'STEALTH' POWER RAMPANT INFLUENCE PEDDLERS NOT ALWAYS REGISTERED.

Byline: Beth Barrett Staff Writer

Dozens of influential people who represent special interests - including union, business and nonprofit leaders -regularly schmooze city officials with little public scrutiny or accountability, according to a Daily News review of records.

Under city ethics laws, they are exempt from the stringent reporting requirements imposed on registered lobbyists - a group defined narrowly as those who earn at least $4,000 a quarter for meeting with city officials to influence legislation. A new law enacted this summer bars any commissioner from lobbying for any compensation, even as little as $1.

Yet calendars for Mayor Antonio Villaraigosa and City Council members for the past six months show numerous meetings with individuals representing a variety of city interests who aren't required to register as lobbyists and, in many cases, serve on city commissions.

Many of those exempt from filing fundraising and disclosure reports deny that they engage in any effort to influence legislation, although in a number of cases, the officials' calendars include details suggesting influence and special interests were, in fact, the purpose of the meetings.

Critics say the city's ethics rules have created a two-tiered system that lets L.A.'s most influential power brokers slip through the cracks, creating a ``shadow corps'' of unregistered lobbyists who can operate virtually without oversight.

And they say that after making good on a campaign promise to ban registered lobbyists from commissions, Villaraigosa has still appointed many people to commissions although they represent a wide range of special interests. ``When the mayor said he wouldn't appoint lobbyists to commissions, that's not accurate,'' said Steve Afriat, a registered lobbyist and president of the Los Angeles Lobbyists and Public Affairs Association, which has championed enacting a broader definition of lobbyist.

``He should have said he wouldn't appoint registered lobbyists - those that play be the rules, (instead) that he'd only appoint lobbyists who fly under the radar.''

'Zero tolerance'

Thomas Saenz, the mayor's counsel, said Villaraigosa hasn't been hypocritical, and has acted vigorously to ensure that commissioners follow a ``zero-tolerance policy'' on lobbying for compensation. Other rules restrict commissioners attempting to influence contracts, or otherwise being involved outside their official public role.

Saenz said he has conducted training sessions with commissioners and advised them about the limitations placed on them outside the formal commission meeting setting.

``We believe every commissioner, every employee should understand the ethics laws and the restrictions, and part of the ethics laws is avoiding the appearance of impropriety, and there it's a question of training,'' he said.

But he said changing the definition of lobbying from an issue of compensation to one of ``conscience'' would strike at the core of the First Amendment freedom of speech.

``There has been a policy decision by the City Council that lobbying without compensation is not restricted. Every individual has a First Amendment right, and they don't give that right up by virtue of (serving) on a citizen commission. The distinction is a matter of conscience versus those who are paid. That's not unusual at all.''

LeeAnn Pelham, the city Ethics Commission's executive director, said city law since 1967 has always included a ``compensation test'' to determine who's a lobbyist.

She said that remains a valid measurement, with the commission's focus on the role of money in influencing government decisions rather than access to government by people who aren't paid directly for their influence.

``Clearly, people wield tremendous influence on government and are not paid, and the commission historically has not seen that as warranting having to register with the government,'' she said, noting that the commission will investigate complaints about individuals or companies that may be skirting the law.

Changes needed

Ethics Commissioner and tax attorney Sean Treglia said changes may need to be made.

``In many cases, the rules should be expanded to capture some of the transactions or relationships that are occurring,'' Treglia said. ``As it stands right now, I don't think the disclosure system captures all the information we need to understand who's lobbying in the city.''

He has proposed a task force designed to clarify reporting requirements for lobbying fundraising activity in a move that he hopes will broaden into a comprehensive review and reform.

Afriat argues that union, business and other leaders who have unlimited City Hall access should be required to register as lobbyists because they are influencing legislation and are being paid to do it.

Jim Sutton, a San Francisco lawyer representing the L.A. lobbyists association, said unions do register as state lobbyists in Sacramento.

The state requires registration for in-house lobbyists who spend one- third of their time in a month lobbying, or for contract lobbyists who earn $2,000 in a month.

``The labor unions are registered in Sacramento, but not in L.A., San Diego or San Francisco,'' he said.

Sutton said municipalities have created a culture that discourages people from filing as lobbyists, even if they are influencing municipal legislation.

``There is this feeling if you register, then you're in the Ethics Commission's world and then they'll come after you. If you don't register, then you're off their radar screen,'' he said.

Influential leaders

Among dozens of influential leaders who have access to City Hall leaders is civic activist billionaire Eli Broad, the visionary behind an ambitious $1.8 billion plan to revitalize downtown's Grand Avenue.

Broad met with Villaraigosa on at least two occasions since last July, according to the mayor's calendar.

``Mr. Broad is not a lobbyist,'' said his spokeswoman Karen Dunne. ``He's not in business, doesn't represent anyone, and has no financial interest in the civic projects in which he's involved.''

Afriat contrasted Broad's role with that of Steve Soboroff, a senior adviser to former mayor Richard Riordan and now a registered lobbyist representing Playa Capital Co., who last year had a series of meetings with Tom LaBonge and other council members.

``Why should Steve Soboroff have to register as a lobbyist and Rick Caruso (developer of The Grove shopping center on the Westside and a former police commissioner) or Eli Broad not have to?'' Afriat questioned. ``They (all) have great access to City Hall. They do a lot of good for the city, but they also have business interests in the city and earn money from that.''

Others with city interests who aren't required to register are civic leaders such as heads of homeowner and other community groups with planning and other agendas.

Tony Lucente, president of the Studio City Residents Association, is a member of the Board of Neighborhood Commissioners whose access includes breakfast with Councilwoman Wendy Greuel at Chez Nous.

Lucente said he's a volunteer representing his community's interests.

``I think there's a significant differentiation between someone who this is their job and they're paid to lobby, and those of us who perform these community activities on a volunteer basis. The difference is, we don't have a personal financial interest in the outcome, and that is a substantial and significant difference.''

Nick Patsaouras owns multifamily housing projects in the city and is a mayoral appointee to the Water and Power Commission. He said his meetings with council members - including a November dinner with Reyes - are at their request, not his.

``I'm very studious not to mix public policy issues with business,'' Patsaouras said. ``You just don't talk about it. I've never discussed with the mayor business, or with any council person.''

Conflicts of interest

David Fleming, a Latham & Watkins attorney who was appointed by Villaraigosa to the Metropolitan Transportation Authority, doesn't register as a lobbyist.

Fleming said he's careful to avoid conflicts of interest and recuses himself from voting on matters that involve any of the firm's clients. Fleming said trying to monitor and regulate the myriad interests that seek to influence City Hall would be virtually impossible.

``It's too much to keep track of all that stuff. Politicians today talk about being more pure than Caesar's wife, but when push comes to shove in private conversations, everything goes.''

Councilman Dennis Zine said he hasn't been lobbied by commissioners, and said he trusts commissioners like Patsaouras to observe the rules.

``It depends on the council office, how open they'll be with people who request meetings.''

Council President Alex Padilla said he's satisfied that existing laws for lobbyists don't impede the legislative process, although he'll leave it up to the Ethics Commission to decide whether the rules should be changed.

``I don't see how the rules on the books have inhibited me as a council member to pursue my legislative agenda and get done what I need to get done for my district,'' Padilla said.

He said appointments noted on his calendar - including with leaders of unions, civic groups and lawyers not registered as lobbyists - are ``skewed'' because it doesn't reflect the large number of requests for meetings he turns down.

Councilwoman Greuel said she hasn't been lobbied by any commissioners - though she, like other council members, meets with them on various other matters. She said the city should look at lobbying reforms like the state's to ``improve transparency.''

Toward that end, some groups have voluntarily registered as lobbyists.

Brendan Huffman, director of public policy for the Los Angeles Area Chamber of Commerce, said his organization registers whether it meets the $4,000 quarterly threshold or not.

``We register because it's the right thing to do. We think the public has a right to know who influences public policy.''

Huffman said those who don't register essentially operate on an ``honor code.'' And that, he said, lets powerful interests work City Hall, violating ``the spirit'' of public disclosure where ``anyone trying to influence public policy decisions at City Hall should register.''

Beth Barrett, [phone]

beth.barrett(at)dailynews.com