Legislature Votes to Close Loophole

Prodded by state and local ethics panels, state lawmakers have approved a measure that will give local agencies the power to force disclosure of contributors and political expenditures by groups lobbying for secession.

The provision was a reaction to Valley VOTE, the group pushing secession of the San Fernando Valley, which has acknowledged spending more than $500,000 but has refused to release all but a few names of those bankrolling its effort.

A loophole in state financial disclosure law was responsible, and both the City Ethics Commission and the California Fair Political Practices Commission had urged the Legislature to act.

The bill was pushed by Assembly Speaker Bob Hertzberg (D-Sherman Oaks), whose district would be in the center of the nation’s sixth-largest city if Los Angeles and the Valley divorce.

The measure now goes to Gov. Gray Davis. It is part of a sweeping overhaul of state law governing local agency formation commissions, giving them additional powers as they make land use decisions statewide.

The measure was approved by a 70-5 final vote in the Assembly late Thursday. It clarifies the role of LAFCOs as the agencies responsible for setting boundaries and controlling urban sprawl.

Secession movements are underway in the Valley, Hollywood and the Harbor area.

The bill allows Local Agency Formation Commissions to require disclosure of contributions, expenditures, lobbying costs and other expenses, said Paul Hefner, spokesman for Hertzberg.

The bill also requires LAFCO to hold a hearing next year to consider adopting disclosure rules.

“Secession was the impetus for Bob to examine the [LAFCO state] code and find it deficient and not clear,” Hefner said, referring to Hertzberg.

Carol Scott, a state Fair Political Practices commissioner and Sherman Oaks attorney who has supported disclosure, said the bill was a crucial step toward fully informing the public.

” I thought LAFCO should require disclosure. This is an important statewide issue, enough economic issues are involved that there should be disclosure,” she said. “Whether it came about from LAFCO or [the FPPC], I just want meaningful disclosure with meaningful information.”

In April, the five-member FPPC declared that secession groups that promote or oppose secession should reveal their funding sources, but the commission could not settle on how that should be done. The matter was basically left to Hertzberg’s bill.

Valley VOTE officials declined again to disclose their finances, but said they would if others were required to do so.

“Currently there are no requirements for private organizations to disclose, so we felt that to single us out was not right,” said Jeff Brain, president of the Valley group. “If they adopt rules to require everyone to do so, we would comply.”

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Richard Close, chairman of Valley VOTE, added: “We’ve always said whatever the rules are we will comply with them. The problem has been the city of L.A. in the past has tried to change the rules retroactively.”

Close said the bill will “allow LAFCO to set up clear rules.”

Unlike drives to place measures on the ballot or elect candidates to office, campaigns to break up cities are not subject to any financial disclosure requirements until the issue qualifies for the ballot.

That could take years, because before being put to a vote, secession bids have to be scrutinized by the local LAFCO.

The Los Angeles Ethics Commission, among other agencies, argued that the loophole should be closed because secession campaigns are clearly raising and spending large sums to influence voters and achieve a political outcome.