2 Agencies Probing Pacheco’s Group

In his push to become a top player at Los Angeles City Hall, Councilman Nick Pacheco has found himself entangled in an expanding controversy involving a nonprofit organization that is being scrutinized by city and county officials.

That nonprofit, CAL Inc., emerged as a peripheral player in a controversial phone call placed to thousands by Rep. Xavier Becerra’s mayoral campaign. The organization owns the phone bank that was used for the calls, in which a woman impersonating Supervisor Gloria Molina attacked mayoral candidate Antonio Villaraigosa.

But city ethics officials and the Los Angeles County district attorney’s office are more interested in how Pacheco steers contributions from lobbyists to CAL Inc., which in turn uses the money to conduct community and political outreach.

Also, the Ethics Commission several months ago fined Pacheco $10,000 for making an improper loan from his officeholder account to La Colectiva, a political outreach organization, and failing to fully disclose 131 contributions to his City Council campaign. La Colectiva operated Becerra’s telephone campaign and sent out the Villaraigosa attack calls.

Pacheco said city ethics officials recently met with him and his attorney to learn more about CAL Inc., which stands for Community Action and Leadership, and whether he was “selling” his vote to lobbyists who give money to the organization.

Officials for the district attorney’s office said last week that they, too, are probing Pacheco’s group.

Because the group is registered with the IRS as a nonprofit organization, it is not regulated by campaign limits, and it is not required to follow disclosure laws associated with political action groups. Pacheco has so far declined to release the details of the group’s fund-raising activities, but his elections attorney, Stephen Kaufman, said CAL Inc. has raised about $145,000.

Pacheco said he set up CAL Inc. shortly after he won his Eastside council seat in 1999 to empower his district through outreach and leadership training. He said in interviews that he has made an aggressive effort to tap city lobbyists and downtown business leaders to contribute at least $10,000 to the nonprofit.

“The thing I’ve told corporate America is my success as a council member depends on my success in the community,” Pacheco said. “Help my community and I will be receptive to helping you.”

Several lobbyists said in interviews that they have felt unusual pressure from Pacheco to contribute to CAL Inc. None wanted their names to be used because they do business with the city. Other lobbyists said they had no problem with Pacheco’s solicitation of donations and didn’t feel they risked retaliation if they chose not to contribute.

“I feel I have to raise money for every member of the City Council in order to get access,” said one prominent city lobbyist. “But with Pacheco, the appetite is much more insatiable. It’s very intimidating. Everyone has been squeezed on different levels.”

Pacheco denies that he is forcing people to give to the group.

“That’s just silly,” said Pacheco, who represents parts of Boyle Heights, downtown Los Angeles, Mount Washington and Eagle Rock. “Tell me who these people are so I can apologize.”

He said, however, that he has told lobbyists and the downtown business leaders that he will be “receptive” to them if they support his community by diversifying their boards and contributing to charities in his district.

He said CAL Inc. focused its fund-raising efforts on those leaders because they are in the best financial position to make donations.

“Whom am I going to ask? The mom and pops? The janitors in my district? This is a total win-win,” Pacheco said.

Also, he said, the lobbyists organized against him when he was running for office and now is their time to make amends by supporting his district. “You want my official comment on the lobbyists?” the councilman said. “When I got into City Hall, I told them that they didn’t get me elected and they have a responsibility to give to the community.

“Before they come knocking on my door, I want to know what they are doing in the community. The community got me elected,” he said.

A number of prominent lobbyists are listed on CAL Inc. literature as members of its finance committee. To be on the committee, a member must agree to raise or contribute $50,000. Among them are Steve Afriat, who recently represented House of Blues in its efforts to win the Greek Theatre contract; Howard Sunkin, whose clients have included Los Angeles cable operators; and Maureen Kindel, who has lobbied on behalf of AT&T.;

“I have read the bylaws of the organization, and it’s very clear it’s for organizing the community in Council District 14,” said Sunkin, who declined to say how much money he provided to the group.

“I believe elected officials should figure out any and all ways to reach out to their community at a time when term limits don’t give you that luxury. You have to communicate as effectively as possible . . . You have to hit the ground aggressively.”

Lobbyist Approached at Council Meeting

Others are more critical.

One lobbyist said he was recently approached by Pacheco’s staff during a council meeting and asked when he planned to make a contribution to the group.

Another said he was told that his client would never get Pacheco’s vote on his project unless he gave to the group. “He has been very direct. When I went to him to discuss my project, he said, ‘What are you going to do in my district?’ ”

After consulting with his lawyer, the lobbyist said he told Pacheco that he was not in a position to make a contribution to the councilman’s group or any other in the district. Ultimately, the source said, Pacheco voted in favor of his project.

“I figured he was just bluffing,” said the lobbyist, who has worked in city politics for more than a decade. “Even so, I’ve never seen anything like this.”

Pacheco said LeeAnn Pelham, the executive director of the city Ethics Commission, bluntly asked him several weeks ago if he was “selling” his vote.

He said he told her, “It would be stupid for any council member to sell votes.”

Pelham declined to comment for this story.

Supervisor Molina, who endorsed Pacheco’s rival in his council race, was among those expressing dismay over Pacheco’s actions.

“It just seems as though he has taken this road that has made him a very different person than the one I used to know,” said Molina, who has found herself at odds with Pacheco on a number of issues. “He has gotten involved in being in power and raising money and being thought of as a power player.”

In just his first term in office, Pacheco, 37, has set his sights on becoming the next council president. For several months he has been campaigning for the job among his peers and City Council candidates. Beyond the council chambers, he has been very active in endorsing political candidates and helping them raise money. Most notably, he encouraged Ed Reyes to run against state Sen. Richard Polanco, who briefly entered the race for the 1st Council District.

In recent months, he also has concentrated his efforts on CAL Inc. His sister-in-law is the president of its board of directors, which includes six people, all of them unpaid. One of Pacheco’s top council aides is also listed as a board member.

Recently, the group hired a neighborhood outreach coordinator to launch efforts to get the community involved in the city’s new neighborhood council program.

But Pacheco said that so far the group’s biggest accomplishment has been setting up the phone bank, which cost $125,000. He said La Colectiva--run by Pacheco’s childhood friend, Martin GutieRuiz--was expected to operate the phones until CAL Inc. has enough money to hire its own staff.

“People are already prejudging [CAL Inc.] before we got the work product in place,” Pacheco said. “We are just starting to ramp it up. The work will speak for itself.”

He added: “I don’t see why I’m any different than anyone else who supports community groups.”