EDITORIAL WAIVING PRIVILEGE CITY GIVEAWAYS ARE ARBITRARY AND UNFAIR.

AT first glance, it all seems rather unseemly:

Los Angeles, a city that's cutting basic services while raising taxes, pays some 1,000 police and traffic officers overtime to protect the rich and famous at the Academy Awards each year, while Hollywood takes in $50 million from the event.

But we'll accept - for a moment - City Hall's argument that the benefits of subsidizing such events more than outweigh the costs.

As Lisa Hansen, spokeswoman for City Councilman Jack Weiss, puts it: ``There's no question these events have social and economic benefits. There's no question that they're good for Los Angeles, for the hotels, for taxes, for publicity and excitement.''

Fair enough. The Oscars bring much attention, prestige and money to Los Angeles.

But then, the same could be said for the Los Angeles Marathon, and marathon organizers - unlike the Academy - help to pay their own way.

In total, private interests pick up roughly a quarter of the $500,000 the city spends closing off streets and controlling crowds for the annual race, a steep price compared with the freebies enjoyed by the Oscars and many others.

Who pays for extra services, and who doesn't, depends - like much else in Los Angeles City Hall - largely on whom you know.

Technically, organizers have to repay the city for a portion of the special costs associated with their event, such as street closings, traffic control or police protection, but waivers are available and common - for those with the right connections.

For nonprofit and neighborhood groups, getting a waiver requires going to the local City Council representative, hat in hand, with the implicit knowledge that, some day, the local politician will come looking for a return favor.

For big businesses and other special interests that regularly trade favors with city leaders, the process is more routine. Free city support for events at Staples Center or Dodgers games, for example, is virtually automatic.

The result is a system that favors those who make a lot of money, and don't necessarily need the subsidy, at the expense of those who need it most. And those without City Hall connections, or whose event might not meet the latest definition of political correctness, are out of luck.

The problem isn't the existence of the freebies per se. Los Angeles benefits from a rich social and cultural life, and some groups couldn't afford to hold block parties, street fairs or other public events without a City Hall waiver.

Nor is the problem with big moneymakers, like the Academy or the Dodgers, getting the freebie, if, in fact, it's true that the city more than makes up for the loss in other ways.

The real problem is the arbitrariness of the system, which exposes the process to abuse and unfairness. It makes important city services one more goody that council members can distribute at their pleasure in their capacity as purveyors of privilege.

The city's chief legislative analyst is studying the waiver process, and expects to deliver a report to the City Council when it returns from its summer hiatus on Sept. 3. At that point, in the interest of fairness and saving taxpayer money, the council ought to take firm measures to reform the waiver process.

The city needs clear guidelines - with community groups and nonprofits getting the support they need and big businesses paying their fair share. Waivers ought to be given out on the basis of objective criteria, not subjective preference.