LOCAL ELECTIONS : Use of Funds By Ex-Cityhood Group at Issue

During three years of promoting cityhood, the Malibu Committee for Incorporation never lacked for money.

With a broad base of support that included generous help from TV and movie stars, the group, commonly known as MCI, raised $270,000. Even after settling its debts once its original mission was accomplished, MCI ended up with more than $19,000 in the bank.

Now, a year after closing the books on the cityhood effort, the group’s financial assets have become an issue in the April election.

Supporters of council members Mike Caggiano and Missy Zeitsoff, who have been targeted by some critics for defeat, contend that MCI has improperly used funds left over from the cityhood fight to boost the campaigns of three candidates with close ties to the group.

“They raised that money under the guise of promoting cityhood, and now they’re using it to launch attacks against their political opponents in violation of the terms in which it was given,” said David Kagon, a lawyer who supports Caggiano.

Kagon and others are particularly upset by a monthly newsletter published by MCI, which is often critical of Caggiano and Zeitsoff but which MCI says is merely part of its new mission of keeping Malibu residents informed about local issues.

“We don’t endorse candidates or contribute to their campaigns,” says Bob Arey, MCI’s chairman. “We’re entitled to educate the public as to what MCI considers to be in the best interest of Malibu.”

However, in a community where personal rivalries among elected officials often overshadow political differences, even Arey concedes that he isn’t likely to win many converts among MCI’s detractors.

After helping Malibu achieve cityhood last March, MCI changed its name, its bylaws and its mission.

Retaining the familiar acronym, it became Malibu Citizens for Community Involvement, dedicated to preserving Malibu as a semirural enclave. To retain its tax-exempt status, it is obliged to steer clear of partisan politics, something its leaders insist it has done.

But critics contend that the organization has become a political action committee in disguise. And they accuse it of working hand in glove with another group, the Malibu Grassroots Movement, to promote Councilwoman Carolyn Van Horn and two other contenders, Joan House and Jeff Kramer, in the April 14 election.

With the help of contributions from a veritable Who’s Who of entertainment industry executives, the grass-roots movement, known as MGM, has raised more than $15,000. It openly endorses Van Horn, House and Kramer.

MCI, meanwhile, has the monthly newsletter mailed to 6,800 Malibu households, making it an instrument that most local politicians can only dream about.

The newsletter routinely extols the virtues of Van Horn and Councilman Walt Keller while relentlessly taking aim at Mayor Larry Wan and the other two members of the council majority: Caggiano and Zeitsoff.

“The community is dismayed by a council that does not have a majority interested in carrying out its wishes,” states the March issue, which, in a typical salvo, places the blame for Malibu’s divided politics on the council majority.

Another recent issue portrays the trio as wasteful big spenders who bear the blame for the city’s budget woes, concluding that “the council majority never even determined whether or not the city had money available to fund their spending decisions.”

Such attacks have long irritated Wan, Caggiano and Zeitsoff, but with the election drawing near, the sting has become especially painful.

And in recent days, even supporters of the two targeted incumbents concede that the combined forces of the two groups pack an organizational wallop that figures to benefit Van Horn, House and Kramer in a field of 20 candidates.

By comparison, Caggiano and Zeitsoff appear to have little in the way of an organizational counterpunch.

A group was hastily put together last week. Its spokeswoman, Joy Ellis, Wan’s former campaign consultant, says the group plans to function as a “truth squad” against MCI and MGM, but it has raised little money thus far.

MGM, which organized last September after the council majority voted to oust Keller as mayor and name Wan instead, is open about its aim to defeat Caggiano and Zeitsoff and promote a new council majority that will take a tougher stance against development.

Although all five members of the City Council are slow-growth advocates, Keller and Van Horn have portrayed the others as soft on development because they have been more receptive in allowing exemptions to Malibu’s year-old construction freeze.

Differences between the two factions are largely rooted in personal rivalries that predate cityhood, when Keller and Van Horn co-chaired MCI, and the others were closely identified with a rival group.

Besides Van Horn, the other two candidates endorsed by the grass-roots group--House and Kramer--also have longstanding ties to MCI.

Until recently, House’s husband, Ken, was co-chairman of MCI, and he remains on its nine-member steering committee. Kramer volunteered his services to MCI during the legal battle with Los Angeles County over cityhood and served on the steering committee until he resigned to run for City Council. LaVona Corzine, a former co-chair, is Kramer’s campaign manager. And Audrey Beatty, another former co-chair, is helping direct Van Horn’s campaign.

Arey, the group’s current chairman, is also a member of MGM, whose president is TV game-show announcer Gene Wood, himself a longtime MCI hand. Until recently, Wood’s wife, Carleen, served on the MCI steering committee.

“They say we’re biased, and you’re damn right we are,” Arey said. “MCI is biased in favor of protecting the rural character of Malibu.”

He vigorously disputes that there is anything improper about the group’s use of the funds left over from the cityhood fight, saying that MCI’s general membership voted overwhelmingly to use the money to promote its new goals once cityhood was attained.

“If someone thinks we’ve done something illegal, let them file a formal complaint,” he said. “We’ve got nothing to hide.”

Since it is not a political action committee, MCI is not required to file financial statements as part of the campaign.

Opponents have challenged the group to disclose its finances, but until now MCI has declined.

“We don’t mind saying how much money we’ve got, but we haven’t felt obligated to answer to anyone except our own members,” Arey said.

He said the group had between “$7,800 and $9,000” left in its coffers at the time Malibu became a city last March. It was awarded $20,500 in court costs stemming from its lawsuit against the county, and, after sharing about half that amount with its attorney, Graham Ritchie, was left with “a little more than $19,000,” he said.

MCI spent $5,000 to lobby for legislation, enacted last year, that enabled Malibu to receive its fair share of 1991 property tax revenue. The bulk of the rest has gone to produce the newsletter, leaving the group with “about $5,600” at its disposal, Arey said.

Arey, who also serves as the group’s treasurer, said that articles in the newsletter are collaborative efforts by members of the steering committee, which, with the recent resignation of Carleen Wood, now has eight members, including himself.

He identified the others as Bill Egar, Ken House, Joyce Wall, Alan Rosen Ducat, John Harlow, Dick Powell and Carolyn O’Meara.

“Just because we’re a nonprofit (organization) doesn’t mean we’re going to stand by and watch Malibu be plundered by developers,” he said. “We’ve consulted with various attorneys, and as long as we don’t endorse candidates or contribute to their campaigns we’ve got the right to espouse our views.”

However, opponents see it differently.

“They’re skating on thin ice,” Kagon said. “There are those of us who believe they’ve already crossed the bounds.”