In Defense Of A Change To A Compensation-Based Threshold For Lobbying Registration In Los Angeles

I wrote yesterday about a troubling meeting of the Ethics Commission concerning revisions to the Municipal Lobbying Ordinance. The proposals are still very much in flux, and timely public comments are not only essential for swaying the wavering commissioners in the right direction, but the commissioners, no matter their other flaws, do seem to read them, so they’re likely to be effective if submitted over the next couple of months.1

I had planned to write a letter to the Commission about all the issues together and publish it here as well, but the more I think about it the more I have to say. Thus I thought it would be much easier for everyone if I wrote about one issue at a time and then edited the posts down into a single letter to the Commission. Also, maybe you’ll find some of my ideas useful in framing your own letters, which should be sent to ethics.policy@lacity.org.

This post, then, is the first installment of that project, and the subject is the proposed change from a time-based registration requirement to a compensation-based requirement. If you have no idea what I’m talking about, you’re surely not alone. Turn the page for an introduction to the issue and arguments in favor of making the change.

At present, the Municipal Lobbying Ordinance, at LAMC §48.02, defines a lobbyist to be:

… any individual who is compensated to spend 30 or more hours in any consecutive three-month period engaged in lobbying activities which include at least one direct communication with a City official or employee, conducted either personally or through agents, for the purpose of attempting to influence municipal legislation on behalf of any person.

If someone meets this definition, they’re required by LAMC §48.07(A) to register with the Ethics Commission:

An 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.

Here’s how the Ethics Commission staff, led by director of policy Arman Tarzi, describe their proposed change:2

To enhance transparency and accountability, we recommend returning to a compensation-based definition of “lobbyist”. In August and October of 2016, we recommended that a lobbyist be defined as an individual who becomes entitled to receive $2,000 or more in a calendar year for lobbying on behalf of another person. The $2,000 threshold was recommended because it aligned with the campaign finance disclosure threshold, another law designed to inform the public about money spent to influence action.

Members of the Ethics Commission agreed on the concept of returning to a compensation-based definition; however, they asked staff to consider raising the threshold to $5,000 or more in a calendar year. Staff has revisited the definition and … concurs with a $5,000 threshold.

The staff report also notes that this City’s time-based requirement is an anomaly. Of the ten largest cities in the U.S., according to the report, Los Angeles is the only one with a time-based requirement.

Now, if you were at the meeting you heard a whole bunch of lobbyists pissing and moaning about how any of these changes would ruin their professional lives, force them to get real jobs, send them to prison, and so on. There wasn’t much discussion about this particular item, but towards the end, Commission President Jessica Levinson called on lobbyist James Sutton to speak from the floor and he seemed to indicate that he would oppose it. You can watch his weird little speech here if you want to, and here’s what was said:

Jessica Levinson: Mr. Sutton, are you comfortable?

James Sutton: Frankly, not at all. There’s so many issues here, and as you can hear, in two minutes, the lobbying community focused on the most glaring changes. But for instance, there’s one issue that … I mean, Arman’s done so much work, and the staff, but one issue I didn’t even know about, I think it sounds, about the five thousand dollar filers and ongoing reporting, I missed that because the red line version came out on Thursday…

Tangentially, James Sutton is either a liar or he’s incompetent, and I’m betting on the first choice. He was hired in October 2016 by the Los Angeles Lobbyist Association3 According to his 2016 registration form he started working on this project in October of that year. According to the staff report quoted above the Ethics Commission staff recommended this $5,000 threshold in August 2016 and it was also discussed at the October 2016 meeting of the Commission. So when James Sutton says he “didn’t even know about” it, what’s he saying? That he didn’t even read up on the very thing he’s being paid to lobby on?4

So that’s the issue, and now we can move on to arguments in favor of changing over to a compensation-based registration threshold.

■ Time-based qualification makes it hard for people to know if they’re required to register

If people are working as lobbyists but only part time it’s possible that they’ll have to keep track of their hours for two months or more before they qualify. What if it doesn’t occur to them to track their hours? Most of the Commissioners at Tuesday’s meeting and a number of the public commenters stressed the importance of getting currently unregistered lobbyists into compliance with the law. Everyone knows when they’ve earned $5,000 for the year. Many people don’t know when they’ve worked for 30 hours over three months. Even less do they know at the beginning of the three months that they will have worked 30 hours by the end, so that there’s no way for them to know that they should start tracking time.

■ Time-based registration thresholds are hard for investigators to prove.

Again, it’s quite reasonable for unregistered lobbyists not to keep timesheets of their work. If they’re accused of not registering they may not have proof of the time they worked. Conversely, if they don’t keep timesheets and they actually were required to register it’s hard for investigators to prove it. Just for instance see the work it took to make a case that Tara Devine spent 30 hours lobbying for the establishment of the Venice Beach BID.

On the other hand, everyone creates financial records even if they don’t retain them. If someone was required to register under the proposed $5,000 rule, there will be bank records that can be subpoenaed by Commission investigators if probable cause is established. For this5 reason I hope that at future meetings the Commission will invite the investigative staff to comment on this proposal.

■ Time-based thresholds can require complex mathematical reasoning to determine if registration is required

This came up in an actual case I’m working on right now. Take a look at this October 3, 2016 invoice from Devine Strategies to the South Park BID for BID consulting services.6 She billed for 80 hours between March 2016 and August 2016. This is six months. Now, it is not possible to work for 80 hours over six months without working for 30 hours in some three consecutive months, although I don’t think that’s at all obvious. To see this, note that if she worked 30 or more hours during the first three months then the proposition is true. If not, that is, if she worked 29 or fewer hours in the first three months then she must have worked 51=80-29 or more hours in the second three months.7

It seems that it should not require this kind of sophisticated analysis to determine whether or not someone has broken the law. Even worse, it’s not possible to say exactly when she broke the law by failing to register. Maybe it was between March and May, maybe between June and August, or maybe both. That is, we can say for sure that she did break the law but not when it happened. This is not a reasonable situation for a law to create.

Note that if compensation-based registration were in place it would be eminently clear that Tara Devine was required to register based on the invoice, as she was paid $12,500 for those six months. Also note that I’m glossing over one detail here regarding a contact with a City official. I discuss this in the next section.

■ A time-based threshold can create really anomalous and unexpected results

This example is based on the same invoice from Tara Devine to the South Park BID. Recall that the MLO requires not only 30 compensated hours over three consecutive months to trigger the registration requirement, but that those 30 hours include at least one contact with a City official as part of an attempt to influence. Without a contact it doesn’t matter how much time one spends.

So Tara Devine spent 80 hours lobbying from March 2016 through August 2016. Also, here is an email from her to former South Park executive director Jessica Lall which proves that Devine met with City Clerk employees on the matter in June 2016.

First imagine that she spent 51 hours on lobbying activities in March 2016 but did not contact any City officials. This doesn’t trigger the registration requirement because of the lack of a contact. If she spent the other 29 hours in June 2016 and did contact the City the requirement is still not triggered due to a failure to hit the 30 hour threshold.

On the other hand, if she spent 50 hours on lobbying activities in March 2016 without contacting a City official, spent one hour in April 2016, and then 29 hours in June 2016 with the already-noted contact then the 30 hours from April through June with the June contact do trigger the reporting requirement. To make it even more ludicrous imagine that the hour in April took place after midnight on the 1st. It makes no sense at all that she’s not required to register in the first instance but is required to register in the second.

The purpose of the law is to require disclosure from professional lobbyists. Disclosure is equally important in both instances, so the fact that the law creates this anomalous distinction based on moving one hour’s worth of work from one day to the next day shows that it is not functioning as it should to promote transparency.

■ Compensation-based registration will promote compliance with the law

A number of lobbyists who commented at Tuesday’s meeting said that they thought it was more important for the Commission to focus on getting currently unregistered lobbyists to register than to change any of the laws. A number of Commissioners8 took up this idea and made it their own. For instance, listen here as Commissioner Serena Obenstein rants semi-coherently on the topic:

And it gets to Commissioner Campos’s point that is if the intent is to figure out how we bring in unregistered lobbyists. That is if the point is to make sure that the public knows what’s going on we want people who are potentially out of compliance
[unintelligible] rather than figuring out how to regulate more.

The idea that there’s some kind of dichotomy between increased compliance and increased regulation is, of course, a bullshit red herring tossed in front of less-than-competent commissioners to throw them off a trail they probably aren’t capable of finding in the first place, but, for the sake of argument, let’s just pretend that Serena Obenstein’s theory actually makes some minuscule amount of sense. There are two parts to getting people to comply with a law. First, the law has to be clear enough for people to know whether or not they’re complying with it. Second, there has to be consistent and reliable enforcement. As we’ve seen above, the time-based registration threshold has neither of these qualities. The compensation-based has both.

And there are the reasons why I think the Ethics Commission ought to approve a switch here. Oh, one last thing. From Arman Tarzi and the rest of the Ethics Commission policy staff’s masterful set of recommendations I learned that the only reason that we have this ridiculous time-based threshold is because the City Council in 2007 wanted it that way. Of course, the charter forbids the City Council from modifying the MLO, but they put a proposition on the ballot without even asking the Ethics Commission for an opinion and for whatever reason the voters approved it:

For 40 years, from 1967 to 2007, City law defined a lobbyist as an individual who received or became entitled to receive compensation for lobbying activity. See former LAMC § 48.02(a), effective 1967; former LAMC § 48.02, effective 1994. However, with the adoption of Measure H, which was placed on the ballot without the Ethics Commission being able to weigh in, the definition was altered to focus on time rather than money.

There’s essentially no chance that any Los Angeles City Council would have good wholesome motives for changing the MLO. It’s why the law forbids them from messing around with it. So the fact that they pushed this change and the fact that they didn’t ask the professionals on the Ethics Commission for an opinion and the fact that the current definition is so freaking unworkable suggests strongly that they knew exactly what they were doing by changing it. That in itself is enough reason to change it back.9

Those are my arguments in favor of making the change from a time-based to a compensation-based registration requirement. If you’re so moved, please send your own opinions to the Ethics Commission at ethics.policy@lacity.org. They seem to take public comments seriously and I really think we have a chance to influence what gets sent from the Commission to the City Council.

On the other hand, too much optimism would probably be misplaced. After all, the last time this happened, between 2008 and 2010, Eric Garcetti let the proposal die in committee. There’s probably a good chance that will happen again no matter what gets sent up. But it’s essential not to let cynicism get in the way of activism. Please write!


Image of James Sutton which adorns the head of this post is ©2017 MichaelKohlhaas.Org. It’s a screenshot of a video to be found here, which is also ©2017 MichaelKohlhaas.Org.

  1. The next meeting is scheduled for October 17, 2017, although it’s possible that the Commission will hold one or more special meetings on this subject before then. In order to be sure you don’t miss something you can sign up for announcements via email.
  2. This quote and many others to follow come from the staff’s proposed recommendations. This is an essential document to read if you’re interested in this subject.
  3. This seems to be an essentially non-existent front organization used solely to hire James Sutton, who’s from San Francisco, to lobby against changes to the lobbying laws in Los Angeles. Their registered address is 2815 Townsgate Road, Suite 140. Westlake Village, CA 91361, which they share with lobbyists The Seymour Consulting Group.
  4. It’s interesting to note that LAMC §48.04(B) makes it illegal for registered lobbyists like James Sutton to:

    Fraudulently deceive or attempt to deceive any City official with regard to any material fact pertinent to any pending or proposed municipal legislation.

    And if it were true that he didn’t learn about this before last Thursday and that that was the fault of Ethics Commission staff, then it would be reasonable for the Commission to postpone consideration of the issue. That makes the fact he probably lied about material to the proposed legislation. His deception was fraudulent since he’s getting paid to get results. I’m not sure if it’s reasonable to submit a complaint against him to the Ethics Commission for this or not, but if I decide to do it I’ll certainly let you know.
  5. And plenty of others as well.
  6. BID consulting is lobbying. Here is the general argument for this position.
  7. If you’re interested in this kind of argument you might be interested to know that it’s a simple case of the famous pigeonhole principle.
  8. Kind of brainlessly in my humble opinion.
  9. If I ever have time to look into the history of how this happened I will let you know. I imagine it will be incredibly fascinating, but I’m so pressed for time! I am willing to bet good money that it was all Eric Garcetti’s idea, though, given how he singlehandedly sunk the last proposed revision of the MLO in 2008 through 2010.
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