Members of Los Angeles Neighborhood Councils who wish to have a greater role in shaping public policy will now be required to provide financial disclosure when they seek to access city government files that pertain to development or city property in their neighborhoods.

The Los Angeles City Council voted on January 13th to establish guidelines for Neighborhood Council members to declare financial assets when they request information on what are known as council files. The new policy is a provision of a two-year pilot program that will allow local Neighborhood Councils to submit three files per calendar year. A submission requires the support of a second Neighborhood Council.

Members involved in a council filing who do not wish to comply with the new guidelines will be recused from participating in any action associated with the filing.

The financial disclosure document, called Form 54, mandates that any member of a Neighborhood Council who opens a council file divulge any information that relates to the action that they are seeking to access. This would include income, investments in real property, and loans and assets of businesses and trusts of the member, among other things, along with the member’s spouse or domestic partner.

Neighborhood Councils, viewed by many as ground zero in representative local government, now have the ability to shape public policy regarding land use matters for their communities by accessing documents submitted to city agencies. Along with this new ability comes added need for financial disclosure, some members of the Los Angeles City Council feel, as there have been reports of various conflicts of interest on certain boards that are rarely, if ever, addressed.

Form 54 is not as far-reaching an asset disclosure document as Form 700, which full-time elected officials and commissioners in California must sign. Form 700 is a statement of economic interests that requires detailed descriptions of an officeholder’s assets prior to assuming office as part of an effort to prevent ethical and financial conflicts of interest.

After an earlier proposal this year by the City Council to require local advisory boards to submit to financial disclosure statement similar to that required of full-time elected officials and commissioners when they seek to open council files, the Board of Neighborhood Commissioners recommended a milder form of asset disclosure.

Linda Lucks, vice president of the Venice Neighborhood Council and president of the Board of Neighborhood Commissioners, thinks that it was a good compromise to settle on Form 54.

“I think that the perception of the council was that if Neighborhood Councils want to play in a big arena, then this is what we have to do,” Lucks told The Argonaut. “Some might feel that they’re protecting their own turf, but that’s understandable.”

LeeAnn Pelham, executive director of the Los Angeles Ethics Commission, does not believe that Neighborhood Councils should have the same level of financial disclosure as decision-making bodies, but she feels that some form of financial transparency is warranted.

“[Extensive financial disclosure] makes sense for full-time elected officials,” Pelham said in an interview last month. “But we think that a narrow disclosure is appropriate.”

Not everyone is satisfied with the new requirement that Neighborhood Councils must abide by when seeking to access council files. Mark Redick, president of the Del Rey Neighborhood Council who has long opposed financial disclosure for local advisory boards, believes that this new condition could discourage potential community members from serving at the grassroots level.

“This could very well lead to board resignations and deter citizens who may be considering serving on a neighborhood board,” he said.

Redick also has doubts about the reasons the new policy was adopted.

“I question the motives of the City Council on Form 54,” he asserted. “I don’t think that it was about transparency; I think that it was done to discourage challenges from local advisory council members in future City Council races.”

City Councilman Bill Rosendahl voted in favor of the new rules and, like Lucks, views them as a part of the changing landscape on local neighborhood boards in which the members, although volunteers, have begun taking a more active role in how their communities are affected in everything from planned development to securing more recreational facilities.

“Opening a council file begins the political process,” Rosendahl explained. “I consider land use committees on Neighborhood Councils the first line of democracy.

“But when you are going to be making policy decisions and if you are going to be benefiting from them, then the public has the right to know that.”

One area of agreement is the mandatory ethics training component of the new law governing local advisory councils. Like their counterparts at the state, county and municipal level as well as those who serve as commissioners, members of Neighborhood Councils will be required to take ethics training courses annually. Members of the Ethics Commission hope that this will curtail any potential conflicts of interest that have been reported by some local councils.

“I’ve always advocated mandatory ethics training,” said Redick. “I’m glad that our city government decided to pursue this.”

“Now, there’s no excuse,” Lucks added, referring to future conflicts of interest occurring unknowingly. “It comes with the territory.

“If you want to be a neighborhood leader, this is the price that you pay.”

Rosendahl and Pelham also agree that ethics training should be enforced.

“It definitely should be mandatory,” said the councilman. “Everyone should understand the rules so that they can proceed in an open and transparent manner.”

It makes sense to balance ethics with transparency, Pelham said.

“Conflicts of interest are very important issues,” the ethics commission executive director pointed out. “Exposure to ethics laws that apply to members of all boards can only be beneficial.”

Redick feels that there should be mandatory expulsion for anyone who violates the conflict of interest laws.

The council will consider sanctions for any ethical breaches at a later date.

Harry “Craig” Wilson, a Westchester resident who is opposing Rosendahl for the 11th Council District seat, says ethics training would be in everyone’s best interest.

“I believe in ethics,” he said. “I don’t believe that there should be any secrets. Everything should be known to the public.”

Redick remains concerned about the long-range consequences of the new conditions.

“[Requiring Form 54] could ultimately lead to substantial harm to grassroots democracy at the Neighborhood Council level,” he predicted. “We will now be sitting on our boards with the sword of Damocles over our heads.”