The Fascinating Story Of How It Took Three Months And A Demand Letter From An Attorney To Get Rena Leddy To Disclose That The Fashion District BID Is Paying Steve Gibson Of Urban Place Consulting $215 Per Hour For BID Renewal Consulting, Which Is Less Than Larry Kosmont Gets But More Than Ed Henning

Late last year it occurred to me that BID consultants, who help BIDs with the City processes necessary to establish or renew a BID, are essentially engaging in lobbying activity as defined in the Municipal Lobbying Ordinance at LAMC §48.02 and yet none of them1 seemed to be registered with the Ethics Commission as required by LAMC §48.07(A).

I then spent months piecing together over 100 pages of evidence to show that BID consultant Tara Devine had violated this law. Subsequently it occurred to me that the contracts that the consultants sign with BIDs would provide essential evidence that they’d been acting as lobbyists, so I determined to request these from many renewing BIDs. This led me to the discovery, thanks to the incomparable Laurie Hughes of the Gateway to LA BID, that GTLA’s BID consultant, Larry Kosmont, actually was registered as a lobbyist and had disclosed his BID consultancy as lobbying in his required reporting. The San Pedro BID is also up for renewal, and has recently released a fairly complete set of BID renewal records.

This brings us to the Fashion District. On February 21, 2017 I emailed Rena Leddy to request, among other material:

… all records associated with the renewal process, including but not limited to communications between the BID and the consultant and/or the engineer, contracts with and invoices from the consultant or the engineer, materials prepared by the consultant or the engineer for the renewal process, databases and mailing lists prepared or used by the consultant or the engineer, and also any communications between the consultant and the engineer that aren’t already responsive to the first part of this request.

The story of what happened after that stretched out over three months and generated many many megabytes of discussion. Read on for a (far too) detailed and exceedingly well-documented narrative recounting, complete with a happy, happy ending!

On March 30, in response to this request, Rena Leddy emailed me a copy of the contract. This, although I didn’t know it at the time, was the first of three distinct copies I was ultimately to receive in response to this request. In the email to which this was attached, as you can see, Rena Leddy didn’t claim any exemptions or indicate in any way that this copy was not complete:2
Attached is the 2nd part of your request. Consultant contract and invoices to date.

But take a look at Section III, paragraph 1 (page 2) of the contract. It says, just as plain as day, that:

Consultant shall receive compensation, including reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit “B” attached hereto.

But there is no Exhibit “B” attached unto the PDF sent to me by Rena Leddy, and she didn’t mention anything about withholding it. So On March 31 I emailed her again, asking what the heck was going on:

Good morning, Rena. Exhibit “B” seems to be missing from the contract. Is this an oversight? Is there some other document which gives UPC’s rates?

No answer, so on April 10, I sent yet another email asking what was up with the contract:

can you let me know if Exhibit B from the contract with Urban Consulting is (a) non-existent, (b) exempt for some reason, or (c) something else?

A couple of days later she wrote back, for the first time stating actual exemptions:

I have determined that Urban Consulting’s contract contains information that constitutes proprietary and/or trade secret information and the public benefit in non-disclosure does not outweigh the public benefit in disclosure under California Government Code § 6254(k) and 6255. In addition, I determined the detail pertaining to the task to be performed and the time allotted constitutes management’s deliberative process and is also subject to redaction. I have not redacted the budget for the contract.

At this point she also sent me a copy of Exhibit “B” but with everything except the total value of the contract redacted. She seems to be relying on the putative trade secret claim to redact Steve Gibson’s hourly rate and the hourly rate of his subordinates and the putative deliberative process3 thing to redact the numbers of hours involved in each stage of the renewal process.4

Oh, friends, where to start? This is unmitigated bullshit of the first water. There is literally nothing in this passage that actually makes sense. Let’s look at this in detail, though. First of all, see how she cites §6254(k) with respect to “proprietary and/or trade secret information”? This section doesn’t explicitly mention anything of the kind, stating an exemption for records “the disclosure of which is exempted or prohibited pursuant to federal or state law, including, but not limited to, provisions of the Evidence Code relating to privilege.”

The Evidence Code refers one to the Civil Code, which, at §3426.1(d), gives the following definition of trade secrets:5
(d) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and

(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

So Rena Leddy seems to be claiming that Steve Gibson’s hourly rate meets this definition. This makes zero sense, though. Things that meet the first criterion are like the secret formula for Coke. If other people knew them, they’d be able to make perfect counterfeit Coke and thereby “obtain economic value from its disclosure or use.”

And the second criterion is crucial as well, joined as the criteria are in the definition by the word “and” rather than the word “or.” If some information is really a trade secret, its owners will try to keep it secret. They won’t just rely on after-the-fact assertions that it was meant to be secret. Just for instance, in this excellent article from Los Angeles Magazine about the ruinous gentrification of Grand Central Market, Peter Wojcik, fish-smoker extraordinaire with Wexler’s Deli explains to a reporter with respect to the dry rub they use as part of the fish-smoking process:6
“You’re not going to copy this, right?” Wojcik warns. He later apologizes, explaining that the precise blend is “like the secret scrolls” and never shared without a nondisclosure agreement.

But read the contract again. There’s a long passage in there in Section V, paragraph 3 (page 4) about how everything that the BID lets UPC use is confidential, but there is exactly nothing about how Steve Gibson’s hourly rate is confidential. There’s no nondisclosure agreement, nothing.

Furthermore, it’s not actually possible that the guy’s hourly rate could be secret. To assert that it is is to assert that he expects his clients to sign up for his services without knowing how much he charges. Otherwise he’d have to reveal his top-secret rate to potential clients in the absence of an agreement, which he certainly wouldn’t do with trade secrets. These are some of the reasons why Rena Leddy’s argument about Steve Gibson’s hourly rate being a trade secret fails.

Which brings us to the so-called deliberative process privilege. This is a court-created interpretation of the so-called catch-all exemption to be found in the latter part of CPRA’s §6255(a), exempting material such “that on the facts of the particular case the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record.”

The privilege Rena Leddy asserted here is not actually found in the CPRA, and consists basically of the theory that it’s in the public interest to let government agencies talk candidly with each other and consultants about various options under consideration before decisions are made. It’s crucial here that the agencies actually be working on a decision, that the discussions to be exempted are taking place before that decision, and also that there’s no public interest in revealing the information that overrides the public interest in concealing it.7

So Rena Leddy seems to be claiming somehow that the fact that UPC is going to execute a task called “Budget refinement for management plan” is not a secret, but the number of hours it will take them to carry out the task is somehow predecisional and must be kept secret in order to preserve the ability of the BID to consult candidly with UPC. This makes no sense whatsoever, of course.

However, mostly what I needed for my ongoing project of getting BID consultants busted for not registering as lobbyists is everyone’s hourly rates.8 I am interested in how many hours each task takes, and it would certainly make the task of proving that UPC was violating the Municipal Lobbying Ordinance easier, but it’s better for everyone to compromise if possible. Thus I sent yet another email to Rena Leddy asking her to change her mind about the trade secrets claim and offering not to pursue the hours-per-task information if she’d release the hourly rates information. She responded the next day, refusing to reconsider:

I did think about it, however, Urban Place Consulting has confirmed that it considers its hourly rate for services as proprietary information and derives a financial benefit from that rate not being public. As I have indicated, the amount the BID pays to Urban Consulting has not and would not be withheld.

It was bad enough that she wouldn’t reconsider the whole trade secrets thing or even consider my highly reasonable offer of a compromise, but her assertion here that the information was a trade secret just because UPC said it was a trade secret creates a whole new problem. This kind of nonsense must have come up before, since the CPRA at §6253.3 states clearly that:

A state or local agency may not allow another party to control the disclosure of information that is otherwise subject to disclosure pursuant to this chapter.

So regardless of whether or not the information was in fact a trade secret according to the legal definition, the fact that UPC said it was so can’t actually be relevant. Off I sent another email:

Thanks for your response. UPC’s opinion is not controlling, nor even relevant, as far as I can see. CPRA at section 6253.3 says so explicitly. The BID is required to base its analysis on the public benefit to be gained by releasing the information. Can you at least tell me what public interest you suppose you’re protecting by not releasing their hourly rates?

Having received no answer by April 19, I emailed her to ask if she was going to respond. She told me on the 21st that she had responded, which I took to mean that she wasn’t going to.

Now, it is one of the major, major flaws with CPRA that if local agencies9 won’t comply, the only recourse is to file a writ petition10 in Superior Court asking a judge to force them. Before one does that, it’s good practice for one’s lawyer to write a demand letter giving them a chance to mend their mendacious ways.

So, blessed as I am with competent, enthusiastic, super-heroic, for-social-justice-fighting, legal representation, I asked the lawyer hey, will you do this thing? And the lawyer said, yeah sure friend! And he sent them this demand, of which the TL;DR is essentially hey guys, we call shenanigans, now hand over the goodies or walk the metaphorical plank! And a few days later, some lady from B&G wrote a response saying essentially that (a) you’re crazy, (b) you’re wrong, (c) we don’t have to disclose the records, and (d) here they are anyway cause we’re so nice.

And that is the three month saga of how, because they’re so nice,11 I have the unredacted contract to share with you. And there is a ton of useful information in that one little page, now revealed for all to read and ponder upon! And I will be getting back to you about the many and various uses to which it can be put.

P.s. In closing, though, let me just note that, apart from questions of unregistered lobbying and additional violations to be named later, it’s of independent interest that Steve Gibson makes $215 per hour. Larry Kosmont, to be sure, makes more than this at $295 per hour, but Ed Henning, BID consultant to the San Pedro BID, gets only $135.

Image of Rena Leddy started its life on her Twitter feed and ended up here, twisted beyond recognition for my own nefarious purposes. It is now, I have to say, ©2017 MichaelKohlhaas.Org.

  1. Actually one of them is, and that is Larry Kosmont.
  2. The Public Records Act is very explicit about the fact that to do so is required. At §6255(a) it states: “The agency shall justify withholding any record by demonstrating that the record in question is exempt under express provisions of this chapter or that on the facts of the particular case the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record.”
  3. I am going to try below to attempt to explain this much-abused notion. I am going to fail, though, because no one actually understands it and it’s probably not actually understandable.
  4. It’s tangential to this particular post, which is mostly about the CPRA process rather than the specific information I obtained here, but nevertheless this heavily redacted item still reveals a bunch of essential information. In particular, the itemized steps in the renewal process in the left-hand column are invaluable even without UPC’s estimates of how long they’ll take. You’ll hear much more about this in the near future, after I’ve gathered enough evidence to file a complaint with the Ethics Commission against UPC for unregistered lobbying. Or after they just freaking register, which I don’t know why they wouldn’t. It costs under a thousand bucks and seems as if it would save them a lot of tsuris. Maybe they’re worried that if they register now it’ll be like an admission that they should have registered before? That might be true, but they’re going to have to get right with the law at some point, and it seems as if the sooner they do it the less painful and costly it’s going to be. But they know their business, I suppose, just as I know mine.
  5. I have no idea what Rena Leddy’s claim of proprietary information refers to, if anything. I won’t mention it again in this post.
  6. I realize that this example is kind of tangential, but the article is fabulous and must be read by everyone who cares about the recent history of Downtown Los Angeles. The horrific-slash-miraculous-slash-ickety-poo transformation of Grand Central Market is a major part of Jose Huizar’s and Carol Schatz’s re-slash-de-vitalization of Broadway. Also, the Market is owned by Adele Yellin, who’s a major player in the freaking Historic Core BID, which, thanks to its batty little fusspot of an executive directrix is, never you fear, going to be featured on this very blog in one or more long-form posts like this one about how they had to be taught that it’s actually required to comply with the law.
  7. This so-called exemption is explained in great detail by the Reporters’ Committee for Freedom of the Press as part of their excellent and painstakingly detailed guide to CPRA:

    The deliberative process privilege is designed to protect essentially three policy objectives: “First, it protects creative debate and candid consideration of alternatives within an agency, and, thereby, improves the quality of agency policy decisions. Second, it protects the public from the confusion that would result from premature exposure to discussions occurring before the policies affecting it had actually been settled upon. And third, it protects the integrity of the decision-making process itself by confirming that ‘officials should be judged by what they decided, not for matters they considered before making up their minds.'”

    As are some of the criteria for applying it, as determined by various courts (all citations to cases are omitted, but can be found in the original source):

    The key question in every case is “whether the disclosure of materials would expose an agency’s decision making process in such a way as to discourage candid discussion within the agency and thereby undermine the agency’s ability to perform its functions.” To qualify for the privilege the document sought must be both predecisional and deliberative. “To establish that a document is predecisional, an agency must identify an agency decision of policy to which the document contributed [citations omitted], or at least must show ‘that the document is in fact part of some deliberative process’ [citations omitted].” To show that a document is deliberative, a document generally must consist of opinions or recommendations.
  8. Of course in conjunction with the total value of the contract. Every BID I’ve asked for this general figure has given it to me with the exception of South Park, which is being renewed under the tutelage of shadowy BID consultant Tara Devine, who is an exceedingly high-value target in the consultant/lobbyist wars due, not least, to her reprehensible work on the establishment of the Venice Beach BID. Of course, South Park CPRA policy is under the enthusiastic but far-less-than-competent control of their twisted little pipsqueak of an operations director, Katie Kiefer. They also use Bradley & Gmelich, who are the same lawyers that, as you’ll see below, advised the Fashion District on this matter. I predict that I’ll either be able to publish the relevant information from them by the middle of June or else a story about how sometimes more drastic measures are necessary. Which it is is, of course, up to the BID.
  9. A term of art for any entity that’s subject to the CPRA. BIDs are local agencies of the government of the State of California no matter how much they bitch and moan about it.
  10. This is the particular kind of lawsuit that one must file to get a judge to force them to comply.
  11. They caved in to the demand, so it’s not necessary to dance upon their graves. After all, they’re nice!

2 thoughts on “The Fascinating Story Of How It Took Three Months And A Demand Letter From An Attorney To Get Rena Leddy To Disclose That The Fashion District BID Is Paying Steve Gibson Of Urban Place Consulting $215 Per Hour For BID Renewal Consulting, Which Is Less Than Larry Kosmont Gets But More Than Ed Henning”

  1. Good work! The inner workings of government and lobbyists. I understand that the money collected from the assessments can be used to pay these lobbyists. Maybe that’s what is delaying the Venice BID with the same cast of characters.

    1. Thanks, John, and it’s nice to hear from you again! They absolutely do use assessment money to pay their renewal consultants. They also use assessment money to pay lawyers to tell them, usually unsuccessfully, how not to release public records.

      As far as the Venice Beach BID, I don’t know what the delay is. On May 2, Shannon Hoppes from the Clerk’s office told me that the contract had gone out to the POA at the end of April and that, at that time, she was not sure when it would be signed and returned. I try to check with her at least once a month.

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