Advertisement

City Disclosure System Blasted in Ethics Report

Share via
Times Staff Writer

In a report drafted for Mayor Tom Bradley’s Commission on Governmental Ethics, the city’s financial disclosure laws were criticized Monday as weak and their enforcement assailed as generally ineffective and sometimes non-existent.

The commission staff report said there are glaring deficiencies in the city’s existing ethics code and that record-keeping by the city clerk is considered atrocious.

Enforcement of disclosure laws, the report said, is “so lax that it is unclear whether anybody has ever been fined or prosecuted for failing to comply with the law.”

Advertisement

Incomplete, Erroneous

Based on a review of hundreds of documents, the study draft found that nearly half of the 1,500 reports filed in the last year by city employees were incomplete and nearly 30% of the reports contained significant errors. Reports by lobbyists were said to be in even worse shape, with 30% of all lobbyists failing to file expense reports.

“It’s been critically said that disclosure is like disinfectant sunlight,” Commission Chairman Geoffrey Cowan, a public interest lawyer, said in releasing the preliminary staff report. “But we’ve discovered that disclosure in Los Angeles consumes a great amount of energy but sheds only a small amount of light.”

Cowan and four commission staff members drafted the document, the first product of the commission’s novel effort to redefine proper conduct by city government officials to be made public.

Advertisement

The commission staff called financial disclosure “the linchpin of any government ethics law. . . . But in Los Angeles, disclosure has come to mean little more than a bureaucratic nuisance.”

Disclosure laws, most of which were drafted in the spirit of political reform inspired by the Watergate scandal, are intended to reveal possible conflicts of interest that public officials may face.

These laws typically require elected officials and city employees in high-ranking or sensitive positions to publicly reveal their investments, real estate holdings, sources of income, loans, outside business positions, honorariums and in some cases gifts received. Within those broad categories, city and state governments have widely divergent rules on just how much information is actually required.

Advertisement

In Los Angeles, for instance, investments need only be valued at more than $1,000, more than $10,000 or more than $100,000. Officials are also not currently required to disclose information on their primary residence or real estate investments outside city limits and they are not required to disclose gifts made by others to their children.

The commission staff is recommending that the city adopt tough new standards for disclosure and that voters approve a Charter amendment to establish a city agency to set guidelines, monitor the process, act as a repository for information and provide training and enforcement.

While the draft report clearly found fault with the existing system, it was less specific about what changes were necessary, and it could be November before a plan is forwarded to the mayor. Some of the changes advocated in the staff report would require revisions in the City Charter, a matter that must be put before voters.

The commission was appointed by Bradley on April 12 in the wake of disclosures about his own finances. Bradley is now under investigation by six local, state and federal agencies, including the city attorney, U.S. attorney and the federal Securities and Exchange Commission.

The commission consists of seven members, five of them lawyers and two religious leaders, and the report was prepared primarily by four hired staff members. At its first meeting, the commission sought to distance itself from the mayor by rejecting any funding from the city and declaring that its goal was not to judge Bradley, but to recommend a tough, workable and enforceable code of ethics for the city.

The preliminary report on disclosure that was released Monday is the first of six to eight preliminary reports that the staff will deliver to the commission board for consideration, Cowan said.

Advertisement

The next working paper, on income and investments, is expected in 10 days. Later reports from the commission will examine campaign contributions and expenditures, lobbying, “revolving door” career paths and campaign finance law.

In its report, the staff found fault with nearly every aspect of the current system--from the information required, to the way officials fill out the forms, to the way the city handles the material being reported.

“Current disclosure categories do not reflect today’s financial realities,” the report stated. For instance, it continued, “the city requires no information about an official’s largest investment--his primary residence--nor about financial holdings outside the city.”

Dates of transactions and specific amounts are not required and delays of as many as 15 months can occur before important transactions are reported, according to the report. Officials routinely fill out the disclosure forms improperly and forget to sign them, it added.

Once filed, the reports are kept in two offices at City Hall, separated by 23 floors. The commission staff said there is no master checklist to determine who has filed disclosure reports, and 75% of the reports filed were not dated when received--so it is unclear how many were actually submitted on time.

In all, the staff presented 19 issues, and it listed a spectrum of options for the commissioners to consider. The options ranged from leaving the current system intact to a total overhaul.

Advertisement

The staff members listed the options they prefer. Among those are suggestions that the commission adopt proposals to require officials to state exactly how much each of their investments are worth; that would require officials to report gifts to members of their immediate families; that would force officials to disclose their active involvement in nonprofit organizations, as well as their outside business affiliations; and that would compel officials to name their investment brokers and update their filings to include any financial transactions of more than $10,000.

In addition, the staff supported a proposal that appointed officials be required to disclose their economic interest before taking office.

The staff report also recommended that the current enforcement and filing system--split between the city clerk, city administrative officer, and city attorney--be scrapped in favor of a new, independent city agency that would have a staff qualified to review filings and enforce the law as well as train officials and render opinions on reporting.

Cowan cautioned that the report is not meant to be an indictment of the city clerk and city attorney, who are responsible for overseeing implementation of existing laws, but rather a condemnation of the system itself.

City Clerk Elias Martinez disputed the staff’s finding on record-keeping and added that his office does all that it is authorized to do under the law. “The law says we are a filing office,” Martinez said. “It does not say we are to conduct reviews . . . nothing says I have that authority.”

City Atty. James K. Hahn, whose office is currently writing a series of ethics ordinances for the City Council, said through an aide that he would not comment piecemeal on the commission’s work.

Advertisement

Bradley said through a spokesman that he is “pleased that the commission is taking its job seriously and discussing ethics in a detailed and thorough fashion.”

Ironically, if Los Angeles had financial disclosure requirements for city officials like those now being considered by the commission, many of the questions about Bradley’s financial ties would now be answered--and some of his apparent conflicts of interest may never have existed.

Specific information, such as dates, names of brokers and exact amounts of financial transactions that are being considered by the commission, are at the heart of most of the six investigations into Bradley’s finances for possible conflicts.

Advertisement