Proposed Ban on Contributions from Real Estate Developers

As you may recall, Los Angeles City Councilman Ryu and the City Ethics Commission (“CEC”) submitted competing proposals last spring to ban campaign contributions from real estate developers.  After several hearings, the City Council asked the City Attorney’s office to draft ordinances based on the two proposals, and the ordinances prepared by the City Attorney’s office are now pending before the Rules & Elections Committee.

The City Attorney’s office cleaned up some of the most glaring legal issues and policy problems with the proposals.  For example, the ban on contributions would no longer continue until the City issues a Certificate of Occupancy for a project (which could take years), and the CEC’s proposal would no longer apply to every employee of a consulting or law firm hired by a developer to work on a project; instead it would only apply to the “lead” consultant or attorney at each firm.  Also, the proposals would not start until fundraising begins for the 2022 elections.

Both proposals are still very broad (though the CEC proposal remains the broader one).  Both proposals would prohibit contributions from a property owner/applicant, 20+ percent owners of the property owner/applicant, and the Board president and C-suite officers of the property owner/applicant.  The CEC proposal goes further, covering contributions from subcontractors and the “lead” consultants, lobbyists and attorneys (as mentioned above); it would also prohibit fundraising by these individuals and entities.  The CEC proposal would apply to any “discretionary land use decisions,” whereas Councilman Ryu’s proposal would apply to a designated list of “significant” matters; it is unclear whether there is ultimately any difference between these two lists of covered projects.

Given the amount of effort and political capital which both Councilman Ryu’s office and the CEC have put into these proposals, as well as recent press coverage of political contributions from real estate interests to Councilman Huizar, we expect the Rules & Elections Committee to consider these proposals this fall.  We would also be surprised if the Council does not ultimately adopt some type of limitation on contributions from real estate entities, though the exact contours of the final limitation are unknown at this time.

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Feel free to contact a Sutton Law Firm attorney if you would like to discuss how AB5 may affect political campaigns.