CORRUPTION WATCH-On Wednesday, February 8, 2017, the Los Angeles City Council unleashed its latest volley of frauds perpetrated on the voters in its attempt to stop approval of Measure S, which would outlaw Spot Zoning. Spot zoning occurs when a developer pays the mayor and a city councilmember to “up zone” his property so that he can build a project which would otherwise be illegal.
One name for this practice is Pay-to-Play, which means that in order to get what is wanted from the City Council, a person must first make a payment to the mayor and city councilmember. A more commonly understood definition is Extortion-Bribery. These are two sides of the same coin.
The alternative system for approving projects is one of laws, where a citizen can bring a project to the city planning desk. If the project is legal, the city provides the permits but if the project is illegal the developer gets no approval.
Of course, the City employees cannot have the final word or else they would be “king of the hill” for this extortion-bribery racket. Thus, in a city run by the rule of law, there has to be a level of appeal and review so that Joe at the Planning Desk does not become a millionaire by approving illegal projects.
Although the rule of law system is laid out in the city’s planning code, it is not the actual process that exists. Developers do not start with the Planning Department. They start with the councilmember in whose district the developer wants to build.
The reason they go to the council office first is to find out how much to bribe the councilmember for an approval of the illegal project. Since this horse trading is done behind closed doors, no one in the public gets to see what the councilmember has demanded or what the developer will give in exchange. The first chance the public gets to see a project is after the deal has been struck.
The Purpose of Measure S the City Hates.
Measure S was placed on the ballot because many voters did not think the city’s zoning laws should be up for sale. The best way to stop the biggest sales was to make spot zoning illegal. The measure halts the up zoning for the mega-projects which have the greatest potential for abuse. The larger the project, the more the mayor and city councilmember can extort from a developer. As the LA Times showed, Garcetti got $60,000 from developer Samuel Leung while hundreds of thousands of dollars went to City Councilmembers for the district. Also, developer Rick Caruso “donated” $125,000.
The fact that Measure S focuses on mega-projects does not mean that much smaller projects are not part and parcel of this extortion-bribery racket. At least Measure S will take a big bite out of the corruption.
The steps that City Council proposed on Wednesday, February 8, 2017 are laughable in the way they ignore all the extortion-bribery machinations and provide zero relief to Los Angeles’ “planning problem.”
(1) The Proposal for Panel of Consultants to Write the Environmental Impact Reports.
The panel will include the same firms which presently write the bogus Environment Review Reports. The only new aspect is that the EIR writing firms will probably have to bribe their way on to the panel.
(2) Update the Community Plans.
The City acts as if some horrible force is preventing them from updating the community plans. Really, is Godzilla sitting on top of City Hall waiting to gobble up anyone who updates a community plan?
The mayor and councilmembers could have updated the Hollywood Community Plan any time after 2001, but Garcetti refused. As Judge Goodman wrote in January 2012, the city knew when the 2010 U.S. Census data was released that the plan was fatally defective. Instead, Garcetti insisted on using bogus data, causing Judge Goodman to reject the 2012 Update. The 1988 Community Plan was reinstated and Garcetti refuses to release a new one. Why would he when he can make millions of dollars off the 1988 Plan?
How Out-of-Date Community Plans Benefit the Criminals.
Here’s the great advantage City Hall criminals find in out-of-date community plans. When plans are out-of-date, projects are more likely to run afoul of community plans. That provides the councilmembers and the mayor a plethora of opportunities to extort money from the developers. When a plan is purposefully twenty-five years out-of-date, it does not sound so unreasonable to up zone. The voters say, “Oh well, the plan was so out-of-date that it had to be modernized,” all the while ignoring that the crooks who are shoveling cash into the pockets of elected officials are responsible for the plans being out-of-date.
Accounting Control Fraud Rules at City Hall.
Perhaps, Accounting Control Fraud would be taken more seriously if it had a sexier name. Look at RICO, enacted in 1970. It means “rich” in Italian (ricco) and it was directed at the Italian Mafia. Today the name would be politically incorrect, but in 1970, politicians considered it “smart marketing.”
Accounting Control Fraud applies to cities as well as to corporations like Enron. It occurs where the people in control use accounting to transfer the city’s money into the mayor’s and city councilmembers’ pockets and/or election campaigns.
As we often find out after the unanimous approvals, the City subsidizes these mega projects. Sometime even smaller projects like CIM Groups’ 5929 Sunset Blvd receive City subsidies. The Grand Ave project got $197 million, CIM Group’s Midtown Project allegedly got $42 million plus all the sales taxes generated at the site.
In 2015, Garcetti gave $48 million to help the $28.5 billion Westfield Corporation with its $250 million project in the San Fernando Valley. Westfield affiliates have contributed $950,000 to two Garcetti initiatives including Measure M to promote the 2024 Olympics in LA. Thus, Westfield gets $48 million from the City and Garcetti gets almost one million for initiatives to advance his career. Let’s remember that when Garcetti runs for office, he has the protection of the Citizens United case to take as much money as he wants from CIM Group, from Westfield, from the developers of Grand Ave, etc.
The pattern at LA city Hall is classic Accounting Control Fraud where the money leaves the city treasury for one purpose but works its way back to benefit the people who authorized the gifts.
The City Council’s Wednesday, February 8, 2017 resolutions did not even hint at stopping this type of criminal looting of the City treasury.
We have to mention the lynchpin of the massive multi-billion criminal racket which runs Los Angeles. The Vote Trading Agreement. This agreement requires each councilmember to vote Yes for every project proposed by another councilmember and in return, each councilmember must reciprocate with a Yes vote on every project on the city council agenda. That is why all projects pass unanimously.
Developers would not be giving Garcetti and the councilmembers millions dollars unless the money guaranteed their project’s approval. All a developer has to do is work a deal with one councilmember and when the councilmember places that project on the city council agenda, it will be unanimously approved. Without a vote trading pact, when it comes time to approve a project, Wesson might say, “Well, I don’t know,” and then a few others may say the same. Soon there would be no majority.
That is the genius of the Vote Trading pact – a developer only has to buy off one councilmember and the mayor and in return he gets a guarantee that his project, not matter how illegal, will receive unanimous approval without a single dissent. Of course such a system of extortion-bribery can never survive any coherent planning.
Nothing the City Council suggested on February 8, 2017 to stop Measure S addresses any of our problems. Corruption trumps planning.
(Richard Lee Abrams is a Los Angeles attorney. He can be reached at: Rickleeabrams@Gmail.com. Abrams views are his own and do not necessarily reflect the views of CityWatch.) Edited for CityWatch by Linda Abrams.