Ethics Panel Probes Fund Drive Led by 7 on Council

The Los Angeles City Ethics Commission has launched an investigation into a fund-raising event hosted by seven City Council members to bankroll a charter reform campaign, according to sources.

The Feb. 13 breakfast organized by political consultant Harvey Englander has been criticized by government watchdog groups, who charge that it violated the campaign contribution limits imposed by Proposition 208, a landmark campaign reform measure approved by voters in November.

The event attracted about 130 influential leaders, including union organizers, lobbyists and business executives, who were asked to contribute to a charter reform measure that includes a slate of council-backed candidates.

The guests were asked to pledge between $1,000 and $25,000 with a goal of raising $750,000, according to those in attendance. Authors of Proposition 208 say the law limits such contributions to $250 each.

Sources say the Ethics Commission has begun a probe into the charges and will start questioning event organizers and participants today.

“We are delighted that the Ethics Commission is looking into it,” said Ruth Holton, executive director of Common Cause, the nonprofit watchdog group that sponsored Proposition 208. “We need to stop potential loopholes before others try to take advantage of them.”

Englander said he was not concerned about the investigation, insisting that the event did not violate Proposition 208 limits.

“We are very clearly following the letter and the spirit of the law,” he said.

The campaign focuses on an April 8 ballot measure that asks voters to create a reform panel to overhaul the 72-year-old charter that acts as the city’s constitution. A second measure on the same ballot will ask voters to choose 15 candidates for that panel.

Englander said the money raised at the breakfast will pay for campaign literature promoting the measure to create the panel. Proposition 208 allows unlimited spending for ballot measures but imposes limits on contributions that benefit candidates.

The controversy involves Englander’s plan to choose a slate of candidates for the panel--which he will select in consultation with council members and others--and place it on the same mailer paid for by the contributors.

Holton and the authors of Proposition 208 say such a tactic unlawfully circumvents the rules by pooling contributions to benefit the candidates who will appear in the campaign literature.

They charge that Englander has created a so-called “independent expenditure committee.” Such committees are limited under Proposition 208 to contributions of no more than $250.

But Englander and his attorney, Cary Davidson, said the money will be used to support the ballot measure--not the candidates--and therefore is not subject to the Proposition 208 limits.

Several council members who spoke at the breakfast said Englander assured them that event would not violate Proposition 208.

Councilwoman Laura Chick, who attended the fund-raising event, said she was told that Englander was setting up an independent expenditure committee. She said she believed the law imposes no contribution limits to such a committee.

If the fund-raiser is found to have violated the law, Chick said, “I will pull my support and we will put a stop to it.”

Violations of Proposition 208 are punishable by a fine of up to three times the amount that a person has failed to report properly or unlawfully received.

Rebecca Avila, director of the city’s Ethics Commission, said her policy is to decline comment on such matters to keep any potential investigation from becoming an issue in a political campaign.

The charter reform movement was launched in response to threats of a San Fernando Valley secession last summer but has since sparked a power struggle between Mayor Richard Riordan and members of the council who accuse Riordan of trying to use charter reform to increase the mayor’s authority.

Riordan headed the petition drive to put the charter reform measure on the ballot and has helped raise $556,500 to support his own slate of candidates for the panel. His contributions were raised before Proposition 208 took effect on Jan. 1.

Councilman Mark Ridley-Thomas, who also attended the breakfast fund-raiser, said he is concerned that Proposition 208 will put the council at a disadvantage to Riordan.

“The goal of the event was to make sure there was a significant debate around the question of charter reform and not a slam dunk on the side that the mayor supports,” he said.