Some Officials Want Secession Financial Backers Revealed

Despite state campaign disclosure laws, Los Angeles residents don’t know much about who is bankrolling the San Fernando Valley secession movement.

Unlike activists petitioning to place an initiative on the ballot or candidates running for office, the group pushing for a study and possible vote on secession is not required by California campaign laws to disclose how much money it collects or who contributes to its cause.

Only if the breakup is placed on the ballot by a government panel will secession boosters be bound to reveal their finances--and then, only for political activity occurring from that point onward. Thus, the public may never learn the names and possible motives of benefactors providing the big bucks that secessionists expect to spend over the next few years in pursuit of a citywide vote.

That concerns some city leaders and campaign finance watchdogs, who would like to see secession drives subjected to disclosure laws at the state or local level.

“This should be covered,” said City Councilman Mike Feuer, who last week asked the city’s Ethics Commission to review the issue. “Valley secession is obviously a political campaign. But this is anything but simple. We need to determine whether we have jurisdiction.”

Valley VOTE, the group advocating secession, has so far refused to identify all but a handful of its financial contributors. Its leaders say they are reluctant to do so, because many donors are active in Los Angeles civic life and fear political repercussions from secession opponents at City Hall.

“We really have nothing to hide,” said Valley businessman David Fleming, a city fire commissioner who has given money to Valley VOTE. “Me, I don’t care. But some [contributors] actually work for the city. Others sit on city commissions and are worried about a backlash.”

The near-total absence of campaign reporting requirements for secession drives typifies the uncharted territory occupied by municipal divorce--an arcane process overseen by a little-known panel that usually decides sewer district annexations and other small-time boundary shifts.

The campaign finance activists who helped write the state’s landmark disclosure law, the Political Reform Act, a quarter-century ago say they never foresaw a political movement like Valley secession. Such a split has not occurred in California since Montebello detached from Monterey Park in 1920 and has never taken place in American history on so large a scale.

Valley secession would reduce Los Angeles from second- to third-largest city in the nation and instantly transform the Valley, which is home to more than a third of Los Angeles’ population of 3.8 million, into the country’s sixth-largest city, ranked between Philadelphia and San Diego. Secession would require a majority vote of the Valley, as well as the city as a whole.

“Nobody thought about it, and so it was not addressed. But that doesn’t mean it shouldn’t be,” said Robert M. Stern, who helped write the the disclosure law and now serves as co-director of the Center for Governmental Studies in Los Angeles. “This sort of falls between the gaps.”

Not all the law’s authors are convinced that secession advocates should have to reveal their financial backing, however.

“Should this be subject to disclosure requirements? I don’t think there is an obvious answer because this is something of a hybrid,” said UCLA law professor Dan Lowenstein, former chairman of the state Fair Political Practices Commission. “On the one hand, this is a petition drive. On the other, it involves traditional lobbying.”

Indeed, according to the FPPC, which was created to enforce the law, secession drives are not required to report their contributions and war chests because they more closely resemble campaigns to create new cities from unincorporated county land than traditional initiative drives.

As in initiative drives, secessionists must start the process to place their issue on the ballot by collecting signatures from registered voters. But unlike those campaigns, secession or cityhood proposals do not proceed immediately to the ballot after backers collect enough signatures. Instead, they are subjected to analysis by the Local Agency Formation Commission, a panel created by the state to oversee municipal boundary changes and which ultimately decides whether to put the issue to a citywide vote.

“The way the Political Reform Act works is that there has to be an election, and you have to be trying to influence the outcome of that election,” said Carla Wardlow, chief of the FPPC division that provides advice to candidates and lobbyists. “It’s possible you won’t know anything about [contributions to Valley secession] until it is placed on the ballot.”

That possibility concerns the Ethics Commission’s executive director, Rebecca Avila. She plans to determine whether the city has the power to require campaign finance reporting for secession bids, and if not, wants to consider asking the state to do so.

“It’s a thorny issue, but the same principles that apply to all ballot campaigns should apply here,” Avila said. “In my view, it seems to be a quirk in the state law. It’s something we will be taking a look at.”

Valley VOTE is polling its financial backers and in coming weeks may release the names of those who do not mind having their contributions made public--but only those, said the group’s president, Jeff Brain.

“There are people who are fearful of retribution,” Brain said. “Right now, we only have three people who have asked to stay anonymous, and they all gave under $1,000.”

After prodding by The Times last August, Valley VOTE revealed that its biggest donor at that time was the Daily News of Los Angeles, which contributed $60,000 of the $200,000 the group said it had. The revelation raised eyebrows among some media critics, who questioned whether a newspaper could objectively report on a political campaign it was also funding.

Since then, Valley VOTE has announced that it spent roughly $290,000 on its successful signature drive to force a study on the economic consequences of secession and has spent roughly $500,000 overall. The group has yet to detail who paid for that initial phase of its campaign, which utilized hired signature-gatherers to canvass Valley malls and markets.

Now secessionists are dramatically escalating their fund-raising and expenditures as they intensify the drive for municipal divorce.

Under the seven-step process for studying secession outlined by LAFCO, secession advocates will play a central role in the process by suggesting a plan to divide Los Angeles’ gargantuan array of assets and liabilities, and submitting a detailed vision of how an independent Valley city should be structured.

To that end, they will need deep pockets to hire a team of government experts to help shape the secession study, which is required by state law and must arrive at certain findings before the breakup proposal can legally go before voters. They will also need significant amounts of cash to defend their interests in the many lawsuits that are widely expected to complicate the issue as it wends its way through LAFCO. They predict this second phase will cost them between $500,000 and $1 million, excluding possible legal fees.

The Civic Foundation, a sister committee of Valley VOTE being shepherded by Valley kingmakers Fleming and Bert Boeckmann, already has received $500,000 in pledges toward the effort, Fleming said.

But the foundation, which announced recently that it has added influential former ARCO Chairman Lodwrick Cook to its leadership, has no plans to disclose who contributes that money. For perspective, $500,000 is roughly the amount that City Council candidates Alex Padilla and Corinne Sanchez have cumulatively spent this year in their battle to represent the northeast San Fernando Valley.

“We’re just raising money to help government,” Fleming said. “If somebody doesn’t like that, that we’re raising money to help government pay for a state-mandated study, then I don’t know what to say.”

A letter recently circulated by Valley VOTE sheds light on the big-money contributions being solicited by the secession movement, which has enlisted a professional fund-raiser to help fill its campaign coffers.

It also shows that secessionists are seizing on the fact that donations can be made in secret to help open donors’ wallets.

In the letter, Boeckmann and Fleming--who signed simply as Bert and Dave--urge supporters to lend their names and money to the secessionist cause, from $250 for the title of secession “Patriot” to $25,000 to become a secession “Founder.”

“There are no contribution limits,” the letter states. “The names of contributors are not required to be reported and will be kept confidential upon request.”

Though Valley VOTE is not required under campaign laws to disclose how much it has raised, the group is applying to become a tax-exempt organization, and as such would have to submit annual tax reports to the Internal Revenue Service. The reports would detail how much Valley VOTE leaders were paid and the total amount the group collected, but would not have to include the names of contributors.

And although no state laws require disclosure of contributors in Local Agency Formation Commission proceedings, the state’s 57 commissions can individually adopt their own regulations.

Some do require commission members to disclose whether they have been influenced by lobbyists, for example. But most do not, simply because they rarely encounter issues that would merit such scrutiny, said Mike Gotch of Cal-LAFCO, the umbrella group representing all of the panels statewide.

The Valley secession campaign may force the Local Agency Formation Commissions to decide that tighter requirements are necessary, Gotch said.

“There is something here that has never come up before, that has never been considered, and probably should be,” Gotch said. “I have a feeling we’re going to see more of these secession drives in the future.”