California once was a destination for folks seeking instant wealth, miners hoping to strike it big in the Gold Rush.
Today, there's still “gold in them hills” – only the hills are our halls of government, where career politicians are immorally (if not illegally) profiting from their insiders' status. Consider this: the current chairman of the Congressional House Financial Services Committee made a fortune with a bet against the stock market just before the 2008 financial collapse – a wager he made after receiving “apocalyptic” information in a private meeting with the Fed chairman and the U.S. Treasury Secretary.
Here in the Southland, Countrywide Financial acknowledges swindling homeowners with billions of bad loans while the company was busy offering sweetheart loans to members of Congress. Our own city has seen a chorus of ethics violations and influence peddling from city officials. Advisors to these same city officials boast of “leveraging their elected office” to raise campaign donations and openly flout a new law intended to restrict city contractors from making campaign contributions.
Shameful, isn’t it? No wonder the public has little trust or respect for politicians. Elected office is meant to be an honor, not a road to personal riches.
Getting Fat at the Pay Window
Besides, it’s not as if the political class is struggling to make ends meet.
L.A.’s City Council members earn $178,000 a year (and that doesn’t include the perks – rich pensions, free cars and the like). That is more than six times the $27,000 per capita income of Los Angeles residents (up from less than four times in 1990) and 127 times the $1,400-a-year salary of San Antonio’s City Council members.
L.A.’s City Controller commands a salary approaching $200,000, nearly $60,000 more than California’s State Controller, almost $40,000 greater than the federal government’s controller in the Office of Budget and Management.
We more than generously compensate our city officials. They should return the favor with a guarantee to hold themselves to a higher standard of transparency and accountability than they now do.
Ethics Overhaul
My suggestion: Rewrite the City Ethics Code, which is outdated, and doesn’t make city officials abide by the same laws as ordinary taxpayers.
According to the city's code:
“Persons in the public service shall not make personal investments in enterprises which they have reason to believe may be involved in decisions or recommendations to be made by them, under their supervision, or which will otherwise create a substantial conflict between their private interests and the public interest. If, however, persons in the public service have financial interests in matters coming before them, or before the department in which they are employed, they shall disqualify themselves from any participation therein.” Seriously, who writes this stuff?
Something Heavily Wrong
Consider three hypothetical scenarios:
• The controller learns the city plans to sign a big contract – a game-changer for a particular business that is certain to send its stock soaring. The official buys stock before the deal is done. It’s not, however, a violation of city law if the official wasn’t involved in the decision process.
• A City Councilperson learns of a decision that will profit a company. So the Councilperson buys the stock and abstains from any votes pertaining to the company. Again, that's not a violation of existing city law.
• A City Councilperson solicits campaign donations from a business which relies on the city for almost all of its business. The business had important contracts signed while the City Councilperson was in office. Yet the contributions are claimed to be proper because the business does not have any “pending” contracts with the city. Whom do they think they are fooling?
The craziest part of all of this is, under current rules, any changes to city ethics rules has to be approved by the City Council, the same people those rules are meant to cover. Our city doesn't lack for problems these days, beginning with getting ordinary folks back to work.
The greatest challenge our city faces is rebuilding our economy and to do so we need public servants we can trust to work for Angelenos, not themselves. First things first, to put L.A. back to work, we need to make City Hall work again. That means changing the culture of entitlement and self-dealing at City Hall. It's time for a top-to-bottom reform of the city's lax ethics rules and bloated perks and compensation practices which undermine city government by feeding cynicism about our public institutions and elected leaders.
Will this solve our city's woes? Of course not. But change begins with trust – and the strongest form of trust is the assurance that, in Los Angeles, making the rules and bending the rules for personal profit don't go hand in hand.
Mr. Beutner is a candidate for Mayor of Los Angeles in the March of ’13 election, and this essay recently appeared in the Daily News.
