Ethics Panel Endorses Public Funding of City Campaigns

As it imposed near-record fines in two cases of campaign finance violations, the Los Angeles Ethics Commission on Tuesday recommended strong medicine: that taxpayers pick up the tab for future bids for city office.

The panel levied a $147,000 fine against attorney Pierce O’Donnell, the second-highest ever by the commission against an individual, for hiding the true source of contributions to the 2001 mayoral campaign of James K. Hahn. O’Donnell admitted reimbursing employees and associates for $25,500 in contributions they had made.

The commission also imposed a $105,271 fine against former City Councilman Martin Ludlow for accepting nearly $30,000 from a union in violation of the city’s $500 limit on contributions from a single source.

Commission President Gil Garcetti said the two cases bolster the argument for full public financing of city campaigns.

“We wouldn’t be seeing these kinds of cases, would we?” Garcetti said. “It cleans up politics tremendously. It begins to restore public confidence in the democratic process.”

The commission’s 3-0 vote on the recommendation will be refined by the staff and forwarded, as early as June, to the City Council, which could decide whether to submit it to voters.

The commission endorsed the plan despite being warned it would require up to $9 million annually.

The proposal generally would allow candidates to receive full public financing if they first raise a threshold amount of money in small contributions from individuals in their districts within a specified period.

Currently, the city spends up to $2 million to partially match private contributions for candidates who accept spending limits.

Under the proposal, the limited funds or “seed money” raised by candidates from the public to qualify would be turned over to a public-financing trust fund for allocation to all qualifying candidates.

“Because the amount of the public financing candidates qualify to receive represents virtually their entire spending limit, candidates do not need to engage in fundraising or rely on private donors to fund their campaigns,” said a report submitted to the commission by Executive Director LeeAnn Pelham.

Pelham and her staff cited the city’s budget problems in recommending another alternative that would provide public financing of just half of the money for City Council candidates and none for citywide contests. Such a system would cost about $6 million.

However, Susan Lerner, executive director of the California Clean Money Campaign, said the panel should consider the policy goals before weighing the costs, and she backed full public financing, which she said would improve “the public’s faith in the election process.”

Bob Stern, president of the L.A.-based Center for Governmental Studies, also backed full public financing.

“If public financing is important to reduce the appearance of corruption you are not really reducing the appearance of corruption if candidates are able to fundraise for the general election,” Stern said.

Lerner and others told the panel the city could save millions of dollars by doing away with separate runoff elections and instead adopt an “instant-runoff” system.

Garcetti said he was moved by public testimony that full public financing would allow elected officials to spend less time fundraising and more on doing their jobs.

It is unclear whether the full-public-financing proposal could win approval from the council majority. Just last week, the council’s Rules and Elections Committee shelved a group of reforms proposed by Hahn when he was mayor that would have prohibited fundraising by city commissioners and prohibited campaign consultants from lobbying city officials.

The state Fair Political Practices Commission also agreed Tuesday to fine O’Donnell an additional $75,000 for the same laundered contributions to Hahn’s campaign.