L.A. could exempt many nonprofits from revealing lobbying

When Los Angeles lawmakers have weighed hotly contested issues such as whether to hike the minimum wage or how to regulate street vendors, nonprofits have frequently piped up in the debates ringing through City Hall.

Now L.A. could exempt many of those groups from revealing whom they lobby in local government and how much they spend to do so.

Nonprofits and lobbying groups are “not similarly situated organizations,” Serena Oberstein, vice president of the Los Angeles City Ethics Commission, said at a recent meeting. “Lobbyists are mostly, if not always, for-profit organizations acting in their own interest.”

But groups that advocate for open government caution that nonprofits can nonetheless be key players in politics.

“Any information about who has influence over political or legislative decisions is critical context for democracy,” said Stephen Larrick, director of the Open Cities team at the Sunlight Foundation. The goal of revealing who is trying to influence politicians “is not to make things difficult for lobbyists — it is to provide this context.”

Under its lobbying ordinance, Los Angeles requires people who are paid to try to influence city officials on municipal legislation to register and turn in regular reports on their spending.

That can include employees at nonprofits such as the Natural Resources Defense Council, Animal Defenders International and the Los Angeles Alliance for a New Economy, an influential group focused on labor and environmental issues that was fined $30,000 last year for failing to properly report its lobbying activities.

However, L.A. currently exempts some nonprofits from having to register and report their lobbying — those that were created chiefly to provide “direct services” to the poor, that do so for free and that get government funding to represent the interests of the indigent.

When the city started reviewing and updating its lobbying regulations, nonprofits pushed to expand that exemption.

The Alliance for Justice, a national association that helps nonprofits participate in the democratic process, argued that all 501(c)(3) organizations should be exempt, saying the complicated requirements could discourage nonprofits from speaking up.

Nona Randois, the association’s California director, said that some of those requirements could require groups to file frequent reports even if they never contact a city official and merely do research on a city issue. That could discourage a community group from producing a report on the need for more public toilets on skid row, the group argued.

Randois also stressed that 501(c)(3)s already face federal restrictions and reporting requirements on lobbying. “This would be an additional layer for them, making it harder for them to achieve their charitable missions,” she said.

“Groups that help unhoused people find housing, groups that work with low-income communities impacted by toxic land uses, organizations that serve our neediest residents ... they want to be able to continue to advocate for the communities they serve,” Randois added.

The Inner City Law Center argued that even being categorized as a “lobbyist” carried stigma that could cause nonprofits to lose donors. And Redeemer Community Partnership, a South L.A. nonprofit that has argued against oil drilling in urban neighborhoods, warned that moneyed opponents like the oil industry could “weaponize” the rules to attack small community groups.

Ethics Commission staffers resisted the idea of a blanket exemption for nonprofits, stressing that the rules are meant to ensure that the public knows who is trying to influence city decisions, no matter why they are doing so.

They also warned that totally exempting nonprofits could encourage other groups to start charities in order to dodge lobbying regulations.

And they stressed that many kinds of involvement in city issues — such as speaking at a public meeting — will not be counted as lobbying activities. Under the proposed rules, groups would have to devote at least $5,000 to trying to influence a city matter annually before they would have to register.

The Los Angeles Lobbyist Assn., a trade group, argued in a letter earlier this year that if a soup kitchen or a homeless shelter had employees trying to sway the City Council to adopt a “living wage” ordinance or shift more of the city budget to homeless services, the public has a right to know about their lobbying, just as it does about other groups advocating on the same issues.

After a string of hearings, the commission instead recommended that the city expand its current exemption, allowing any 501(c)(3) organization that gets less than $2 million in total income annually to avoid registering.

The commission also recommended exempting any 501(c)(3) nonprofits that were formed primarily to provide food, clothing, shelter, health care and other assistance to disadvantaged people at reduced rates, no matter how much money they took in.

Those recommendations were closely modeled off a proposal touted by several nonprofits at a recent Ethics Commisssion meeting. The organizations had offered up the idea as an alternative to exempting all charities. They argued that bigger organizations were more likely to have the resources to track and report their lobbying at the city level.

But the proposed exemption would also free bigger organizations that help the poor with food, clothing, legal assistance or other aid from having to report their lobbying. It is unclear exactly which organizations that might cover, but some nonprofits that assist the disadvantaged have been important and sometimes controversial players in local politics.

The AIDS Healthcare Foundation, a massive nonprofit headquartered in Hollywood, provides medical care for people with HIV and AIDS across the globe. Earlier this year, it devoted millions of dollars to an unsuccessful campaign for a ballot measure that would have imposed new restrictions on L.A. real estate development. After the election, it has continued to fund the Coalition to Preserve L.A., which has raised concerns about city planning issues.

Earle Vaughan, president-elect of the Apartment Assn. of Greater Los Angeles, said he understands the financial pressures facing small nonprofits, but large organizations such as AIDS Healthcare Foundation “can certainly afford to be transparent and follow the same rules that we all follow.”

His trade group, which represents apartment building owners, managers and developers, opposes efforts by AHF to roll back a state law that limits rent control. “If they’re going to exempt them, they should exempt us,” said Vaughan, whose group has registered and reported its lobbying to the city.

Under the proposed rules, nonprofits — even if they are exempt — still must report such spending if they are lobbying the city to get money, property or permits for themselves. The recommended changes, along with other proposed amendments to the lobbying regulations, now head to the Los Angeles City Council for its approval.

emily.alpert@latimes.com

Twitter: @AlpertReyes