Proposed Ordinance Would Toughen L.A. Ethics Laws : Government: City would be barred from doing business with companies or people violating the rules.

Hoping to add teeth to the penalties for violating the city’s ethics laws, two Los Angeles City Council members proposed an ordinance Wednesday that would prohibit the city from doing business with firms or individuals that break those laws.

Councilmen Mike Feuer and Joel Wachs jointly introduced the motion that bans those who are penalized for willfully violating ethics law from doing business with the city or lobbying city officials for four years.

For Feuer, a freshman lawmaker who took office in June, the motion makes good on a campaign promise he made when he blasted the council for doing business with the firm that organizes the Los Angeles Marathon after ethics officials fined it for money laundering.

“We want this . . . to give people notice that you have to abide by the ethics rules or you will face a stiff penalty,” Feuer said.

What further incensed Feuer, Wachs and others is that the City Council voted in January to waive nearly $200,000 in city fees for Los Angeles Marathon Inc., less than a year after the city’s Ethics Commission fined the firm $200,000 for laundering campaign funds.

“This city should not reward people who flout its laws but that is exactly what it’s been doing,” said Wachs, one of five council members who voted against the fee waiver.

Ethics watchdogs hailed the proposal as a step in the right direction.

“What this does is put teeth in the enforcement laws,” said Bob Stern, a consultant for the city’s Ethics Commission and former counsel for the Fair Political Practices Commission, the state’s ethics watchdog panel.

For those who are banned from lobbying city officials for four years, the proposed law is “a death penalty,” he said.

Ben Bycel, executive director of the city’s Ethics Commission, said he backs tougher penalties for ethics law violators because some firms that do business with the city often see the commission’s fines as simply “the cost of doing business.”

Under the motion, the prohibition would target any individual or firm that is fined $5,000 or more by the Ethics Commission and is found guilty by the panel of willfully violating ethics, campaign financing and lobbying laws.

The council’s Rules and Elections Committee, which is headed by Feuer, will consider the motion on Sept. 13. The full council is scheduled to consider the proposal in the following two weeks.

Although many city officials voiced support for increasing penalties for violating ethics laws, in private some City Hall insiders said the proposed law may prove too inflexible and may raise problems.

For example, when the Ethics Commission fines a firm or individual for violating ethics rules, it does not determine if the violation is willful or not. The panel would have to draft language to make such a finding.

In some cases, the willful intention is easy to determine, such as when a firm instructs employees to contribute to a campaign and reimburses them in order to exceed campaign contribution limits. But some officials asked whether, in that case, the city would impose the four-year ban on the firm, the firm’s lobbyist or the individuals who may have been unknowingly used to launder the contributions.

One City Hall source said the proposed law is too inflexible because it would take away the council’s discretion to consider, on a case-by-case basis, whether to do business with any violator.

“It’s just lawyerism,” said one longtime aide.

Under the proposed penalty, Stern said, many firms accused of violating ethics laws will also be more likely to appeal the findings of the Ethics Commission staff to an administrative law judge and, ultimately the commission. Most major fines issued in recent years have been paid by firms that agreed to settle the case without an administrative law hearing, ethics officials said.

The four-year period for the ban was chosen because that is the standard penalty for criminal violations of the ethics laws, Feuer said. The ban would take effect on the day the Ethics Commission imposes a fine.