LAFCO Official Earns Substantial Fees Advising Clients on City Hall Business

The government official in charge of drafting plans to break apart Los Angeles has collected tens of thousands of dollars in outside income from lobbyists and developers with business before the city, records show.

The official, Larry J. Calemine, is paid $100,000 a year as executive officer of the Local Agency Formation Commission, or LAFCO, the autonomous agency weighing cityhood proposals for the San Fernando Valley, Hollywood and the harbor area. His job makes him the most powerful official in shaping how Los Angeles would be sliced apart if city voters approve a municipal breakup.

But on the side, records show, Calemine has accepted “consulting fees,” “finder’s fees,” “salary” and “commissions”--much of it from builders buying his advice on how to win City Hall approval for Valley real estate projects.

In one commercial real estate deal, Calemine’s private and public roles converged. He performed at least $10,000 worth of consulting work for an attorney who was arguing a Valley secession group’s case before him and the LAFCO commissioners.

Calemine said the outside income--at least $117,000, all told, from 1996 to 1999--poses no conflict with his job of running the agency that redraws local government boundaries in Los Angeles County.

But Bob Stern, a California ethics law expert, called Calemine’s business deals a “very troubling” illustration of the problems that arise when public officials accept outside income.

“That’s just amazing that he’d be collecting all of this money as a government employee,” said Stern, president of the nonprofit Center for Governmental Studies, a Los Angeles research organization. “The people who are paying him obviously have a big interest in what LAFCO is doing.”

California law and LAFCO’s conflict of interest code bar officials from making any governmental decision in which they have a financial interest.

Stern said it appeared that Calemine had not broken any laws or rules, and no one has accused Calemine of accepting money intended to influence his official duties. But Stern questioned whether the public’s interest in the secession proceedings might collide with the interests of developers and lobbyists who have paid Calemine.

His public and private jobs overlapped at a vacant lot in Northridge.

The lot was slated for development first as a health club, and now as senior citizens housing. Calemine’s consulting work on the parcel has earned him at least $41,000 since 1996, records show.

From 1996 to 1998, the lot’s owner, Krausz Cos. of South San Francisco, paid Calemine at least $21,000 for advice on developing the site on the southeast corner of Corbin Avenue and Prairie Street, records show. By late 1998, the plan was to rent part of the land to an upscale gym, the Spectrum Club Fitness Center. But a City Hall zoning variance would be needed to build a parking lot big enough to accommodate club members.

So the health club’s lawyer, Rob Glushon, hired Calemine.

The parking lot was to be in Hal Bernson’s Los Angeles City Council district, so his support was crucial, even though no council vote was required.

“The last thing in the world you want is a City Council member going to a hearing and arguing against what you’re asking for,” Glushon said.

“Me and Larry and Bernson met a few times,” he recalled.

But Bernson is one of the nine LAFCO commissioners who oversee Calemine’s work at the agency. Was Calemine lobbying one of his bosses?

“You use the term lobbying--I would say that’s accurate,” Glushon said.

Bernson did not return several telephone calls seeking comment.

The councilman eventually supported the project after persuading the sports club to add more parking spaces. On Nov. 9, 1998, the Department of City Planning granted the variance. In 1999, Calemine received his fee: at least $10,000 from Glushon’s Century City law firm--Richman, Luna, Kichaven & Glushon--records show.

Around the same time that Calemine and Glushon were trying to persuade Bernson to support the zoning change, the three were cast in different roles in the secession proceedings.

A month after the city agreed to rezone the Northridge parking lot, Valley separatists submitted petitions calling on LAFCO to study secession. When a dispute erupted over the fee that LAFCO would charge them to review the petition signatures, they dispatched a lawyer to appear before LAFCO. The lawyer was Glushon.

So as LAFCO’s executive officer, Calemine was hearing Valley secessionists’ arguments from a lawyer whose firm would soon pay him more than $10,000 for work he had completed just weeks before on the health club parking lot.

And Bernson--the councilman whose support Calemine and Glushon were paid to seek--was one of the LAFCO commissioners overseeing the proceeding.

Calemine said he couldn’t recall what he did for the money. “I’d have to go back and dig it out of the files,” he said. “I don’t remember what color socks I put on this morning.”

In the end, the dispute ended when the county Board of Supervisors agreed to waive most of the petition fees.

The health club deal eventually fell apart, and Homeplace Retirement Communities of America Inc. entered the picture.

Commissioners Are Divided

The Del Mar developer paid Calemine more than $10,000 in consulting fees in 1999 for guidance on building an $80-million apartment complex for the elderly on the same lot. Calemine has “a pretty good knowledge of the inner workings of the city,” said Homeplace Chairman Stephen Taylor. “He’s someone who knows people. He can tell you who to go to.”

LAFCO Chairman Thomas Jackson said the commission and its counsel were “aware of Mr. Calemine’s business interests and have determined that no conflict exists.”

“Anyone suggesting a conflict of interest is unaware of Mr. Calemine’s high ethical and moral standards,” Jackson added.

But three other LAFCO commissioners said they were surprised by the scope of Calemine’s private business activities.

“It’s bad judgment,” said county Supervisor Zev Yaroslavsky, one of the commissioners.

Yvonne Brathwaite Burke, a county supervisor and LAFCO commissioner, questioned Calemine’s soliciting of Bernson’s support for a client’s zoning request, saying she would like a legal opinion.

“It certainly doesn’t sound like a good idea,” she said.

LAFCO Commissioner William Wentworth said he too was unaware of the extent of Calemine’s outside jobs.

Calemine has enormous power and responsibility at LAFCO.

If LAFCO concludes that secession is economically feasible, he would craft an Los Angeles breakup plan that could reshape Southern California’s social and political landscape for generations.

Using a consultant’s fiscal study, he must structure a proposed divorce settlement for the new cities and the abandoned portion of Los Angeles. He must set terms for water rights, police and fire protection and perhaps decades of “alimony” payments from one city to another. And he must propose a fair split of the city’s billions of dollars in debt and contracts.

Though the commission can revise any of Calemine’s plans, it is required by law to consider his recommendations when it decides whether to put L.A. secession proposals on the November 2002 ballot.

“We need his full-time attention,” Yaroslavsky said. “I don’t think you can do the LAFCO job and have a business simultaneously without one or the other suffering. It just is not appropriate.”

Calemine said none of his outside work distracts him from his government duties.

“If you passed by the office, you’d find me in here all day,” he said.

Calemine oversees an agency with three other employees and an annual budget of $570,000. Its often obscure work rises to the public’s attention only every few years. It approved the incorporation of West Hollywood in 1984, Santa Clarita in 1987, Calabasas in 1989 and Malibu in 1991.

Calemine’s contract requires him to work 40 hours a week for LAFCO, while limiting his outside employment to 24 hours a week. The commission provides him a car, parking allowance, medical coverage and retirement benefits. His salary has risen from $75,000 to $100,000 since the commission hired him in November 1995.

The full amount of Calemine’s outside earnings cannot be determined from the financial disclosure statements he has filed with the county, because income is reported in ranges, not precise amounts. From 1996 through 1999, the most recent figures available, Calemine put check marks in the “over $10,000” box 11 times.

In each of the four years, he reported a salary of more than $10,000 from Porter Ranch Development Co., the builder of a sprawling commercial and residential complex in the northwest Valley. In an interview, he would not disclose his full Porter Ranch salary.

“None of your business,” he said.

Porter Ranch has reported paying lobbyists hundreds of thousands of dollars to secure City Hall approval of the project, but Calemine is not one of them. He said he has no job title there.

“My job at Porter Ranch is to meet with my partners and give them the benefit of my real estate experience,” he said.

Calemine, 65, is a former manager of commercial property in the West Valley, including parts of Warner Center in Woodland Hills. He has spent decades building the City Hall connections he relies on to flourish as a self-styled entrepreneur. He offers his L.A. land-use expertise to out-of-town developers unfamiliar with the local political terrain--or at times to well-connected lobbyists and lawyers who need a zoning specialist.

“There are times when people come along and say, ‘Hey, look. We want to get a site going,’ ” Calemine said. “I give them my good advice.”

Before he was hired in 1995, Calemine told the commissioners he planned to maintain his private consulting business, prompting homeowner groups to warn of potential conflicts of interest. But Burke and Yaroslavsky said they knew of nothing beyond the Porter Ranch job.

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Times staff writer Patrick McGreevy contributed to this story.