Campaigns Largely Funded by Those With City Contracts

By Patrick McGreevy

March 4, 2005 12 AM PT

Times Staff Writer

The top contenders in the race for Los Angeles mayor, who will spend about $10 million before Tuesday, have raised hundreds of thousands of dollars from developers, attorneys and labor unions, many of whom have city contracts or other business with the city.

Four of the leading candidates have accepted large donations from contributors with projects or contracts that require the city’s blessing. Only state Sen. Richard Alarcon (D-Sun Valley), who has raised much of his funding from Sacramento sources, has largely avoided such donors.

The role of campaign contributors has been at the center of the race as Mayor James K. Hahn’s challengers repeatedly remind voters that federal and county grand juries are still investigating whether his administration gave preferential treatment to his donors.

Both Hahn and Alarcon have pressed to severely restrict donations from city contractors as a way to restore trust in City Hall. A year ago, Hahn proposed that those seeking and holding city contracts and land-use approvals be barred from raising funds or contributing to candidates while bids are being considered and for months afterward. Alarcon has offered a similar plan.

Rebecca Avila, chairwoman of California Common Cause and former executive director of the Los Angeles Ethics Commission, said such donations suggest improper influence.

“It raises the perception not only in the minds of the public, but with competing bidders,” she said, “that it’s not just about who is best qualified for the job and who is giving the city the best price.”

The top three candidates in Tuesday’s election -- Hahn, former Assembly Speaker Bob Hertzberg and City Councilman Antonio Villaraigosa -- collected considerable sums from lawyers who represent the city, developers with projects in Los Angeles and, in Hahn’s case, unions with city contracts.

With television advertising costing $300,000 or more per week, the candidates have sought cash wherever they can get it. And that has also meant raising most of their money outside the city.

Nearly 55% of the $2.9 million Hahn raised through Feb. 19 and the $1.7 million Villaraigosa raised came from outside the city. For Hertzberg, 52% of his $1.8 million came from beyond city limits.

Much of it comes from people who work in Los Angeles but live elsewhere. Hahn raised 77% of his money in Los Angeles County; Villaraigosa raised 76%, and Hertzberg more than 70%.

Beverly Hills, the home of many development and finance firms that do business in Los Angeles, was the biggest outside source of campaign cash for four of the top candidates.

Alarcon tapped Sacramento as his biggest source of campaign cash outside of Los Angeles, bringing in $34,299.

Hertzberg and Villaraigosa are former state legislators, and received $41,650 and $23,100, respectively, from Sacramento donors.

Hahn received $311,125 from out of state, including $48,500 from New York City. Villaraigosa took in $141,100 from outside California, and Hertzberg’s out-of-state take was $126,978.

Among the five best-financed candidates, only Councilman Bernard C. Parks received most of his cash, 62%, from Los Angeles. Parks said the other candidates’ heavy reliance on money from outside Los Angeles is a sign of what is wrong with City Hall.

“That shows what professional politicians do to get elected. They go to the special interests, which are strangling this city,” he said. “Our money comes from people who are going to vote.”

But Hahn campaign spokesman Kam Kuwata said the cost of elections makes fundraising outside the city “the reality.”

“We raise money from people who want Los Angeles to prosper and who believe in Jim Hahn’s vision,” Kuwata said. “Some of those people live inside the border of the city, and some live outside.”

A Times analysis of campaign finance reports found that Hahn raised a large share from law firms and their attorneys, who gave $311,000. Several of the firms have city contracts.

The contributions include $17,900 from attorneys with Manatt, Phelps & Phillips, which has received about $1 million in the last few years representing the city’s interests.

Hahn also received at least $208,000 from real estate firms, developers and construction companies, including some with projects in the city. Contributors that have depended on favorable decisions from Hahn’s administration include L.A. Arena Co. and City Centre Development, which is building an office tower with the city’s financial help.

The mayor collected contributions from two tenants at the city’s port, American President Lines and Maersk, and two at the airport, Southwest Airlines and Mercury Air Group.

He also raised money from BLT Enterprises, which the city has agreed to pay $57 million for a trash transfer station.

Hahn has received strong support from unions, which have donated more than $42,000 directly to his campaign. Those include unions representing police officers and LAPD command officers, firefighters, blue-collar city workers and Department of Water and Power employees, all of which have contracts acted on by Hahn.

“We see the mayor accepting all the money he says people should not accept from city contractors and developers,” said Ace Smith, the Villaraigosa campaign spokesman. “It’s hypocritical to say people shouldn’t take this money and then to take it yourself.”

The mayor, however, has said he is not going to unilaterally abide by rules that the council has so far failed to act on.

Villaraigosa raised $133,600 from law firms and attorneys, including O’Melveny & Myers, which has received more than $2 million from city contracts in the last few years.

And he brought in more than $70,000 in contributions from developers and real estate interests.

Among the largest donations, Villaraigosa received $19,000 from executives and their relatives with JSM Management, which has at least three housing projects assisted by the redevelopment agency.

The City Council, including Villaraigosa, voted in October to approve a development agreement between a firm affiliated with JSM and the redevelopment agency to build 196 housing units.

One of Villaraigosa’s major corporate supporters is the Westin Bonaventure Hotel, which gave $6,500 to his campaign. The hotel’s operator, Peter Zen, supported Hahn for mayor in 2001, but has since threatened to sue the city over the mayor’s support for a multimillion-dollar subsidy of a new 1,200-room hotel downtown. Villaraigosa has “very serious concerns” about the deal, according to an aide.

Hertzberg also received heavy support from development, finance and legal interests.

The Sherman Oaks attorney received $237,848 from law firms and attorneys, including $26,527 from Mayer, Brown, Rowe and Maw, and 35 of its attorneys. Hertzberg works for Mayer, Brown, and the firm has a contract with the city to provide outside legal help.

Hertzberg has also received at least $150,000 from developers and real estate interests, including $28,000 from Arden Realty and 32 of its employees. Contributors include Richard Ziman, the firm’s chief executive.

Arden is a major developer in Los Angeles. The City Council is scheduled to vote on election day on an agreement with Arden to build 600 residential units, a hotel and up to 488,000 square feet of office space next to the San Diego Freeway and Sepulveda Boulevard.

Hertzberg’s largest corporate contributor is Archeon International Group, which has done architectural work for the city. The firm contributed $5,000.

Parks has raised $770,821.

The former police chief has received at least $35,000 from real estate and development interests, including $7,000 each from developer Lee Turner and the Bedford Group.

The Bedford Group in August won City Council approval, with Parks joining in, of a zoning change to allow 102 apartments and 70 condominiums on Santa Rosalia Drive in Parks’ district. The council rejected appeals from neighbors concerned by its size.

Parks also received $6,000 from Regency Outdoor Advertising, which is currently in court fighting city restrictions on billboards.

Alarcon has raised the least of the five major candidates, bringing in $549,000, including $67,700 from law firms and attorneys, $32,300 from unions and trade groups and at least $4,450 from development and real estate interests.

Alarcon said it has been difficult to raise money from businesses in the city of Los Angeles, because many do business with City Hall and feel obligated to contribute to the mayor and other elected city officials.

Alarcon, however, is chairman of the Senate Labor and Industrial Relations Committee, and many of his contributions come from groups with an interest in his committee’s decisions.

The senator has received $7,000 each from the Utility Workers Union of America, California Applicants’ Attorney Associates and the California Society of Industrial Medicine and Surgery.

Alarcon, who has proposed banning contributions of $100 or more from city contractors and bidders, said voters should not support candidates who bankroll their campaigns with such donations.

“I think that’s exactly why the public does not trust politicians,” he said.

Times researcher Maloy Moore contributed to this report.

(BEGIN TEXT OF INFOBOX)

Campaign finance

The top five businesses, unions or trade groups that have contributed to the five major candidates for mayor of L.A.

*--* Mayor James K. Hahn Contributor Amount Laborers’ Int’l Union of North America, Local 777 PAC $6,500

Black Equities 5,000

Attucks Asset Management 3,000

Columbia Capital Management 3,000

Collis Associates 2,000 Bob Hertzberg Archeon International Group 5,000

In Due Time 5,000

DeMenno Kerdoon 4,000