Opinion: L.A.’s disclosure ‘loophole’ that lets campaign donors to temporarily hide

On Tuesday, shortly before the polls closed, the campaign committee supporting Charter Amendments 1 and 2 filed a report showing that a handful of controversial donors contributed $137,500 to the cause of changing Los Angeles’ election dates.

The contributors included oil companies, whose group Californians for Energy Independence gave $15,000; the DWP employees union, which gave $25,000 while another local of the International Brotherhood of Electrical Workers chipped in $10,000; and the vice president of an outdoor advertising company, who kicked in $25,000.

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For the record

March 6, 2:06 p.m.: An earlier version of this post reported that Californians for Energy Independence contributed $25,000 to the effort to pass Charter Amendments 1 and 2. The group contributed $15,000.

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The filing wasn’t posted on the Ethics Commission website until Wednesday -- the day after the election. After voters overwhelmingly approved the ballot measures to move local elections to June and November of even-numbered years to coincide with state and federal contests. Also on Wednesday, the committee submitted another report showing that the Los Angeles Chamber of Commerce gave $35,000 to the campaign.

Would voters have cared that some of the city’s most powerful special interests had poured money into ballot measures that are, in theory, supposed to reduce the influence of special interests in elections and in City Hall? Probably.

Would a complete list of campaign donors have changed the results? Probably not. Charter Amendments 1 and 2 passed with 76% of the vote.

Nevertheless, the late filings denied voters important information about who was backing the ballot measures. And it was another example of how late — but legal — filings can temporarily hide donors’ identities.

In mid-February two independent political committees supporting City Council candidates sent out mailers that did not list the major donors who paid for them, Catherine Saillant and Emily Alpert Reyes reported. The city’s campaign finance ordinance requires that any communications sent on behalf of candidates by an independent committee must list at least two major donors.

But the names of major donors were missing from two mailers sent in support of incumbent Councilwoman Nury Martinez and four mailers sent in support of Steve Veres, who was running to replace termed-out Councilman Tom LaBonge.

Opponents cried foul and one good government advocate said the incident exposed a possible loophole that allows donors to evade the very purpose of the disclosure rules for independent expenditures.

Political consulting firm Shallman Communications handled both of the independent expenditures campaigns and the campaign committee supporting Charter Amendments 1 and 2. President of the firm, John Shallman, said the tight timeline of a campaign means consultants often work on credit and donor pledges. But the campaign doesn’t report the contribution until the check arrives, and the committee can’t control whether the check arrives two weeks before election day or the day of the election.

State law lets campaign committees accrue debt, so there is nothing wrong with sending out mailers before payment arrives. And if the city tried to prohibit a committee from spending money it hasn’t received, the city could be accused of limiting political speech.

Of course, it’s not hard to imagine that some donors will hold on to their checks until the last minute to avoid disclosure before election day. Or that some consultants might encourage a late check if the donor’s contribution could attract negative attention.

The Ethics Commission should look closely at the city’s campaign finance ordinance to see how to ensure major donors can’t evade timely disclose of their contributions. Otherwise, what’s to stop this loophole from swallowing the rule?

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