Gifts from Restricted Sources

Gifts from restricted sources, that is, from those doing business with the local government (and their lobbyists), are exceptionally damaging, in that they make the public believe their officials can be bought or that their officials are running a pay-to-play government. It's too bad that at least some members of the Los Angeles ethics commission don't recognize this.

It is a problem that restricted sources are usually allowed to make large campaign contributions to candidates, but both sides argue that they have that right under the first amendment. However, there seems to be no excuse for restricted sources giving gifts to officials. This creates a clear appearance that they are buying preferential treatment and/or that the government works on a pay-to-play basis, whereby officials must be enriched by anyone who wants to do business with the city or county.

Since there is such a simple solution to this problem — banning all gifts to officials by restricted sources — it is surprising how rarely this solution appears in ethics codes, and how hard it is to get such prohibitions passed.

The Los Angeles City Ethics Commission is facing just this issue, at a time when there is a controversy involving the mayor taking numerous sports tickets from restricted sources. The EC staff put together an excellent memo on gifts for consideration by the EC. The staff recommended a ban on gifts from restricted sources, just like the ban on gifts from the restricted sources' lobbyists that already exists. There would be some reasonable exceptions to this ban (see pp. 3-4 of the memo).

As it is now, the state allows up to $420 per year per source, and the city allows up to $100.

According to an article in the Los Angeles Times last week, not only did the EC fail to accept the staff's recommendation at its August 10 meeting, but two members want to raise the city's limit from $100 to the state's $420. The EC president argued that making city and state law the same would make it easier for companies to comply, as if companies don't have compliance databases to consult and compliance professionals overseeing their compliance. If she really cared about making compliance easier, she would have spoken out in favor of striking all exemptions. They're what makes the compliance process complicated, not differing numbers.

The EC president is quoted as saying, "We are not lessening any of our regulations.We are not allowing for more corruption." That simply isn't true, and this statement ignores the importance of appearances to the gifts issue.

Ironically, the city comptroller, who selected the other EC member who spoke in favor of raising the gift limit to $420, has spoken out in favor of a total ban on gifts from restricted sources.

Robert Wechsler
Director of Research-Retired, City Ethics

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