CORRUPTION WATCH-Poor Steven Mnuchin. People do not see the fiscal nightmare facing the Secretary of the Treasury designate, Los Angeles’ own Steven Mnuchin. The nation lived through the Crash of 2008 and well into 2009 with little Timmy Geithner. Now, in 2017, few people realize that the current upswing in the business cycle -- with the Dow-Jones approaching 20,000 -- signals an incipient financial crash. 

Poor Steven Mnuchin. Trump labors under the notion that the “latest, best and greatest” economic theory is Mercantilism, which is actually from 1550. He thinks forcing manufacturing to be done within the U.S. and raising tariffs will improve our economy. But Trump’s protectionist policies cannot cure unemployment. (General Theory, Ch 23 ¶ 3) And introducing inflation into the new car market will not help the middle or lower classes. To the extent that Trump increases the cost of new cars by insisting they be manufactured here, he will retard the car manufacturing economy. We assume that Mnuchin knows this and should know how to head off these problems caused by Mercantilism. 

Poor Steven Mnuchin. Due to the gross economic incompetence of the Obama Administration, he will have to re-wind history and first undertake measures that Obama-Geithner failed to take, such as: 

1) Replace Dodd-Frank with a beefed up reinstatement of the 1933 Glass-Steagall Act. “Beefed up” means closing the loopholes that the GOP courts had cut into Glass-Steagall.   

2) Outlaw Credit Default Swaps (CDSs) which are weapons of mass economic destruction. CDSs are criminal evasions of insurance laws. 

3) Insure all residential mortgages and require all LLCs and LLPs that own residential real estate to disclose their real party in interest. This form of mortgage insurance is based on the income of the actual human beings who are liable for the mortgages, and thus, their identities have to be known. The side benefit of such disclosure is that it kicks the money laundering of drug kingpins and foreign oligarchs out of the residential real estate market. The government has a duty to make certain that the value of residential real estate is based on its value as living space and not on other illicit motives. 

4) Reinstate the portions of the 1936 Commodities Exchange Act which limited the participation of Wall Street speculators like Mnuchin’s Goldman Sachs from the commodities market. The purpose of investment houses is to find investment capital for businesses and not to make money in commodities where it has no underlying stake in that commodity. 

5) Stop the Corruptionism in the housing industry which is leading to the Federalization of Local Debt. 

Los Angeles Corruptionism and the Federalization of Local Debt 

Poor Steven Mnuchin: While the Secretary designate no doubt knows about this looming disaster, no one in Congress has a clue. As a result, during his confirmation hearing set for Thursday January 19, 2017, he will not be grilled about this on-going problem which has led to horrendous inflation in the housing market. How can he ward off what no one else knows is coming? 

What Is the Federalization of Local Debt? 

Corrupt local governments like the LA City Council and our Mayor Eric Garcetti are seizing control of the “stimulus” mechanism of Keynesian economics. Allowing a local government to rack up so much debt that it can never pay its bills is like giving a nursery school toddler a bunch of matches and a can of gasoline, and then asking, “Gee what went wrong?” Yet, this is exactly what the Obama Administration has done nationwide. 

Unless the Trump Administration takes the matches and gasoline away from Eric Garcetti and the mayors of other major American cities, these cities will pile up so much debt trying to stimulate their local economies that the federal government will have no choice but to provide massive municipal bailouts. The Trump Administration will then lose control of the national economy. 

No Administration Can Allow Local Governments to Abuse the Keynesian Stimulus Protocol 

Poor Steven Mnuchin: His own home city of Los Angeles is intentionally running its debt up so high that it cannot possibly pay it, ensuring that the federal government will have no choice but to bail us out. The Villaraigosa and Garcetti Administrations have brought economic disaster on LA. Their plan to stimulate the local economy was and is based on a fool’s understanding of Keynesian stimulus, that just spending billions will do the trick. And the Garcetti Administration apparently believes it can escape bankruptcy because LA is “too big to fail.” 

How Corruptionism at LA City Hall Is Destroying Our Economy 

The City of Los Angeles has already destroyed the proper relationship between the marginal efficiency of capital (MEC) and interest rates for the housing market. Because the housing market is so large, its fall-out has harmed the entire LA economy, prompting the middle class to abandon the City. 

From a macro-economics point of view, the government, when making investments in private projects, has to assess factors that businessmen may ignore. When investing in a private project like Hollywood-Highland or the Grand Avenue Project, LA must take into account other costs which will be required of it if the Project is built -- basically the cost of additional infrastructure. Explicitly, a city needs to consider not only the interest it has to pay on loans to the Project but also the cost of infrastructure that will service the project in order to calculate the profit the City must receive from that project. (Since the City does not operate on a Cash Basis, it has to pay interest on all funds given or loaned to a private project.) 

For a city, the amount of its incremental tax revenue on a project is its profit. Thus, the City which invests in a real estate project like the CIM Midtown Project in City Council President Wesson’s CD 10 has to make sure the additional taxes flowing into the public treasury from the City’s investment will exceed not only the interest rate the City pays for money it borrows to “lend” to CIM Group, but that the project’s tax revenue will more than pay for all the necessary infrastructure upgrades including roads, water, power, police, fire and paramedics. (One also has to consider “retroactive gifts” where the City co-signs for a developer’s loan on which the developer will then default.) 

Unless a City can guarantee its investment in a project will generate more in taxes than the interest rate and more than the costs of infrastructure, the investment will have a negative Profit. (Donald Trump would certainly tweet out “Loser.”) Because of the vast corruption in the Los Angeles City Council, the city usually gives sales taxes and often gives the incremental property taxes to developers. When their LLCs or LLPs go bankrupt, the loans made by or guaranteed by the City are repaid to Wall Street from the City coffers. This is how Los Angeles is building its way into bankruptcy. 

How De Facto Negative Interest Rates in the Housing Market Harm the Entire Economy 

Projects with a de facto negative interest rate attract private investment capital to bad projects. This misdirection of private capital then harms the rest of the economy by depriving more productive ventures of the capital they need. 

Un-repaid Loans Increase the City’s Losses 

The harm of a de facto negative rate of interest is magnified when the City does not require repayment of the loaned funds. Such a situation is fraught with corruption as the developer will then be induced to “over pay” for product and pocket the difference between the “book price” it alleges it is paying for goods such as steel and the lower actual price. A lender that demands repayment will scrutinize suspect purchases, but when the City forgives loans or pays off Wall Street loans for a developer, no one asks any questions. 

One variant of this type of this skimming is developer’s purchasing lower quality steel for projects while the books show the purchase of a higher quality. When the steel is manufactured far away from the construction site, let’s say Chinese steel is purchased for high rises in earthquake prone downtown Los Angeles, there is no way to ensure quality control. 

As an aside, the Mercantilist contingent of the Trump Administration should be concerned when the Chinese government, acting through CORE, invests $200 million in the Grand Avenue Project; the City is obligated, behind the scenes, to purchase Chinese steel. As a result, American steel producers are closed out and the money ends up back in the pockets of the Chinese government. Economically speaking it is similar to Los Angeles’ building its new skyscrapers in Beijing. 

CRAs and EIFDs Guarantee the City will Slide to Bankruptcy 

When the City uses entities like the now-defunct Community Redevelopment Agency or a misleadingly named Enhanced Infrastructure Financing District (EIFD), all the profits (incremental taxes) go to them, reducing the City’s profit to zero. Zero rate of return for the City is a huge gift to the developer since the CRA or EIFD then give the City’s profit back to the developers. Even if a project is a terrible failure by traditional measures, it will pay some taxes (the city’s profit) but all that money comes back to the developers. 

Because even financially disastrous projects can make money for the developer, money flows towards these projects. It is similar to Wall Street executives’ manufacturing defective bundles of mortgages and then buying credit default swaps [CDSs] on them. Although the investment vehicle will crash, the executives will realize huge personal paydays. When they repeat this corrupt scam a sufficient number of times, the firms issuing the CDSs go bankrupt or the government pays trillions of dollars to bail them out. Likewise, a city that has CRAs or EIFDs and invests in foolish projects like Hollywood-Highland or Grand Avenue, will run out of cash to pay its debts. 

The Keynesian Duty to Protect the Price Structure or Why Los Angeles Has Run-away Inflation in its Housing Market 

Adam Smith, Friedrich Hayek and John Maynard Keynes accepted as axiomatic the need for the government to protect the Price System. In the housing market, the cost of homes has to represent their value as living space. Residences cannot continue to be vehicles for financial speculation and corruptionism, as has occurred in Los Angeles. 

After Governor Schwarzenegger vetoed AB 2531 in 2010, which was Garcetti’s attempt to bring Kelo eminent domain to the entire city of Los Angeles, and after Governor Brown staved off bankruptcy by abolishing the corrupt Community Redevelopment Agencies in 2012, the City of Los Angeles under the leadership of then-City Council President and now Mayor Eric Garcetti went hog wild into Spot Zoning. Despite the warning by Planning Director Gail Goldberg in 2006 not to let developers dictate the zoning they wanted for their projects, Garcetti’s policy has been to up-zone any property the developers want, subject apparently to a hefty contribution to his Mayor’s Fund. Developer Leung paid $60,000; developer Caruso paid $125,000.   

From the macro-economic perspective, the extortion-bribery aspect of the Los Angeles housing market fuels the destruction of the Price System for housing based upon the its value as living space. The value of housing now reflects its speculative value. By allowing any property to be up-zoned upon the payment of the appropriate sums of money to the mayor and city council, the middle class has been priced out of the single family housing market and they are moving away from Los Angeles. 

This irreversible brain drain of the Gen Xers and Family Millennials impacts all other segments of the Los Angeles economy. People “osmosisize” themselves away from areas of high cost and low opportunity toward areas of low cost and high opportunity. 

This dynamic explains why developers are lining up to build in Los Angeles, while the real demand for housing is declining. With a de facto negative rate of interest where developers make money even if a project is a financial failure, building mega office towers and hotels based on this type of corruption makes them fantastically wealthy. (The demand for housing for Los Angeles’ poor is up because Garcetti has been destroying rent-controlled properties in order to manufacture additional homelessness so the public will approve billion dollar bonds for his developer friends.) 

Poor Steven Mnuchin: The State of California and the City of Los Angeles have already reached the insolvency point. Last week Governor Brown announced a $1.6 billion deficit and the City of Los Angeles lacks the funds to pay all the judgments from its liability lawsuits. Within a short period of time, Mnuchin will be forced to bail out the City of Los Angeles. When Federalization of Local Debt rescues Los Angeles, how can the Trump Administration deny it to NYC, Chicago or Cincinnati?

(Richard Lee Abrams is a Los Angeles attorney. He can be reached at: [email protected]. Abrams views are his own and do not necessarily reflect the views of CityWatch.) Edited for CityWatch by Linda Abrams.

LA … WHO ARE WE?--The brilliant new film musical La La Land is being celebrated as a love letter to Los Angeles. But the darker heart of the movie lies in a brief and devastating critique of Southern California, delivered by the jazz pianist played by Ryan Gosling.

“That’s LA,” he tells his lover, an aspiring actress played by Emma Stone. “They worship everything and they value nothing.”

There has been no better recent summary of the California struggle—with the very notable exception of the 2015 novel, The Sellout, whose author Paul Beatty recently became the first American to win the prestigious Man Booker Prize for Fiction.

La La Land and The Sellout seem very different. On the surface, the film, an Oscar favorite, might appear to be a glossy escapist romance about white artists who hang out in Griffith Park. The novel is a taboo-trashing racial satire about an African-American urban farmer of watermelons and artisanal weed who reintroduces segregation to his neglected South LA neighborhood, ostensibly in hopes of putting it on the map. (His real agenda is even more deliciously subversive).

But the film and the novel are two of the most thought-provoking and entertaining documents of today’s California. And both are about the same big problem: that for all our celebration of successful game changers in this state, we offer precious little space or support to those who dare to upset our blissful status quo.

The film and the book also make the same provocative argument about how to break through the Golden State’s stacked deck: Don’t be afraid to do things that are totally nuts.

To make an impact here, you must embrace, and express, your inner madman. Both works specifically champion a self-sacrificing craziness, a willingness to surrender yourself and the people you love to focus on making your mark. Here, hitsville and heartbreak are two sides of the same heavy coin.

La La Land makes a straightforward case for crazy. Gosling’s musician is the film’s romantic hero, because of his uncompromising commitment to restoring traditional jazz even though he can’t pay his bills because the rest of the world is abandoning the form. Stone’s frustrated actress only inches closer to the red carpet when she devotes herself, against conventional wisdom, to producing her one-woman play in a theater she can’t afford to rent.

And in the audition scene in which she finally breaks through, she embraces the virtues of craziness in song: “A bit of madness is key to give us new colors to see. Who knows where it will lead us?”

Both the film and the book wrestle with the conflict between loyalty to one’s dreams and selling out—and in the process point out just how hard it is here to tell the difference between the two.

Beatty’s novel similarly suggests that, to smash through the California looking-glass world, the sanest course may be to go right over the edge. The farmer refuses to accept the city of LA’s erasure of his minority neighborhood (it’s called Dickens, in one of Beatty’s winking allusions to artists who embraced thorny social themes). And so the farmer fights this fire of systemic discrimination by violating dozens of laws and cultural norms. Most outlandishly, he takes a slave, who helps him segregate the local school, hospital, bus line, and businesses to the advantage of racial minorities. (He puts up signs reading “Colored Only” and “No Whites Allowed” all over Dickens).

Beatty’s satire is so rich and layered—no one is left unskewered, from white supremacists to our first black president—that it’s futile to attempt to convey it in a short column. But I will mention two of the most provocative parts of the politically incorrect plot—how long it takes for anyone outside the community to notice the farmer’s segregation edicts, and how, through the farmer’s loopy and unconstitutional acts, seeds of tolerance and kindness (lower crime, higher test scores, more polite behavior) take root.

“The racism takes them back,” the farmer explains. “Makes them humble. Makes them realize how far we’ve come and, more important, how far we have to go.” And it is only through embracing racism that the farmer makes his impact—and a point. As a judge in the novel remarks, “In attempting to restore his community through reintroducing precepts, namely segregation and slavery, that, given his cultural history, have come to define his community despite the supposed unconstitutionality and nonexistence of these concepts, he’s pointed out a fundamental flaw in how we as Americans claim we see equality.”

The Sellout and La La Land keep the reader and viewer enjoyably engaged and off-guard because they leaven their tough messages with comedy (the movie takes on screenwriting and the Prius, while the novel imagines “the Untouchables” in its caste system as starting with Clipper fans and traffic cops). And both works, for all their high ambition, fall back on some wondrous magical realism as an escape hatch from the difficult tonal and political juggling acts they perform. The La La lovers literally float into the stars through the ceiling of the Griffith Park Observatory, while The Sellout Metro bus becomes a rolling party that ends with the vehicle being driven into the Malibu surf.

The Sellout feels especially current because it breaks political ground, even becoming the first artwork to satirize our state’s fastest-rising representative, Attorney General-turned U.S. Senator-turned-presidential wannabe Kamala Harris. Once the farmer is finally arrested, an unnamed black-and-Asian-American California attorney general shows up in Prada shoes to prosecute him for violations of major civil rights laws, the 13th and 14th amendments, and six of the Ten Commandments.

Both the film and the book wrestle with the conflict between loyalty to one’s dreams and selling out—and in the process point out just how hard it has become to tell the difference between the two. And both get at a painful paradox. We know we must hold onto real people and real things, to be truly human. But in LA, we learn we must loosen our grip on reality to get noticed, and get ahead. It’s not just lonely at the top; it’s lonely on the whole journey up the California mountain.

In this way, both masterpieces ultimately raise the question of whether making your mark here is worth the cost. It may be that the real winners in this California are those who don’t bother to play the game and navigate the hurdles to ambition—and instead plop themselves down in unfancy places where they can enjoy warm weather and their loved ones in blessed obscurity.

No character in the book or the movie is happier in Beatty’s satirized world than the farmer’s slave, an aging actor named Hominy from the 1950’s TV show Little Rascals who refuses all efforts to free him. Trying to be a star in LA is so confounding that he prefers the simplicity of servitude.

“I’m a slave. That’s who I am,” he insists to the farmer. “It’s the role I was born to play.”

After all, if you’re going to live in a place that values nothing, then why fight so hard to be something?

(Joe Mathews is Connecting California Columnist and Editor at Zócalo Public Square … where this column first appeared. Mathews is a Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010).)

-cw

CORRUPTION WATCH-Hamlet anguished over “To be or Not to Be,” but in November, 2016 Californians quickly answered the question of “To Kill or Not to Kill” with a rousing “Kill ‘Em.” Then Californians slapped on an addendum – “Kill ‘Em Faster.” 

Prop 66 also gives a lot of power to the trial court judge who has presided over a legal case to thwart an effective review of the conviction. Due to legal challenges, the California Supreme Court put Proposition 66 on hold and Chief Justice Tani Cantil-Sakauye and Justice Ming Chin had to recuse themselves from hearing the case since they are two of the defendants. The Los Angeles Times has discussed the procedural aspects of this case.

We Cannot Entrust Our Lives to the California Courts 

California’s judiciary is an ethical swamp. As briefly discussed in a prior CityWatch article, California’s court system is a disgrace to the notion of justice. 

People who are used to living within a polluted environment come to accept the status quo without question. In the 1950s many people inhaled the exhaust of buses, feeling good about the sign of progress, oblivious to the dangers of lead poisoning and other toxins. Many people fought against cleaning the air and still argue in favor of smog and against a clean environment. When assessing the State of California’s judicial ecology, take a look at the air quality in Beijing during one of China’s smog alerts. 

This China analogy provides a rough idea of the polluted nature of California’s judicial climate. In November 2016, Californians voted against cleaning their judicial system of one of its worse carcinogens by retaining the death penalty. Then they went a step further to ensure that innocent people are put to death. This language may sound strong to many, but they do not know the rot which has eaten away the moral fiber of our judicial system. 

Given the number of people nationwide on death row who have already been found innocent, California could have about 30 innocent people awaiting execution. Prop 66 would reduce the chance of ascertaining who is innocent before they are executed. Prop 66 gives new meaning to the phrase, “Speed Kills.” 

The Courts Have Brought Us Some of California’s Most Memorable Murders 

Fifty-four people died in the aftermath of the exoneration of the police officers in the Rodney King trial held in Simi Valley. Angelenos do not know, however, how the California State court maneuvered the acquittal of those police officers (two of whom were subsequently convicted of federal civil rights violations in the federal court room of Judge John G. Davies.) 

Back in 1992, the Law and Order judiciary feared that if the police officers involved in the 1991 beating of Rodney King were tried in the downtown criminal courts building, that a Los Angeles jury would convict them. The feeling was the same if the trial were to have been held at the Van Nuys Criminal Courthouse, which served the area where Rodney King was beaten. 

Thus, a bogus claim was made that the LAPD Officers could not get a fair trial and the case had to be moved. The California appellate court came up with two alternatives: Oakland which they knew would be labeled too expensive by the District Attorney’s Office, and Simi Valley, a nearby bedroom community for police officers. Gerrymandering the location of the trial made an acquittal a foregone conclusion and thus the court laid the ground work for the deaths of fifty-four innocent people. Had the California courts allowed the prosecutions to proceed in a fair manner, the State court outcome would most likely have mirrored the officers’ later convictions in federal court where two of the officers were found guilty and served prison time. 

The Rodney King case was not the first time the California judiciary has been implicated in outrageous injustices. Anyone who has spent time in courtrooms gains a sense of when something hinky is going on. The situation was worse with the LA criminal courts since many of the judges were former prosecutors who worked closely with the District Attorney’s Office to obtain convictions. 

In 1988, a furor arose over the Los Angeles DA’s use of jail house informants due to their persistent committing of perjury, later upheld in an appeal.  

For our purposes, the most significant fact is that many judges are former prosecutors. The judges knew that lying jailhouse informants were being used. Before they were judges, they had worked in the DA’s office where the use of lying jailhouse informants was routine. 

In the Mid-1990s We Were Explicitly Told that Innocent People Were Being Set up 

After pleading no contest to a perjury charge in 1996, Detective Mark Fuhrman of OJ Trial fame, asserted that “all true cops lie, cheat and set people up.” But no one wanted to hear the truth, especially from a disgraced cop whom they incorrectly blamed for the loss in the OJ trial. (Fuhrman’s perjury conviction was later expunged.) 

Before the end of the 1990s, we learned about the scandals at the Ramparts Division with the LAPD being placed on parole under the supervision of the United State Department of Justice, effective June 15, 2001. Once again, criminal court judges are very often former prosecutors who work very closely with the police. As we saw with the use of lying jail house informants, as former assistant district attorneys the judges had to be well aware of the illicit procedures by the district attorney and the police. The Rampart Scandal could not have existed without the support of the judges who allowed the unconstitutional abuses to grow to such proportions that the LAPD ended up having its own “Parole Officer” from 2001 until 2013. 

While the LAPD emerged from the Consent Decree in 2013 as a transformed institution, the public never learned about the role the judges played in the use of jail house informants and condoning the abuses which resulted in the Consent Decree. Since there is no accountability for miscreant judges, the misconduct continues. 

Prosecutors who use perjury did not die in the 1980s or in the 1990s or even in the 2000s. In January 2015, the 9^th Circuit of local federal court complained about a prosecutor who took the witness stand and committed perjury. Even after his lying ways had been uncovered, the judiciary did nothing. Let’s be clear – not only did the prosecutor get an informant to testify, the prosecutor himself then took the stand to support the informant’s veracity. To aggravate matters, other courts had decided that the prosecutors had obtained the conviction in Baca's trial by the use of false evidence, but these other judges upheld the conviction. 

“The 9th Circuit (the federal court) keeps seeing this misconduct over and over again,” commented Gerald Uelmen of the Santa Clara University School of Law. Nor, has the judicial misconduct ceased. Currently, the FBI is investigating the Orange County Sheriff Department’s long-term misuse of jail house informants. On Thursday, December 15, 2016, the U.S. Department of Justice announced the FBI’s investigation of the Orange County Sheriff’s Department use of jail house informants. 

The investigation will focus on allegations that the OCDA and OCSD “systematically used jailhouse informants to elicit incriminating statements from specific inmates,” inmates who had been charged and were already represented by attorneys. The investigation will also examine if county prosecutors violated defendants’ rights to a fair trial by “failing to disclose promises of leniency that would have substantially undermined the credibility of the informants’ trial testimony.” 

Since a high percentage of judges come from the district attorney’s office, they are well aware of these unconstitutional practices. Without the cooperation and supervision of the judges, these decades of serious constitutional abuses would not exist. We have to remember that we are not talking about short cuts to “catch the bad guys,” but rather, are plagued with intentional schemes to convict the innocent. 

California’s Judges Preside over a System with an Epidemic of Misconduct 

The three federal judges in the Baca Case did not limit their criticism to objecting to this one prosecutor’s behavior in that case, but they went on to charge that the California judicial system has “an epidemic of misconduct” and they laid the blame at the feet of the California State court judges who turn a blind eye. 

These three federal judges’ observation on the lack of ethics in the California judiciary brings us full circle to Proposition 66. One thing which Proposition 66 does is return Habeas Corpus hearings to the original trial judge. Habeas Corpus is Latin for You May Have the Body. A person requests a court to free a person from jail, and if the court grants the request, it gives a Habeas Corpus order, which says, “You may have the body.” 

Proposition 66 wants this vital decision to be made by the judge who has the highest likelihood of helping to railroad an innocent person to the death chamber. Before Proposition 66, the Habeas Corpus hearings were held before other judges who had no vested interest in denying this particular request. The last person on earth who should preside over a Habeas Corpus hearing is the judge who just orchestrated the conviction. 

This aspect of Proposition 66 doubles down on the corrupt nature of the California judiciary, and it is not surprising that it contains this provision gutting Habeas Corpus hearings. 

Assuming California has the same percentage of innocent people sitting on death row as other states, then about 30 innocent people are likely to die if Proposition 66 is found constitutional. For judges, who have helped railroad innocent people by looking the other way at prosecutorial misconduct, anything that reduces the chances that their complicity in wrongful convictions can be revealed is a good thing. As the saying goes, “dead men tell no tales.” They see Proposition 66 as a way to prevent their epidemic of misconduct from being exposed. 

What Will Become of Proposition 66's Requirement that We Kill People Faster? 

Rejecting Proposition 66 will not rectify the decades of judicial misconduct in the California judiciary. Rejecting Proposition 66 will, however, temporarily slow down California’s slide into an ethical morass.

(Richard Lee Abrams is a Los Angeles attorney. He can be reached at: [email protected]. Abrams views are his own and do not necessarily reflect the views of CityWatch.) Edited for CityWatch by Linda Abrams.

PLATKIN ON PLANNING-We could surely address growing social and economic inequality in Los Angeles if each call to update the Community Plans was matched with a nice raise for all those who live and work in the City of Angels. 

But, please don’t hold your breath, because there are tremendous barriers to effectively updating the Community Plans. When the job is finally completed, the curses of time, a rudimentary planning process, and City Hall’s pay-to-play political culture will have rendered the final product useless. This hopeful City Hall magical elixir is just a will-o-the-wisp. 

Furthermore, there is every indication that if and when the Community Plans are eventually updated, the Updates will be used to placate developers, not a concerned public rooting for a well-planned city. And, if Measure S, the Neighborhood Integrity Initiative, wins on March 7, the timetable to update the Community Plans will dramatically speed-up. Like the botched and annulled Hollywood Plan, each future Update will be quickly appended with extensive up-zoning and up-planning ordinances to circumvent Measure S’s ban on spot-zoning and spot-planning. 

Private Greed, not Public Need 

As described in a recent Los Angeles Times editorial, City Hall’s slimy pay-to-play land use decision-making process has become “soft corruption.” But, this corruption is much more than a problem of public perception. It also means that land use decisions – especially for mega-projects – are disconnected from the legally mandated planning process. This is because LA’s money-infused pay-to-play culture annually spawns hundreds of parcel level zone-changes, height district changes, and General Plan amendments. Called spot-zoning, the result is that many Los Angeles neighborhoods are already dotted with parcels that exceed legally adopted zoning, height districts, and General Plan designations. 

Furthermore, if and when the City Council eventually adopts updated Community Plans, continued spot-zoning will render every Community Plan irrelevant. Each Plan’s land use maps and implementing zoning ordinances will become a shelf document because deep-pocketed developers will continue to overturn adopted plans and zoning at whim. When their bean counters tell them, for example, they can make considerably more money through a high-rise luxury apartment tower than a low-rise retail store, contributions will flow, followed by zoning applications and eventually by building permits. 

In this world unrestrained market forces, not official plans and zones, remain LA’s de facto planning process. The City’s legally adopted General Plan, including its Community Plans and their implementing zones, will stay on the books, but as minor speed-bumps on the yellow brick road to private enrichment. 

Like today, pay-to-play will continue to squeeze certainty and predictability out of the planning process. 

Technical barriers to effective Community Plan Updates 

In addition to these formidable political barriers to effective Community Plan updates, there are three technical barriers begging for solutions. 

• Community Plans should be updated every five years, not on a 20 or 25 year cycle. The current Update process, called the New Community Plans, began over a decade ago, when Gail Goldberg was the Director of City Planning. Beginning with her administration, the City Planning Department has only updated several Community Plans, and its latest estimate is 7 to 10 years to complete the job. Long before then, however, the entire updating process should start all over again. 

• The Community Plans -- the General Plan’s Land Use Element -- apply the Updated General Plan’s many citywide elements (chapters) to local communities. But, City Planning is updating the Community Plans on a separate timeline. They will complete most of these local plans without the benefit of updated citywide General Plan data and policies. Cities with such a fragmented, cart-before-the-horse approach, therefore, rely on dumb luck that their local Community Plans properly knit together and cohesively guide the entire city. 

• There is no accurate and timely data of the buildout potential of Los Angeles’s existing zoning. City Planning computed such buildout calculations 25 years ago, but since then City Hall has implemented SB 1818, the Density Bonus ordinance. It allows up to two more stories of residential development on all commercial lots. This means that LA’s long, one and two story commercial corridors could now be rebuilt with four or even five story mixed-use or totally residential apartment structures. 

What is already visible on the Miracle Mile could repeat itself on all other commercial thoroughfares, such as Pico or Washington. While this zoning potential certainly varies among Community Plan areas, an effective planning process needs to carefully consider this data, especially in light of forecast demographic trends. Even if City Hall relies on SCAG’s habitually inflated population numbers, there is every indication that LA has far more land zoned for apartments than would be required by all conceivable General Plan growth scenarios. 

My conclusion 

For the Community Plans to be a magic elixir, the City of Los Angeles must overcome two barriers. First, City Hall’s soft-corruption has to go. If it remains, it totally undermines any planning process. Second, the technical planning process needs to be accelerated, properly sequence, and based on reliable data for the city’s zoning build-out potential. 

This is certainly a tall order, but it is necessary.

(Dick Platkin is a former LA City Planner who reports on local planning issues for City Watch. He welcomes comments and corrections at [email protected].) Prepped for CityWatch by Linda Abrams.

THIS IS WHAT I KNOW--City Council incumbent Gilbert Cedillo has set sail on his campaign to retain his District 1 City Council seat. LA’s primary election is March 7. His ship may be off to a rocky start, however. Activist Marc Caswell asks if Cedillo is using his office resources to send campaign emails, which may be in violation of LA Municipal Code section 49.5.5b? 

No City official or employee of an agency shall engage in campaign-related activities such as fundraising, the development of electronic or written materials, or research, for a campaign for any elective office of ballot measure during the hours for which he or she is receiving pay to engage in City business or using City facilities, equipment, supplies or other City resources. 

While we don’t know if Cedillo has been campaigning during office hours, LA’s Marc Caswell believes Cedillo has used city resources to send campaign emails. Caswell, who lives on the border between CD13 and CD1 says he subscribes to the email newsletters for both districts’ council members in order to stay up to date on community news and information. 

“I find it odd that I started receiving campaign emails from only Mr. Cedillo when I know I never signed up for them, “ he explains. “I think it’s wholly inappropriate that an elected official would take his taxpayer-funded newsletters (database) and use that for campaign emails. And this offense is ever more egregious since Mr. Cedillo didn’t even bother to change his City Hall office address for his campaign emails.” 

Caswell says he filed an ethics complaint because “elected officials should not abuse the taxpayer by spending our money on their re-election campaign. Not only is this a clear violation of City Ethics laws but it shows Mr. Cedillo’s clear lack of respect for the voters and residents of Los Angeles.” 

This isn’t the first time Caswell has filed an ethics complaint against Councilmember Cedillo. Back in November, Caswell says he sent a complaint about a violation of another law related to emails that was reviewed by the Ethics Commission. He is still awaiting a response. 

“Normally, I’m not this nit-picky -- but he keeps violating email ethic laws over and over!” says Caswell.
Stay tuned. If Caswell is right, Cedillo’s campaign journey may run into some campaign turbulence before he reaches that doc by the primary election bay.

(Beth Cone Kramer is a Los Angeles writer and a columnist for CityWatch.)

-cw

EASTSIDER-After the recent defeat of Proposition 53, a Howard Jarvis backed initiative aimed squarely at Jerry Brown’s Delta Tunnel project (aka WaterFix), matters are moving forward with the project. 

The CEQA challenges are now finished, and the resulting a 100,000 page document (I kid you not) is on the Governor’s desk. As General Manager of the Metropolitan Water District, Jeffrey Knightlinger quipped at our DWP meeting that the stack of paper is about 40 feet high, roughly the same as the diameter of the Delta tunnels (irony intended). 

For reasons that I do not purport to understand, the (Chicago) LA Times is still opposing the tunnels, clear proof that the owners of the Times do not reside in Southern California. 

The reality, however, is that we in Southern California really need to protect access to the water flowing from the Northern California mountains through the Sacramento River and the Delta, into the California Aqueduct to the Metropolitan Water District. In the likely event of continued drought this water is critical for us and for our children as global warming increases mountain temperatures. 

As a third generation Californian, I am painfully aware of the North/South political split in our State that has existed forever. Folks like my late grandfather up in Orville wanted to literally divide the state into two, and I have some friends in Sonoma County who still believe it would be a cool idea. But just like we have to live with Northern California and its politicians because of their water, they have to live with our need for that water in order to fuel the State’s economy. Not to mention that the entire state needs to do something with the water supply. Northern Californians don’t like floods and busted levees. 

Truth is, Southern California is a desert, and there are only a couple of sources for water to feed the roughly 50% of the State of California’s population that resides within the six counties of Ventura, Los Angeles, Orange, San Diego, Riverside and San Bernardino. Those six counties (actually only portions of Ventura, Riverside and San Diego) constitute the membership of the Metropolitan Water District, or Metro, as it is often called.

For all the political talk about the Delta Tunnel, most Angelenos have no idea where our water actually comes from, or how the DWP fits in with the Metropolitan Water District. What’s even stranger is my friends in Northern California seem willing to ignore the fact that Brown’s WaterFix will help them too. The levee system and the Delta are a mess up there, and Brown’s proposal will help them fix their problems as well as help Southern California. 

About That Water 

If you look at the big picture, the Metropolitan Water District generates over 50% of Southern California’s water. Metro’s sources for this water consist of the California Aqueduct and the Colorado River Aqueduct. The balance comes from local sources and the DWP’s Owens Valley Aqueduct. 

Because of multi-state agreements, Metro’s share of the Colorado River is a percentage of what flows through the river. Based on these agreements, this has usually translated into about 50% of a baseline amount. On the other hand, as drought becomes more persistent in the Western states, those amounts will probably go down over time. 

The good news about the Colorado River water is that Metro has a huge storage capacity, and in fact maintains a permanent six months’ supply in storage just in case of an emergency. So from an availability factor, it is great that we will always have access to the allotment from the Colorado River. 

The situation from the California Aqueduct is another matter. Water entering the system from the mountains and rivers in Northern California is capable of producing a huge amount of water per year, but the amount and flow of that water supply is intermittent. In other words, what’s in the system depends on how much rain and how much snow we get, as well as when those events take place. The system itself doesn’t have a lot of permanent storage built into it. 

The astonishing good news to me, and hats off to the water folks, is that while our population has increased from about 13 million people in 1985 to some 19 million people in 2015, our water demand has been essentially flat. Proof that all of those efficiency measures have worked. 

The Environmental Factor 

One of the biggest factors in how much water we can get from the Delta, and for that matter, the Owens valley, are generically referred to as environmental issues. These types of concerns led to the passage of CEQA (California Environmental Quality Act) back in 1970, designed to make state and local governments identify and mitigate the environmental impacts of their decisions. 

Most people I know have no clue what CEQA means beyond the name, and it’s difficult to get an objective explanation, so if you want to know more, there’s a good starting point here. 

In addition to providing a legitimate curb on government destroying the environment, CEQA has also made a bunch of lawyers rich and created entire new political and governmental bureaucracies -- thus the some ten years and 100,000 pages of CEQA documents on Governor Brown’s Delta tunnel project. 

Like any huge capital project, WaterFix is going to be paid for by ratepayers in their monthly bills. Small price for ensuring a reliable water supply, and in retrospect it’s a darn good thing that we built the Colorado River Aqueduct and the California Aqueduct. So, if it isn’t really about the money, then what is it? 

I think that using the magic word “environment,” we have created an entire environmental business model that has little to do with rational anything. 

At this point, there are a number of non-profit organizations whose livelihoods consist in fundraising and litigation over the environment. There are also a number of class-action attorneys specializing in this area. Further, there are agencies like California’s Department of Fish and Wildlife, the U.S. Fish and Wildlife Service, and a host of others, whose staffing and existence are dependent on staying in the limelight come budget time. 

Two examples. First, I don’t know why the folks up north keep whining about the delta smelt. This isn’t about smelt. Heck, right now I am told there’s a hatchery that produces smelt each year that can’t be released into the water supply because the regulatory agencies won’t let anyone do it. C’mon. 

Second, the DWP and the Owens Valley. The issue of LA stealing their water a century ago is over. These days the issue is a small group of politicians controlling a water district up there that they use to blackmail money out of LA ratepayers. They have evolved from screaming about the water grab to ‘dust mitigation’ and have made a bundle. 

My point is that how much water we get in Southern California is more than just a political issue. There is a huge amount of water from Northern California that simply goes out into the ocean or floods because it can’t be captured or managed. Just ask the folks in Truckee or Sonoma County after this week’s massive rainfall. Wouldn’t it be nice to have a system that can helps manage these huge fluctuations in water? Enter Brown’s plan. 

In terms of planning ahead, you may have seen on TV how they measure the snowpack in the Sierras using the depth of the pack, which gives an indication as to the existence and/or severity of a drought. 

The reason that the snowpack is critical is that the snow is a great way to store water, which can run off later into the system. Now, factor in climate change, or if you don’t like the idea of climate change, just call it drought. When temperatures in the Sierras get much above 30 degrees, we don’t get snow. We get rain, and rain doesn’t get stored. 

The Takeaway 

Let’s put the pieces together. The three big water sources for Angelenos are the Owens Valley (DWP), the Colorado River Aqueduct, and the California Aqueduct (MWD), plus a variable amount of local water through our water basins and recycling. 

Over time, it is clear that the amount of available water from the Colorado River and the Owens Valley will decrease, not increase. Guess what that leaves? That’s right, the California Aqueduct, which produces a large but extremely intermittent flow of water. Thus, the Delta tunnel project. 

The project will help the environment (the 100,000 pages of CEQA documents), and the project will provide more water storage as well. Maybe that could have helped avoid this week’s flooding up north. 

Absent something like the Delta tunnel project, it is not likely that the amount of water available to pump from the California Aqueduct will increase anytime soon. And while MWD contracts for up to two million acre/ft. per year, with regulatory/environmental requirements, the actual amount received is more like 50% of that figure -- which could go down. 

While a $15 to $17 billion plus bill to build the tunnels sounds like a lot of money, consider the B Plan: not having enough water to support us. Remember, without the Owens Valley Aqueduct (politically correct name, the Los Angeles Aqueduct), there wouldn’t be much of a Los Angeles. 

And I would remind folks that big capital projects take a lot of time to complete. Just look at our freeways and CalTrans attempts to fix/build them when bad stuff happens. I think a few bucks a month for ratepayers represents a sound investment. Heck, maybe someday we can even water what used to be our lawns.

(Tony Butka is an Eastside community activist, who has served on a neighborhood council, has a background in government and is a contributor to CityWatch.) Edited for CityWatch by Linda Abrams.