. Generally these recommendations then go to the City Council for action.
- I hope to discuss these preliminary meetings in a future post. Meanwhile, I put one of the relevant CEC meetings up on the Archive, and also a bunch of other information about the meetings, including agendas and minutes for (I think) all of them at which the proposal was discussed.
- The proposed number varied with type of lobbyist in a relatively technical way. I’m skipping such details for the sake of clarity, but you can read about them for yourself in the actual report.
…the Commission determined that BIDs can–and often are required to–engage in advocacy on behalf of the business owners within their districts. Several BID executive directors stated that they interact on a regular and sometimes daily basis with City officials, urging them to take actions to benefit their districts. Furthermore, the issues they discuss with City officials are not limited to requesting City services, which is an exemption the Commission recommends based on initial input from BID representatives. See section VI.B, above. Instead BIDs also engage in issues such as homelessness, billboards, newsracks, liquor licenses, and other policy matters with far-reaching implications.
It is appropriate for BIDs to have particular views regarding municipal decisions–that is why they exist. However, the Commission does not believe that their attempts to influence municipal decisions are any different from attempts made by other entities that advocate on behalf of distinct constituencies. The public has as great an interest in knowing how BIDs are affecting government as they do in knowing how other corporations are. Therefore, the Commission recommends against a categorical exemption for BIDs.
- Interestingly, they are still subject to the current MLO (according to Mark Low, Lobbying Program Manager at the Ethics Commission, who told me this in an email) although, as far as I can tell, no one has ever tried to make them register as lobbyists. None of them are currently registered, anyway.
- City Ethics Commission.
- Herb Wesson was on the Committee, but he was not present at that meeting.
- There is also a recording on the City’s website, but it has 6.5 hours of silence at the end of the recording, which I’ve edited out in the version linked to here.
- Now executive director of the Ethics Commission.
- See HPOA Board minutes, December 2010.
- These are all worth listening to. I hope to transcribe at least a couple of them and write on them later, but I couldn’t see a reasonable way to fit them into this post.
- Not only is it not, but I’m sure that if it were possible to do an accurate accounting, at least Kerry’s two BIDs are certainly costing the City more than the amount they spend due to, if nothing else, all the people they arrest and subsequently hand over to the LAPD for processing. It also amazes me that it’s so hard to find out how much that costs the City. It’s almost like the BIDs and the LAPD have something to hide.
- Although at least Kerry and I agree that civic engagement is a good thing, even if we disagree completely on what constitutes civic engagement. Not this blog, e.g., for you, Kerry?