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

Now, it’s no surprise at all that the BIDs do in fact lobby the City. They meet regularly with City staff to advocate for their positions. They speak in meetings, at Council, before committees, and so on. They write innumerable letters taking sides on every imaginable issue before the City. What’s surprising here is that Miranda Paster uses the actual word “lobby” to describe what they do. Not only are the BIDs horrified that anyone would call their activities lobbying,³ but, as noted above, none of them are registered with the City as lobbyists. I have no doubt that the law as it stands requires BIDs to register as lobbyists,⁴ so why is Miranda Paster, whose job includes overseeing the activities of BIDs,⁵ not at least telling them to register?

And even more interesting is the fact that most other City contractors are explicitly forbidden from using money from their contracts to lobby the City. For instance, take a look here at contract C-127833. This is a contract between CD13 and PATH⁶ to provide “street outreach services” to homeless people in CD13. But check out paragraph 13 on page 5:

None of the funds furnished by the CITY hereunder shall be used to support or defeat any candidate in any public election, nor to support or dereat any legislation, initiative, referendum, constitutional provision, administrative regulation, or administrative ruling, nor for any other for form of political activity or lobbying.

So, given what goes on with BIDs, it’s curious that this clause is in this contract, and it’s in an awful lot of other City contracts as well, but it is pointedly NOT in the contracts that the City signs with BIDs. So what’s going on here? Well, the contract was with CD13, so I fired off an email to Mr. Hollywood himself, Daniel Halden, asking him what was going on. He told me that I should get in touch with the Clerk’s office,⁷ which I did. Accordingly, the ever-helpful John Chavez told me:

Paragraph 13 is included in all contracts because it is part of the boilerplate language the Office of the City Attorney directs be in place for all contracts.

So now the question shifts. Why is this language not found in BID contracts? I have not yet been able to track down an answer. However, I will speculate that the reason is related to the infamous “zero valuation theory.” This is evidently⁸ a means by which the City excludes BIDs from any number of requirements for other contractors, including, e.g., the Contractor Performance Evaluation Ordinance. The theory is that since, in theory, BIDs are funded by property owners’ assessments, they don’t cost the City any money. That is, they’re of “zero value” to the City, and therefore… well, therefore BIDs aren’t subject to any of the usual rules that contractors are subject to. Perhaps that includes this one.⁹

But whatever the reason how, the reason why is much, much more clear. We’ve seen over and over again how useful the lobbying activities of BIDs are to the City. BIDs provide a sort of Greek chorus for the City Council, showing up and imploring them to do whatever they were going to do anyway, but making it look on the record like there’s some kind of community support. They meet with Council staff and also arrange high-stakes fundraisers if things go their way. Councilmembers actually solicit BIDs to write letters supporting or opposing this or that initiative to provide them with cover. But this isn’t surprising. Obviously in-house auto-lobbyists are useful for politicians. What is surprising is that, somehow, the Ethics Commission hasn’t managed to investigate any BIDs… yet.

Image of Kerry Morrison is ©2016 MichaelKohlhaas.Org.

1. Obviously there was more than giggling involved, but it was essentially at Kerry Morrison’s arbitrary, short-sighted, and ignorant behest that Eric Garcetti did in the proposal.
2. The Power Point thing is from the International Downtown Association‘s 2012 conference, at which Miranda Paster participated in a workshop entitled “How Cities Encourage BIDs: Trends and Challenges.” The relevant material is on slide 16.
3. See Kerry Morrison’s impassioned 2010 speech at the ill-fated committee meeting discussed above, where, in her inimitably self-absorbed style, she proclaimed: “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.” “Heather” is Heather Holt, by the way, now, although not at that time, Executive Director of the Ethics Commission. Kerry Morrison doesn’t like to be called a lobbyist, even though she admits in the same sentence that she is a lobbyist. So why is Miranda Paster calling her a lobbyist? A failure of communication, no doubt.
4. I’ve filed complaints with the Ethics Commission based on this theory, which are still pending. Given that it took them ten months to resolve this comparatively much simpler complaint, and given that my lobbying complaints about BIDs were filed after the Rumsey matter, I don’t expect action on this matter any time soon. You’ll certainly hear about it if anything happens, though!
5. Indeed, in that same Power Point thing, on slide 15, Miranda Paster claims that it’s a role of her office to serve as an “objective observer” in the process of administering BIDs. So if she sees, as the claim about lobbying suggests that she does, that BIDs are breaking the law, one wonders why she’s not encouraging them to follow it, especially because breaking the law can have extremely dire consequences for BIDs in California.
6. People Assisting the Homeless.
7. By the time these events were occuring, Mr. Dan Halden was getting pretty sick of me, I think. Things have only gotten worse by now. But the information keeps, as it must do, flowing, so one can hardly complain too much.
8. I can’t be sure. For obvious reasons no one will tell me straight out. But there are hints.
9. This theory is surely not sound. First of all, the City collects the assessments, which are involuntary, by force of law. That surely makes the assessments like taxes. But contracts paid with taxes cost the City money, one would say. But why? Taxes are just people’s money, the City collects them and then spends them to provide services to people. How does the exact same argument not apply? And yet all contracts aren’t zero value contracts. Furthermore, the City does pay money to most BIDs through its assessed property. The threshold on these things is usually $100,000, and the City doesn’t pay that much to most BIDs, but it does pay far more than that much to other BIDs. It may be that the anomalously high City assessment for the Venice Beach BID will make it an ideal test case for challenging the zero valuation theory. We shall certainly see.