Judge suggests fines in billboard ad case

A judge has recommended $7,000 in fines against Regency Outdoor Advertising Inc. for violating disclosure rules involved when it provided 188 billboards in 2001 to support candidates including City Atty. Rocky Delgadillo and former Mayor James K. Hahn, according to documents released Wednesday.

The Los Angeles Ethics Commission is scheduled to take up the recommendation Tuesday and could adopt state Administrative Law Judge Daniel Juarez’s recommendation or impose the maximum fine of $970,000. The amount is based on $5,000 for each of 194 administrative violations originally alleged by the commission’s executive director.

It is highly unlikely the larger fine will be imposed, because the commission staff has acknowledged in legal papers that lower fines should be levied for inadvertent violations. Administrative law judges are used occasionally to help settle disputes over allegations between the commission and those it alleges broke the rules.

Juarez recommended the lower fines based on evidence that most of the violations of ethics rules were unintentional and that there were five actions by Regency to put up the 188 billboards, so there should be only five counts of disclosure violations. Still, Juarez said that the failure to include disclaimers on billboards indicating that they were not paid for by the candidate “was significant in that the public did not know who purchased the support....”

Regency officials agree with the judge’s recommendation that $7,000 in fines is appropriate, said Dominick Rubalcava, an attorney for the firm.

“We think the administrative law judge, after hearing all the evidence, made a good decision,” Rubalcava said. He called the failure to disclose the source of the billboards “an oversight.”

Regency spent $125,000 on billboards promoting Delgadillo over then-City Councilman Mike Feuer, who had been pushing for strict billboard regulations.

The judge’s recommendations were released just a week after the City Council approved a Delgadillo-recommended settlement with Regency in a separate lawsuit over enforcing a billboard permit program.

Some critics maintain the Nov. 28 deal gave the billboard firm too many concessions -- allowing it to get permits for up to 37 new, modernized or existing illegal signs.

“I have spent the last five years fighting billboard companies in the courts and working to maintain a billboard ban in the face of one legal challenge after another -- settling cases only when directed to do so by my client, the council. The billboard companies know they do not have a friend in me,” Delgadillo said.

City ethics laws limit contributions to citywide candidates to $1,000 per source, but companies are allowed to spend an unlimited amount independently supporting candidates, as long as there is no coordination with the candidate.

One such “independent expenditure” campaign was launched by Regency in the 2001 election in which it put up hundreds of billboards promoting Hahn, Delgadillo and council candidates Tony Cardenas and Jan Perry.

The judge found that Regency and its president, Brian Kennedy, violated ethics laws requiring that billboards purchased independently to support a candidate include a statement disclosing that they were not paid for or controlled by the candidate. The city alleged 188 counts, but the judge called that excessive. He limited that part of the case to five counts, with total fines of $4,500.

The judge also found that the billboard firm violated ethics rules requiring the city to be notified within 24 hours of an independent expenditure campaign of more than $1,000. The judge found only three of six alleged violations and levied $2,500 in fines for them.

patrick.mcgreevy@latimes.com