Small Business Wields Growing Clout in L.A. Politics

Some of Los Angeles’ newest political power brokers do not work in downtown high-rise corporate suites, but behind the counters in mom-and-pop businesses across the city.

As the major corporations known for their political largess and clout merge, downsize or move out of town, small and mid-size enterprises are moving to fill the power vacuum created by the departure of such corporate givers as Security Pacific Bank and Union Oil.

To be sure, the majority of those on local campaign contribution lists continue to be developers, attorneys and lobbyists, all of them traditional donors whose names are well known in City Hall.

But small businesses, many of them minority-owned, are expected to play an influential new role in local politics this year as they increase their ability to offer the money and votes that big business has delivered, local politicians and campaign consultants say.

Although it may not be easy to go after this diverse group’s support, political candidates, particularly in the City Council’s small business-dominated Mid-City 10th District, are doing just that. When they drive through Koreatown, down Western Avenue or out Pico Boulevard, candidates not only see streets dotted with small shops, sports facilities and light industry, but also an emerging source of donations and a center of influence.

The new importance of small and mid-size businesses in local politics can already be seen: In 1997, nearly 20% of the donations for the citywide elections came from the 10th District--and that district did not have an election that year. In other words, 10th District business owners and others contributed nearly as much as the more traditionally donor-rich Westside districts, according to a recent city Ethics Commission report.

In addition to supporting candidates in the district, the Mid-City business owners and others were sending their cash across the city, from the downtown mayor’s office to the San Fernando Valley.

Local politics, then, is finally catching up with the city’s changing economics and demographics, analysts say. Just as organized labor, whose rising civic profile reflects the growth and progress of the area’s Latino population, is expected to make its political power felt in key City Council races, particularly on the Eastside, small business is also experiencing its own coming of age.

“I definitely see a trend with small business emerging as a major voice,” said Linda Griego, the former deputy mayor to Tom Bradley and former head of RLA, an organization involved in rebuilding Los Angeles after the 1992 riots. “I sense much more involvement from the small-business sector. There is much more of a willingness among owners of small companies to get more involved in government decisions or even learn how to make their voices heard. In the past, they were always reacting to things. Now they’re learning that complaining doesn’t get them anywhere.”

Take the Han Kook supermarket on Western, a bustling grocery store with Korean and American foods, a bakery, video store and pharmacy. Its owners donated $250 to West Valley Councilwoman Laura Chick’s last reelection campaign. Why?

“My understanding is that the City Council has a great deal of impact on how land-use decisions are made,” said Dale Kim, general counsel for the supermarket, sitting in his office above the busy market. “We feel it’s a prudent thing. . . . I think a lot of local businesspeople are becoming more sophisticated about it.”

Political analysts and others say small business’ emergence--like many of the firms--is very much a work in progress, spurred largely by the trends in big business. As oil companies and banks, for example, have cut back, merged or moved headquarters, contribution-hungry politicians and others have been looking toward small and medium-size businesses to become more politically active.

Gail Madyun, the owner of the Kennard Design Group, a small architecture and planning business on Wilshire Boulevard, says that she is now solicited regularly by campaign consultants and candidates. She selects carefully, choosing, for example, to give Chick $100 for her reelection after attending a reception for the councilwoman. Madyun appreciates the limits on campaign contributions because, she says, it opens the field to small business.

“It lets small business come to the table,” she said. “We’re not [individually] big political donors . . . but this gives us a chance.”

Carol Schatz, president of the Central Cities Assn., a powerful downtown business group, says she still receives political action money from such large companies as Arco, but she also is seeing a change.

“Medium-size and small firms are giving chunks of money because they recognize the importance of getting involved,” she said. “What’s happening to downtown here is not unexpected; it happened to every major downtown in the country. . . . Things are different. . . . We do still have sizable contributions, but we’re also seeing a lot of $50, $75, $100, $250 contributions from others.”

Community activists are eager for small business to become more involved in local politics and to take more assertive stands for the neighborhoods where their shops and warehouses are located.

“Small business is considered a significant force, and it’s growing,” said Anthony Thigpenn, chairman of AGENDA, a nonprofit community empowerment organization. “It’s a funding base for candidates and, in many cases, you’ll find a significant number of business owners who actually live there, as well, so they are an important voter base.”

Small business also represents the city’s increasing ethnic diversity, with more than one-third of all small enterprises now minority-owned, according to the U.S. Census Bureau. And a survey of Dun & Bradstreet data found that 10% of the nation’s 100 fastest-growing small businesses were in the Los Angeles metropolitan area.

Thinking Small

Candidates have already recognized the implications of that fact. For example, Scott Suh, who is running against 10th District Councilman Nate Holden, is making a solemn promise to small business.

“I pledge to you, the small-business owners, I will work hard for you and bring good jobs to the 10th District,” Suh says in a cable television advertisement now airing.

His campaign manager, Richard Elkins, goes further in an interview: “It’s all about business and all about jobs.”

Holden knows this well. He has pushed for about half a dozen business improvement districts, in which merchants or property owners agree to pay more for public services, like security and cleaning crews. Holden says he has been working aggressively to both maintain and attract new business to the district.

“Koreatown was like one country block when I came into office. . . . Now we have shopping centers, hotels,” Holden said. “Economic development and business is not just important, it’s essential.”

Marsha Brown, another Holden challenger, is a small-business owner, operating an investigations firm with her husband. She says City Hall has been slow to recognize the growth and influence of small business in Los Angeles.

“What people are only now starting to see is that small business is what is turning this county around,” Brown said. “As more people are transitioned from welfare to work . . . and big business is leaving . . . small business is growing and needs to be given a chance to compete.”

This increasing political activity is similar to the resurgence of organized labor as a Los Angeles political force.

Labor power is most evident in the council’s 14th District, where Richard Alatorre has decided not to seek reelection. Labor has so many friends in this Eastside district that the county labor federation has yet to settle on a candidate to back.

In the 10th District, small business could become as important a force as labor has become on the Eastside.

“We’re trying to build a coalition that reflects the new demographics of the 10th District,” said Gary Phillips, manager for one of the candidates, Madison T. Shockley II. “Part of our platform, of course, will be economic development.”

Holden, Shockley and Suh already have notified the city’s Ethics Commission that they have raised at least $50,000, indicating they will probably qualify for public matching funds.

Although Holden’s donations will probably come from lobbyists and special interests that work with the city, his challengers hope to tap deeply into the district’s small-business sector.

The Korean business community is expected to be politically active this year, but owners might well be split on the candidates, according to some political analysts.

“I don’t think the Korean American business owners will turn their backs on Nate,” said Charles J. Kim, executive director of the Korean American Coalition. “Maybe in their heart, they would like Scott Suh to win, but they are making business decisions. They don’t want to be the enemy of current incumbent council members.”

Still, Kim and others said the Korean-owned businesses, in particular, could play a large role this year as their owners and employees grow in voting numbers. Suh, in particular, wants to focus on this, planning voter registration drives in Korean and Latino areas.

By most accounts, however, Korean Americans are still a tiny fraction of the voters in the Mid-City district. African Americans account for the bulk of the electorate, with Latinos second and Asians last.

But with African American and Korean American relations better this year than before, some campaign analysts say they wouldn’t be surprised if more Korean-owned businesses contributed not only to Suh but also to black candidates.

Some small-business owners in the district say that they are ready for a change in local leadership and that they want to back a candidate more eager to support them in return.

“Nate Holden is a very experienced person,” said Majid Siddiquee, who owns a convenience store on Pico and who is supporting Suh. “He’s an old and wise politician . . . but we need someone who will try to understand our pain . . . the difficulties of running small businesses here.”

Pragmatic Concerns

Holden said he has worked hard for business. Yet others, including his supporters, say he is better known as a “pothole” politician than a business advocate.

“Maybe he’s not this visionary leader,” said Kerman Maddox, a political analyst who knows the area well. “But the neighbors don’t talk about the councilman’s vision. . . . They want to know when he will get the trees trimmed on their street, why they didn’t pick up the trash. That is critically important.”

Small-business owners share those concerns as well, particularly if they live in the district. And some say that will help spur them to local political action.

“Small-business owners really want to see results that impact them,” said Griego, the former deputy mayor. “They’re not so globally oriented. . . . It’s much more what happens on this block. It’s a very, very local interpretation of things that affect them.”

Further, she said that as small businesses begin to form coalitions and work together, they will become an even greater political force.

“The more their voices come together, the better they are,” she said. “I think there’s much, much more of that today than there was five years ago.”