Local council leaders divided on need for more financial disclosure
By Gary Walker
A recently proposed statewide ordinance that seeks to shine a brighter light on financial disclosure of election campaign donors has resurrected the topic of whether members of Los Angeles neighborhood councils should be required to provide the same level of financial information as other city officials.
On Dec. 3, state Sen. Ted Lieu (D-Marina del Rey) proposed legislation to increase penalties for failing to properly disclose campaign contributions and require greater disclosure of funding sources on mass mailings and media advertisements. Senate Bills 2 and 3 would also close a loophole in state law that permits some nonprofit organizations to finance campaigns without disclosure of their donors.
“Transparency and disclosure are critical to a healthy democracy,” Lieu told The Argonaut.
Neighborhood council members are volunteers who often put in lengthy hours serving on committees, advocating before City Hall on a variety of civic matters and assisting their City Council representatives in staying on top of important matters in their respective communities.
The advisory councils have also grown in stature and influence over the last several years. Many have engaged in lobbying to protect their city budget allotments and have been influential in planning decisions citywide, as well as within the boundaries of their communities.
Councilman Bill Rosendahl is in favor of his friend Lieu’s proposed legislation and thinks financial transparency should extend to neighborhood councils as well.
“If you’re going to have the public trust then you should have to disclose publicly if there could be any conflict on the decisions that you might be making,” Rosendahl argued. “I’ve been very clear on that in the past.
“I love my neighborhood councils and I do everything that I can to empower them,” the councilman added. “But they are very influential, and in some cases some candidates have even engaged in fundraising.”
Leaders of neighborhood councils are split on whether there should be more financial scrutiny of local councils on the Westside, which has some of the most active boards in the city.
Neighborhood Council of Westchester-Playa Vice President Mark Redick is adamantly opposed to any additional financial disclosure requirement for members of neighborhood councils.
“You will not be able to recruit people of caliber to serve on neighborhood councils if they have to open their life story (to the public),” Redick predicted. “They’re running for neighborhood councils, not city councils.”
Del Rey Neighborhood Council President Eric DeSobe said that before any decision is made regarding financial reporting, there should be a discussion among all neighborhood boards.
“I do think neighborhood councils should have lots of time to review any past or future proposals on this matter,” DeSobe said. “Neighborhood councils are still growing and onerous rules on campaigning could scare off volunteer leaders our community needs.”
While larger city councils have far more financial resources and assets that they must manage and members routinely raise money for their campaigns, neighborhood councils have not been without their scandals. In 2009, the Los Angeles Police Department investigated half a dozen cases where neighborhood council members had allegedly misappropriated approximately $250,000 in taxpayer funds.
Venice Neighborhood Council President Linda Lucks thinks that the LAPD investigation struck a cord with members of the public and hopefully with neighborhood councils as well.
“This is absolutely a case in point why we need to have more oversight and some form of financial disclosure,” she said. “The more that ethics training is mandated, the less we will see this kind of conduct on neighborhood councils.”
Ethics training is required by law for neighborhood councils, although many have been less than diligent in complying with this requirement. In 2009 – the same year as the LAPD embezzlement probe – The Argonaut reported that citywide, less than 30 percent of all local boards were in compliance.
And in the Oct. 28 neighborhood council election, Westchester-Playa, Mar Vista, Del Rey and Venice board members whose ethics training certificates had expired sought reelection.
Members of local councils are required to take a two-hour online conflict of interest training test upon their election, which must be renewed every two years.
“We believe in a strong, robust neighborhood council system and we engage those that we have in our district regularly,” said Yusef Robb, a spokesman for Councilman Eric Garcetti, who is running for mayor. “But we think it’s up to neighborhood councils to decide what official action they should take on this matter.”
Redick, one of the few Westchester-Playa members who completed ethics training among those who ran in the Oct 28. election, said financial disclosure similar to a member of the City Council would be “an unnecessary intrusion into the lives of citizen volunteers who are trying to improve the community.”
Elected city, county and state officials are required to complete what is known as a Form 700, a statement of economic interests. The 21-page form details an official’s income, investments, business positions, real property holdings and gifts, but is much more in depth than the neighborhood council financial disclosure.
Nearly four years ago, the City Council established guidelines for neighborhood council members to declare their financial assets when they request information on what are known as council files. Those seeking to access these files must complete a Form 54, a four-page financial document that covers interests in real property loans, investments and assets and gifts, travel payments and reimbursements that may be accumulated throughout their tenure on a local board.
Council files are municipal government documents that pertain to planning and land use matters, and many local advisory councils have become more active in seeking to protect their neighborhoods from projects that they feel might not benefit them. By accessing a council file, a neighborhood council is able to track its progress throughout the city’s planning and land use channels.
These planning votes, which neighborhood councils as well as their planning and land use committees consider and vote on, are one of the main reasons that Rosendahl is in favor of greater financial disclosure.
“Developers come before neighborhood councils all the time now with big projects,” the councilman noted. “In my district, they know they have to go before my neighborhood councils first before they come to me so that (the local councils) are involved in the process from the beginning.
“I just don’t consider it acceptable to sit on these neighborhood boards and be able to vote on financial and planning issues without proper disclosure.”
DeSobe thinks raising funds in neighborhood council races could be a suitable proposition in the future, with some exceptions.
“I would support fundraising guidelines for future neighborhood council elections, but only after (they) received ample opportunity to weigh in on what would be involved with that,” he said.
Redick, a former president of the Del Rey Neighborhood Council, does support credit checks and surety bonds for treasurers of local boards. “Oversight should be a part of neighborhood councils,” he said.
But any attempt to enact financial disclosure similar to the Form 700 might cause him to rethink serving on a neighborhood council.
“If (Form 700) becomes a requirement, I would not seek reelection and I would strongly consider resigning,” Redick asserted.
Mayoral candidates Councilwoman Jan Perry and City Controller Wendy Greuel did not return calls for comment. §