This is an update to our previous Legal Update on developer campaign contributions in the City of Los Angeles. Since our Legal Update was published, the City Ethics Commission has revised its initial reading and concluded that the contribution ban does not extend to an external board member of a developer or property owner who does not serve in a role that is functionally equivalent to the Board Chair, President, CEO, CFO or COO. A revised Legal Update is below.
On June 8, 2022, new campaign contribution restrictions took effect in Los Angeles. Enacted as part of Ordinance No. 186477, City law now prohibits property owners and developers with “significant planning entitlement” applications pending before the City of Los Angeles from making campaign contributions to the Mayor, City Attorney, City Council, or candidates or controlled committees for any of these offices. The types of entitlement applications subject to the ban include general plan amendments, development agreements, density bonuses, site plan reviews, tentative tract maps and zone changes.
The contribution restriction runs from the date that the entitlement application is submitted to the City until 12 months after the City issues a final determination letter related to the entitlement or, if no letter is issued, the date the decision on the application is final. In addition to property owners and developers, the restriction applies to their “principals,” including their 20%-plus owners, Board Chair, President, CEO, CFO, COO and anyone who serves in the functional equivalent of one of those positions and anyone authorized to represent the owner or developer before the City Planning Department. The City Ethics Commission has informally opined, though, that the ban does not extend to external board members who do not serve in a role that is functionally equivalent to one of the above positions. Applicants must notify owners and principals that they are subject to the ban.
The law further requires entitlement applicants to register with the City Ethics Commission through the City’s Restricted Developer Filing System (ethics.rdfs.lacity.org/). This registration —which is publicly searchable on the Commission’s website (ethics.lacity.org/data/campaigns/restricted-developers)—requires applicants to disclose owner contact information and the names and titles of all principals. According to the Commission, the registration requirement applies to every pending project, even if the entitlement application was submitted prior to June 8, 2022.
Penalties for violating the ban can be harsh. In addition to monetary fines, willful conduct is subject to potential misdemeanor charges, and those who violate the law are prohibited from submitting new entitlement applications for 12 months unless there are mitigating circumstances.