L.A.’s Inner Circle Is Mostly Rich, Enormously Powerful

When Los Angeles’ planned Disney Concert Hall seemed doomed, Eli Broad rounded up his friends, extracted millions of their dollars, and put the fund-raising and construction program back on track.

When City Hall craved a national affirmation of Los Angeles’ recovery, Broad, grocery magnate Ronald Burkle, Hollywood financier David Geffen and lawyer Bill Wardlaw got it the Democratic National Convention.

When the Catholic Church wanted a signature home downtown and the city hungered for landmarks to symbolize the remake of the civic core, Cardinal Roger M. Mahony called in his political chips and got the project approved.

And when any Los Angeles cause is in search of credibility, whether it is police reform, charter reform or school reform, lawyer Warren Christopher is the ultimate endorsement, the one leader whose blessing clears away most serious opponents.

Those men and several others--billionaire Spanish-language television magnate Jerrold Perenchio; former Hollywood mogul Lew Wasserman; and Phillip Anschutz and Rupert Murdoch, a couple of out-of-towners with an increasingly large stake in the fate of Los Angeles--form a sort of shadow city government. Their actions profoundly shape Los Angeles’ future even though they operate off the formal stage. Unlike the civic leaders of former eras, most are classic entrepreneurs of the “new economy”--men who derive their considerable fortunes not from traditional sources like land, natural resources, agriculture or development, but from financial services and communications technologies.

Los Angeles’ shadow leaders are unelected and unaccountable, motivated in some cases by the prospect of personal gain and in others by old-fashioned civic commitment. Many are prodigious campaign donors at the local, state and federal levels. Most are Democrats. All are white. All are men.

They work and socialize in overlapping circles. In the summer, some vacation together in Europe, where they ride bikes; in the winter, a few of them jet to Sun Valley, Idaho, to ski. They negotiate shifting alliances as projects bring them together and pull them apart, as marriages form new couples and divorces ripple through their insular community.

Their actions are complicated and controversial, clearing the way for progress and fueling working-class suspicions of their motives.

“That group continues to be very powerful at moving big civic projects,” said Raphael Sonenshein, a Los Angeles historian at work on a book about the city’s recently completed charter reform effort. “But politics in Los Angeles is getting very complicated.”

One of the leaders himself acknowledges that some people are bound not to like the idea of a small society of influential men, their hands firmly on the levers of power.

“I think you can make an argument that you ought to be wary of this,” he said. “I would not want to be on the other side of an issue [against] the mayor and these civic leaders. . . .”

The civic leadership does not always pull together. Burkle and Broad ended up on opposite sides in the recent effort to secure a professional football team, and the mayor either couldn’t or wouldn’t intervene. The team went to Houston.

In planning the events around the Democratic Convention, Broad insulted Wasserman by insisting on hosting a party at his own house rather than Wasserman’s. That ended up alienating Wasserman and his friends, including Burkle. Even now, months later, it’s a struggle to get the co-hosts of the convention together. While Broad and Burkle bicker, Geffen is all but invisible, delegating a top aide to handle his role in the planning.

But when the civic elite pulls together, it is demonstrating significant power over the life of America’s second-largest city. Its reach extends to the cultural life of the city, the education of its children and the selection of the men and women who run its government.

The presence of powerful, behind-the-scenes leaders is not new to Los Angeles. In the early 1900s, a tightly knit group of businessmen played a dominant role in building the city. Under their leadership, Los Angeles was transformed from a medium-sized Western town into a fertile city, largely as a result of controversial moves to bring water from the state’s eastern reaches.

Another generation of civic leaders was similarly influential in Los Angeles in the 1950s and 1960s, when business executives and a few others banded together on cultural projects and public policy issues. At its peak, that group was able to advance its own candidate for mayor and then send signals to its handpicked leader.

At its center was Asa Call, legendary leader of Pacific Mutual Life Insurance Co. and, more important, the man who made the relationships that defined that period of Los Angeles history.

How central was Call? It was he who introduced Gov. Earl Warren, later to become chief justice of the United States, to a young lawyer named Warren Christopher, who later led one of America’s great law firms, set the pattern for reform of American policing and served as secretary of state.

Over time, the power of those earlier civic leaders ebbed. Call died, and the social and political landscape of Los Angeles shifted.

The city’s expanding geography contributed to the demise of tightly knit civic leadership, physically dispersing the rich and powerful to communities far and wide. So did the changing nature of corporate life, with its increasing international demands on chief executives.

“These days, try to get together a group of leaders a week from Thursday,” Christopher said in an interview. “Half will be out of town, and more will be busy with something.”

It’s a Different Era, a Different City

Even more important than those factors, Christopher added, are two less tangible influences. Los Angeles today is fragmented not just by geography, but also by fierce and competing interest groups. That, combined with a media culture aggressively committed to exposing conflicts of interest, makes it hard to coax some potential civic leaders into the fray, Christopher said.

“There is a severe penalty for making a mistake,” he said.

In the place of traditional leadership comes a new generation with shallower Los Angeles roots but deep Los Angeles interests--most of whom have a stake in downtown and, interestingly, almost none of whom make their living in the city’s entertainment industry. Geffen and Wasserman are the conspicuous exceptions, and even they are seen more as philanthropists than as activists.

The entertainment industry’s lack of substantial local influence has been a constant over the years--first the result of anti-Semitism, more recently a byproduct of its leaders’ disdain for local politics in favor of a national stage where they believe they have greater interests at stake.

At the same time, there have been important changes in the people and institutions at Los Angeles’ power table.

The Los Angeles Times, once a family business whose scion was among the city’s most powerful insiders, has seen its inner-circle influence ebb as it has become a more traditionally run corporation. Arco, once the city’s leading employer and most powerful corporation, is being bought by British Petroleum, whose owners are far away and relatively unconcerned with Los Angeles’ affairs. The city’s banks, most notably Security Pacific, have relocated or been absorbed, taking with them the traditional influence of their CEOs.

And yet, a new group of leaders is nonetheless emerging. It is less coherent than in past generations, but it is accumulating power and learning how to use it.

At its center is Broad, the famously determined and forceful businessman who built the nation’s largest home construction company and then followed that with an enormously successful financial services firm. Tightly wound and impatient, he suffers no fools and tends to interrupt when he feels the conversation wanders. He relishes attention and sports a four-page resume that he happily hands out along with copies of old speeches and videotaped tributes.

“I love Los Angeles,” he said in a recent interview. “It’s a true meritocracy. You can come here without family background, of any religion, and if you have the right ideas, you can succeed.”

Broad, whose net worth is estimated to be more than $4 billion, has become the region’s most effective civic activist. He led the fund-raising for Disney Hall, was the founding chairman of the Museum of Contemporary Art, was the main money behind the recent effort to secure a football team for Los Angeles and was a driving force in winning the 2000 Democratic National Convention. He vacations with Mayor Richard Riordan, chats now and then with the president.

“I’ve always been a workaholic,” he said. “I’ve just become more eclectic. And I have an ego. I want to be respected for what I do.”

Bill Wardlaw is a different kind of insider, one who operates more quietly and in more traditionally political ways. His adversaries fear him, his friends are deeply loyal. More than any single person other than Riordan himself--cynics would say even more than Riordan--Wardlaw is responsible for the mayor’s political success.

Wardlaw is connected to Washington as well as Los Angeles, and his wife, a respected federal jurist, has rocketed through the judicial ranks, serving now as one of the most powerful judges in America. Her position prevents her from active political involvement, but no one doubts her contacts; after all, Kim Wardlaw administered the oath of office to Riordan for his second term and presided over his marriage to Nancy Daly.

If one thing distinguishes Bill Wardlaw’s use of power, it is this: He does not ask for himself. He asks, sometimes demands, on behalf of Riordan or other friends and allies. But his aversion to the limelight, his team of loyalists and his reluctance to call in chips for himself have made him the city’s most important unelected political figure.

Though Wardlaw operates in the wings, he is positively extroverted compared to Perenchio.

A Spanish-language television magnate who does not speak Spanish, Perenchio is said to be ebullient on occasion, given to bursts of song. But the former agent lives by the maxim that the stars, not the businesspeople, get the limelight.

Sometimes, however, his money makes him the story. Like Broad, Perenchio is a billionaire who donates to political causes. He tends to hedge his bets, giving to candidates of both parties, but his huge last-minute contributions to the campaign to defeat Proposition 227, the anti-bilingual education initiative, made him the object of derision.

Critics pointed out that, as the head of Univision, the largest Spanish-language network in the nation, Perenchio had a vested interest in keeping his viewers from learning English. Typically, Perenchio did not rise to the bait, guarding his silence despite the criticism.

Perenchio’s contributions to that campaign enraged some supporters of the initiative, but at least one was sanguine about it. Riordan--who not only supported Proposition 227, but also went so far as to enlist his daughter to tape a Spanish-language advertisement delivering his endorsements--was and remains Perenchio’s close friend.

“He’s a guy who can live in a castle and be comfortable or live in a one-room apartment and be just as comfortable,” Riordan said. “He tries to be anonymous, but it’s hard to be anonymous when you’re as powerful as he is.”

As for Proposition 227, Riordan dismisses those who criticize his friend’s motives, and says there were no hard feelings, just an honest disagreement. “I respected his right to be wrong on that issue,” the mayor said.

With the right golf club--and presumably Perenchio owns one, since his Malibu property includes its own private course--the TV magnate could hit a ball from his office and land it on the deck outside Ron Burkle’s.

It’s safe to say Burkle would not be amused. Tough, unyielding and habitually direct, Burkle, 46, is the youngest member of Los Angeles’ civic elite. His friends appreciate his candor; his detractors call him petulant.

Burkle is the closest thing to a Los Angeles Horatio Alger. He started as a supermarket box boy and ended up as America’s leading supermarket boss, a rise fueled by junk bonds and daring. A millionaire by age 20 and a billionaire today, Burkle shies away from press, but speaks plainly in private, say friends and associates.

So far, most of Burkle’s influence has been directed at Sacramento. Burkle supplied big money to Gray Davis’ gubernatorial campaign and employed Davis’ wife for a time. Burkle refers to the governor as “Gray,” and no one doubts that Davis takes his calls, as in the debate over bringing a football team to Los Angeles, when Burkle’s money gave Hollywood agent Mike Ovitz’s longshot bid its greatest credibility.

Burkle also is plugged in locally. He and Riordan are social friends and political allies. Though by no means in lock-step with Riordan, Burkle nevertheless has delivered for several of the mayor’s big causes. So firm is Burkle’s place in the city’s civic life that he’s a co-host of the Democratic Convention--and he’s a Republican.

Broad, Burkle and Perenchio are billionaires whose influence derives in large part from their wealth. In the case of two of the city’s leading movers, however, money is incidental to their power.

One, Cardinal Mahony, has many of the attributes of traditional political influence. He has a large and growing constituency and a network of well-heeled supporters. He operates within the constraints and customs of his vocation, but he uses power when he needs to--to get his cathedral, to fight Proposition 187, to urge support for construction of Staples Center.

What’s more, he polls extremely well. In fact, only two public officials in the region rival the cardinal’s popularity numbers. One is Los Angeles Police Chief Bernard C. Parks; the other is Riordan.

Mahony is friendly with Riordan, a Roman Catholic, and generally supportive. As a lawyer and successful venture capitalist, Riordan helped straighten out the finances of the archdiocese, and Mahony has been an enthusiastic supporter of Riordan’s efforts to revitalize downtown. The cardinal, however, has his own agenda and will. He disagreed with the mayor’s opposition to the city’s enactment of a “living wage” law that boosted pay for workers in companies that do business with the city, and he pointedly withheld the church’s blessing for Riordan’s marriage to Nancy Daly. (It was Riordan’s third marriage.) The two also differ on the death penalty and abortion, both of which Mahony strongly opposes; Riordan is pro-choice and supports capital punishment.

Mahony’s flock is large and diffuse, full of political potential. By contrast, the man who arguably commands more political influence than any other Angeleno has no broad base of constituents and spends much of his time outside the city.

Respected by All Sides

That man, Warren Christopher, is no longer as integral to Los Angeles politics as he once was. But Christopher remains a supremely respected voice.

Meticulous and modest, given to painstakingly careful remarks, Christopher carefully rations his public comments. He refuses most requests for interviews, and often demurs when asked to weigh in on city issues. During the heated debates over the power of the Police Commission’s inspector general, for instance, Christopher let associates and former associates do most of the talking, even though it was his commission that paved the way for that post to be created.

When the chips are down, though, it is Christopher who remains the rare, almost unique, Los Angeles leader who can command the regard of all parts of a fractured city. Respected by liberals for championing police reform, by conservatives for his aversion to hyperbole and support of Riordan, and by the city’s business and legal establishment for his management of the powerful law firm O’Melveny and Myers, Christopher boasts a status in Los Angeles politics approaching that of an oracle--the wise counsel whose recommendations are rarely dispensed and even more rarely contested.

“His prestige is not issue-based or based on his position,” Sonenshein said. “His prestige is general and profound.”

Christopher, who commented freely for this article on the civic influence of others who came before him, declined to assess his own place in the city’s life.

As Riordan’s term in office begins its inexorable winding down, the civic leaders who have come together in part around him are showing no signs of abating their activities.

Broad has lent early help and support to Assembly Speaker Antonio Villaraigosa, who also hopes to corral Burkle’s backing. Wardlaw is urging county Supervisor Zev Yaroslavsky to announce his candidacy, and a number of candidates hope to win endorsements and help from the other insiders.

In fact, Riordan’s hold over the city’s civic leadership is conspicuously tentative, as evidenced by the fact that not one of Los Angeles’ most powerful insiders has agreed to support the mayor’s handpicked successor, commercial real estate broker Steve Soboroff.

As a result, the jockeying for position among the various contenders is intense. And it’s not just figurative. Sometimes it’s as subtle as a shove.

Take, for example, a small but telling incident last month. On Oct. 16, a group of Democratic Party bigwigs was in town for the opening of Staples Center, where the convention will take place. That afternoon, they were invited to a party at Burkle’s home, known as Greenacres. As the guests were sitting down in the garden to begin their lunch, one table attracted a number of top draws.

Broad was there, as was Jan Burkle, Ron Burkle’s wife (Burkle himself was in Europe with “Gray,” the governor). Roy Romer, who heads the Democratic National Committee, was in one seat, and Ron Rogers and Lisa Specht--themselves a leading Los Angeles power couple, he in public relations, she as a lawyer and lobbyist--also were at the table. That left just two open seats.

State Controller Kathleen Connell, who is considering a run for mayor, was looking for a place to land, and one person at the table beckoned Connell and her companion to fill the seats. Broad wanted none of that. He tried to lure Villaraigosa and his wife instead.

After a brief, awkward standoff, Connell stampeded to the seat, leaving Villaraigosa to roll his eyes and find a less prestigious place to eat.

“She was not going to be denied,” one person who witnessed the event recalled. “No one who wants to get places in this city wants to miss chance to have lunch with Eli [Broad] and Jan Burkle.”

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Los Angeles’ Power Players

Richard Riordan

Mayor, lawyer, investor. Founder of Riordan, McKinzie law firm. Elected mayor in 1993 in first try at public office. Republican. Lives in Los Angeles and owns home in Sun Valley, Idaho.

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Warren Christopher

Lawyer. Served as Clinton’s secretary of state. Chaired so-called Christopher Commission, which dissected LAPD after the Rodney G. King beating. Not a friend of Riordan, but supportive on key issues such as charter reform. Served in Cabinet with Cisneros. Democrat. Homes in Los Angeles, Carpinteria.

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Jerrold Perenchio

Billionaire, chairman of Univision. Close friend of Riordan. Major contributor to charter reform, anti-Prop. 227 campaign. Cisneros’ boss. Republican. Homes in Beverly Hills, Malibu.

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Bill Wardlaw

Lawyer and investment banker. Riordan’s closest friend, most important advisor. Close to Clinton, Sen. Dianne Feinstein. Democrat. Lives in San Marino.

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Eli Broad

Billionaire, founder of Kaufman & Broad and Sun-America. Close friend of Riordan. A host-committee leader of 2000 Democratic National Convention with Burkle, Wardlaw, David Geffen. Spearheaded Disney Hall fund-raising at Riordan’s request. Socializes with Burkle but competed against him for a football team. Democrat. Lives in Los Angeles.

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Ronald Burkle

Billionaire, supermarket magnate, investor. Friend of Riordan. Major contributor to Gov. Gray Davis. Convention host-committee leader, would-be football team co-owner. Republican. Lives in Beverly Hills.

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Gary Winnick

Investor, founder and chairman of Global Crossing Ltd. Said to be Los Angeles’ richest person. Not particularly active in political circles. Worked for Michael Milken at Drexel Burnham Lambert. Investor in Playa Vista. No party affiliation. Lives in Los Angeles.

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Henry Cisneros

President of Univision. Works for Perenchio. Former San Antonio mayor and member of Clinton Cabinet with Christopher. No longer seeking elected office, still influential behind the scenes. Democrat. Lives in Los Angeles.

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Michael Milken

Investor, philanthropist. Considered a financial genius, pleaded guilty to securities fraud. Friend of Riordan, mentor to Winnick. Helped finance Burkle’s supermarket acquisitions. Lives in Encino.

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Cardinal Roger M. Mahony

Religious leader. Worked with Wardlaw and Riordan on church finances. Supporter of Riordan projects for downtown. Lives in Los Angeles.

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Out-of-towners

Rupert Murdoch

Head of an international media empire. Fox, one of his properties, is based in Los Angeles. Part owner of Staples Center. Friend of Riordan. Homes around the world, but New York-based.

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Phil Anschutz

Heads Union Pacific railroad, owns sports team. Part-owner of Staples Center. Reviled by liberals, mostly for his support of an anti-gay initiative in Colorado. Professionally friendly with Riordan, though the two tangled last year over a railroad snafu that tied up traffic at Los Angeles port. Lives in Colorado.

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Tim Leiweke

Staples Center president. Works for Murdoch and Anschutz. Respected by Riordan, other City Hall officials. Working closely with Democratic Convention host-committee leaders.