A month after the Los Angeles City Council voted to allow Neighborhood Councils more input in shaping public policy, the city’s Ethics Commission has challenged the provision that would require the advisory councils to provide extensive financial disclosure.

The City Council voted unanimously in January to grant Neighborhood Councils the right to track development and planning projects as they reach various city departments by opening what is called a “council file,” which would give the neighborhood advisory councils more influence on local decisions that directly affect them.

However, members of these advisory Neighborhood Councils would be required to complete a financial disclosure document detailing their professional and personal financial information, real estate holdings and stock transactions, among other areas of financial interest.

Some members of the City Council have suggested that if Neighborhood Councils want to have an increased role in formulating public policy, they should be subjected to ethical and financial scrutiny similar to what policymakers face.

According to the Ethics Commission, Neighborhood Councils are exempt from filing a state-mandated conflict of interest form, known as Form 700.

“Neighborhood Councils have an advisory role, but they have no power to set or make policy,” stated Ethics Commission vice chairman Bill Boyarsky.

“My concern is that if we make the disclosure requirements too onerous, given the real absence of power these councils have, that it might well chill participation,” added commissioner Michael Camunez.

The commission, which is the city’s enforcement body regarding ethics, campaign finance and lobbying laws, sent a letter to the City Council February 19th suggesting the use of CEC Form 52, a city-generated disclosure form, instead of the state Form 700.

“The commission believes that an alternative form should be filed with the commission and should require Neighborhood Council members who introduce or second a council file to disclose employers, real estate interests and business interests for both themselves and their spouses or domestic partners,” the commissioners wrote.

That decision pleased Mark Redick, president of the Del Rey Neighborhood Council, who is one of the staunchest critics of the City Council’s current disclosure guidelines.

“It’s very obvious that the [City] Council did not completely vet this issue,” said Redick.

In a prior interview with The Argonaut after learning about the financial declaration component that the City Council had requested, Redick said that legislative body’s January 15th motion calling for the release of financial information could put his and other local Neighborhood Council members in jeopardy of having their identities stolen and could lead to possible financial ruin.

“At a time when identity theft is the fastest growing crime in the United States, why would our elected officials want to subject us to that?” he asked. “The actions of the City Council regarding this issue are both demagogic and hypocritical.”

In addition, the Ethics Commission stated in its letter that Neighborhood Council members should be required to certify that they have no financial interests that would be affected by the matter at issue in the council file, have not received a gift or other incentive to support the council file and that they are not aware of any other actual or apparent conflict of interest relating to the file.

“If a Neighborhood Council member cannot make the appropriate certification because of the existence of a financial interest, the receipt of a gift or incentive, he or she would be required to disclose the nature of that interest, gift or conflict,” the letter reads.

“Form 700 is fine for legislative bodies that have the power to make decisions,” said Boyarsky. “But there has to be a balance between the state conflict of interest form and another form of disclosure.”

Like Form 700, the proposed document would require a signature under penalty of perjury.

Los Angeles City Councilman Bill Rosendahl, who represents the 11th District, which includes Del Rey, maintains his earlier contention that having access to a council file requires heightened scrutiny of those who wish to have a stronger say in policy decisions.

“The bottom line is this: If you’re going to be involved in policy-making, there are certain ethical responsibilities that must be met,” Rosendahl said. “People need to know who you are.”

“People need to feel totallycomfortable that you’re doing it with openness, transparency and clarity for everybody, with no hidden agendas,” the Councilman continued. “That’s the whole point of ethics disclosure.”

About Redick’s concern regarding identity theft, Rosendahl feels that that is part of being involved in public policy matters.

“We’re all subject to identity theft,” Rosendahl said. “But if they’re going to open council files, which is part of the public policy program of the city, they need to realize that there’s a responsibility attached with that. [Neighborhood Councils] are advisory in decision making, but if they’re opening up council files on the level of policymaking, then they’re not advisory — that’s a political act.”

Redick, a Los Angeles hotel executive, feels that the financial requirement that the council has asked for could have a detrimental effect on grass-roots participation at the local level.

“This could force some of us to resign, which could result in a loss of a quorum,” he asserted, echoing commissioner Camunez’s concern.

Regarding the commission’s break with the City Council on the level of financial disclosure for Neighborhood Councils, Rosendahl said he is willing to consider its recommendations.

“If the commission feels that there is a better strategy than the Form 700 for these citizen politicians, I’m all ears to hear it,” he said. “I appreciate the fact the Ethics Commission is getting involved with this issue. That’s what they’re there for, to play the role of the watchdog. It would have been better if they had discussed that with us prior to moving us forward on [Form] 700, but if they have something that makes more sense, we’ll certainly review it.”

Other local Neighborhood Councils view the concept of financial disclosure somewhat differently.

“I think [financial disclosure is] a fantastic tool for Neighborhood Councils to be able to use,” said Mike Newhouse, president of the Venice Neighborhood Council.

Newhouse, who is an attorney, would prefer that the conflict of interest provision not be a part of the City Council’s recommendation to allow local councils more direct involvement in public policy, but he said that in the long run it wasn’t that significant.

“It would be better if it wasn’t there, but it’s not the end of the world,” Newhouse said.

Redick believes that there could be another motive for the City Council’s insistence on having Neighborhood Councils make their financial information a matter of public record.

“I believe that there are some councilmembers who look at the emerging Neighborhood Councils as potential political opponents at some point,” he said. “I believe that there is a great unease because they are grass-roots in nature, and that can be threatening to those in power.”

Some manner of financial transparency is necessary, says Rosendahl, due to the fact that there are members of Neighborhood Councils who may have conflicts on certain projects or developments.

“Some of these [Neighborhood Council] land use committees are developers or people who have relationships with developers,” he pointed out. “There’s nothing wrong with that, but you just need to have full disclosure.”

The commission will consider adopting its recommended model at its March 11th meeting.