Mayor’s fund raises concern;

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School district complaints point to a Villaraigosa committee, which may allow donors to circumvent contribution limits.

The Los Angeles Times

It is a dream come true for any politician: a committee that can raise unlimited money and spend it on almost any political or policy-related purpose.

And that’s exactly what Mayor Antonio Villaraigosa has enjoyed with his Committee on Excellence and Accountability, a fundraising vehicle he used to win authority over the Los Angeles Unified School District.

But attorneys for the school system say the committee has been operating illegally.

They have filed complaints with the City Ethics Commission, the county district attorney’s office and the state Fair Political Practices Commission. The issue could overshadow today’s hearing in the lawsuit over the new law giving Villaraigosa partial authority over local schools.

The mayor’s office has dismissed the complaint as frivolous, but experts in election law are not so sure.

“The question is: Is there an appropriate way for him to do this? Can the mayor raise money for lobbying that is not either for ballot measures or for candidates, and is there a limit to that?” said Bob Stern, president of the nonpartisan Center for Governmental Studies. “It’s a very important question. There’s also a real question whether you can use the money for litigation unrelated to a ballot measure.”

No one is accusing the mayor or his allies of criminal intent; a primary goal of the committee was simply to avoid using public funds to push the mayor’s school agenda. But if the committee operated improperly, state or local officials could levy fines and force the committee to return funds. Even if legal, such committees raise ethical issues, experts said, because they allow contributors to circumvent contribution limits by giving huge sums of money to causes favored by politicians.

Similar issues arose over Citizens to Save California, which was effectively controlled by Gov. Arnold Schwarzenegger.

State regulators decided that the committee, which funded ballot measures, had to abide by the same donation limits as Schwarzenegger’s campaign for governor. But Schwarzenegger and his allies challenged the rule and won in court; regulators have appealed.

Villaraigosa may face additional legal hurdles because of city laws and because his committee, registered as a state “ballot measure committee” never supported any ballot initiative until the day after the issue was raised in court in connection with the school district lawsuit.

The next day, the committee contributed $5,000 to the campaign for a package of state bonds, which passed, and $25,000 to Measure H, a city housing bond issue that failed. The committee later contributed another $5,000 to the successful state school bond. School district complaints point to a Villaraigosa committee, which may allow donors to circumvent contribution limits.

The mayor’s team insisted that the timing was just a coincidence.

Speaking after the first two contributions were made, Villaraigosa political consultant Ace Smith called the bond measures “tremendously worthy causes.” Villaraigosa, he said, is “proud to support them.” Smith said the goal of the committee is to do “good… stuff.”

But the critics are saying, in essence, that this dream set-up for a politician may indeed be too good to be true.

“It’s like a slush fund,” said Fredric Woocher, an outside attorney representing the school district. “In our view that’s illegal. If the mayor can do it here, it’s an incredible loophole” in local political financing limitations. “It makes a mockery of the city law.”

Woocher contends that city rules allow for specific kinds of political committees, typically with strict contribution limits.

An “office-holder” account, for example, limits donors to $1,000 per year and total funds to $75,000 per year.

The mayor’s committee, by contrast, raised more than $1 million in the first six months of the year; $500,000 came from a single donor, A. Jerrold Perenchio, chairman of Los Angeles-based Univision Communications Inc. The committee won’t report donations again until the first of the year.

Attorneys working for the mayor insist the committee doesn’t fall under city jurisdiction at all. There are no limits on contributions related to ballot measures.

The mayor could have formed a nonprofit to accept donations and avoided disclosing his donors altogether, said Jamie Court, president of the Santa Monica-based Foundation for Taxpayer & Consumer Rights.

“There’s at least transparency,” Court said. “Donors who want something from the mayor’s office could gain favor by giving unlimited money to the mayor’s cause. And we’re looking at an issue that could very well define his political future.”

The school district also has spent considerable money in the battle over control. Officials list legal fees to date at nearly $161,000 and lobbying fees at $225,000.

Critics have castigated the district for spending public funds.

The district hasn’t been as successful as the mayor in attracting donations, but officials took part in a fundraiser Wednesday at the exclusive California Club — from which the media was excluded.

The goal was to retire $150,000 in debt from a recent bond campaign, but anything left over could be used for other political purposes, including paying what one political consultant tabulated as a $100,000 debt from the fight over the mayor’s legislation.

Today’s court appearance is to settle whether the mayor’s legal team can work with the law firm of Munger, Tolles & Olson. L.A. Unified has objected on grounds that the firm formerly worked for the school system. Munger, Tolles said it was prepared to work free of charge if it couldn’t be paid by the mayor’s committee.

Last week, the City Council authorized $100,000 for legal work related to the case, if needed. A decision on the constitutionality of Villaraigosa’s schools law, which would take effect Jan. 1, is expected before year’s end.
Contact the author at: [email protected]
Times staff writers Jeffrey L. Rabin and Joel Rubin contributed to this report.

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