Relatively Complete Set Of Records Pertaining To Ongoing San Pedro Historic Waterfront BID Renewal Process Reveals Hitherto Unknown Details About Costs, Hours, Contract Terms, Etc. Heralding Plausible Case Against Edward Henning For Failure To Register As A Lobbyist But Not, Unfortunately, Against The BID Because They’re Not Paying Him Enough

Last month I learned that the San Pedro BID was paying Edward Henning $20,000 to handle their BID renewal process. This discovery was independently interesting, but also important for my ongoing research project of learning everything possible about BID consultancy with the ultimate goal of shopping as many BID consultants to the City Ethics Commission as possible, mostly for violations of LAMC §48.07, which requires that “[a]n individual who qualifies as a lobbyist shall register with the City Ethics Commission within 10 days after the end of the calendar month in which the individual qualifies as a lobbyist.”

In this clause, someone “qualifies as a lobbyist” when they, according to LAMC §48.02 are “compensated to spend 30 or more hours in any consecutive three-month period engaged in lobbying activities.”1 Note that today I’m mostly skipping the argument that BID consultancy qualifies as lobbying activities, but you can read about it in excruciating detail here.

Part of the evidence that I obtained last month were these two invoices from Edward Henning to the SPHWBID. As you can see, they span the time period from March 2016 through December 12, 2016 and bill for a total of 75 hours. That’s roughly 7.5 hours per month if distributed evenly across the billing period. This is not enough evidence to show that Edward Henning was required to register. In fact, if he did work about 7.5 hours a month he would not have been so required.

It’s precisely that issue that today’s document release shines some light on. The other day, San Pedro BID executive directrix Lorena Parker was kind enough to send me over 100 emails to and from Edward Henning.2 At first I thought I’d be able to pick out 3 consecutive months in which Edward Henning was compensated for 30 hours by assuming that the number of emails in a month was proportional to the number of hours worked. This didn’t pan out for a number of reasons, not least because I don’t yet have emails between Edward Henning and the City of LA that weren’t CC-ed to Lorena Parker. I can tell from internal evidence that there are some of these,3 and I have a pending CPRA request for them, but they’re not yet in hand.

Read on for more detail on the unregistered lobbying case as well as a new theory that I thought at first might actually get the BID itself in some trouble rather than just the consultant. I don’t think it’ll work out in this particular case, but it has interesting implications for the future. Bad scene for the BIDdies and lulz4 all round for humanity!

All is far from lost, even if the email-counting theory didn’t work out.5 If you read through the emails from October through December, especially this one from October 21, in which BID analyst Rick Scott asks Lorena Parker: “Any idea when we might receive the first draft of the 2018 MDP/ER?”6 it’s a fair deduction from their contents that Edward Henning started his actual work on the MDP and the ER in October 2016. Then, of course, on December 13, 2016 he billed the BID for 45 hours of work on the MDP and the ER.

It’s therefore pretty darn likely that he worked that 45 hours during the three consecutive months between October and December, and that therefore he was required to register as a lobbyist. Because he did not, the argument goes, he’s in violation of the Municipal Lobbying Ordinance. I’m waiting to write a complaint, though, until I receive the rest of the relevant records since It’s likely that they’ll support an even stronger case.

Now, as part of the contracts that they sign with the City, BIDs are made subject to the City’s Contractor Responsibility Ordinance, found at LAAC §10.40 et seq.7 This is a complicated piece of legislation, but the gist of it is that contractors have to follow all applicable laws and, if they don’t, there can be adverse consequences with respect to their being able to enter into future contracts with the City.

Also they have to warrant that their subcontractors follow all applicable laws. Ultimately I’d like to be able, not only to nail BID consultants for unregistered lobbying, but the BIDs themselves for failing to ensure that their subcontractors, the consultants, were in compliance with the Municipal Lobbying Ordinance. However and unfortunately, though, it’s not going to work in this case.

First of all, here is the contract that the San Pedro BID signed with the City.8 Section 32 states in part that:

Unless otherwise exempt in accordance with the provisions of this Ordinance, this Agreement is subject to the provisions of the Contractor Responsibility Ordinance, Section 10.40 et seq., of the Los Angeles Administrative Code…The Corporation further agrees to…ensure that its subcontractor(s), as defined in the Ordinance, submit a Pledge of Compliance
[with all applicable laws]

The clause in the CRO that requires contractors, and therefore BIDs, to comply with all applicable laws is LAAC §10.40.3. Paragraph (a) states that:

Contractors shall comply with all applicable federal, state and local laws in the performance of the contract, including but not limited to laws regarding health and safety, labor and employment, wage and hours, and licensing laws which affect employees.

And the relevant clause with respect to subcontractors is found in paragraph (e):

Contractors shall ensure that their subcontractors complete a Pledge of Compliance attesting under penalty of perjury to compliance with Paragraph (a) of this section, unless the subcontract is below the threshold requirements for Contracts contained in Section 10.40.1(b).

However, note the qualifying statement that this only applies if the subcontract is above the threshold given in §10.40.1(b) This states in pertinent part that:

Contracts for services and for purchasing goods and products that involve a value in excess of twenty-five thousand dollars ($25,000) and a term in excess of three months are covered by this Article. Construction contracts are covered by this Article without regard to contract amount and term.

But recall that the BID is only paying Edward Henning $20,000 for his services. Thus, although it’s very likely that he is in violation of the Municipal Lobbying Ordinance for his failure to register with the Ethics Commission, because he comes so cheap, the BID itself is off the hook for his crimes.9

Note though that, as we’ve seen previously, Edward Henning’s price is extraordinarily low for a BID renewal. The famous Urban Place Consulting is is charging the Fashion District $55,000 for the same process. Also, although the evidence is as yet incomplete,10 it seems that the famously shadowy one herself, Tara Devine, charges $80,000 for handling a renewal. This puts not only the consultants in danger of having violated the Municipal Lobbying Ordinance, but also the BIDs that hired them in danger of having violated the Contractor Responsibility Ordinance, which would be a thrilling development indeed!

  1. It’s also required that during that time they contact at least one City official at least one time in order to be required to register and that this contact be part of an effort “to influence municipal legislation.” “Municipal legislation” is itself a technical term, also defined at LAMC §48.02. I don’t discuss all this in this post because these elements of the statute are trivially satisfied by all BID consultants. An exceedingly detailed discussion of these issues can be found here.
  2. She sent me an mbox file, thank you so much LP!! and I exported it as PDFs and as EMLs and I also extracted all the attachments separately. All of these file formats are available on Archive.Org.
  3. For instance, in this email from December 12, 2016, Edward Henning states: “Hello all – here is a slightly revised MDP based on 2 rounds of numeric corrections per Dennis’ comments. Also attached is the 1st submittal of the ER.” However, there are no emails in the corpus that have to do with Dennis Rader’s comments. Thus it’s likely that Edward Henning was communicating with the Clerk’s office on a side channel. His contract with the BID makes all such communications the property of the BID and therefore subject to CPRA, so I should have them soon enough; Lorena Parker is one of the good BID EDs when it comes to CPRA compliance, thank goodness, and unlike some semi-literate crazed über-redactrices 20 miles north of her that I could name!
  4. That’s what kids these days call schadenfreude, friends, and schadenfreude is our bread and butter round these parts!
  5. It may still work out when the rest of the emails come through. As always, stay tuned.
  6. MDP is “Management District Plan” and ER is “Engineer’s Report.” Both of these incredibly complex documents are required by state law in the form of the Property and Business Improvement District Law of 1994 for the BID renewal process to move forward.
  7. As always, it’s really the property owners association that signs the contract rather than the BID. If you don’t know what I’m talking about, it’s a distinction that’s OK to ignore in almost every case, although not in every case. It’s OK in this case.
  8. This is the same as the contract that every other BID signs. They’re completely standardized across BIDs.
  9. At least with respect to the Contractor Responsibility Ordinance. There may well exist other hitherto undiscovered laws which will put them back on the hook.
  10. But I’m working on it, oh, how I am working on it!
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