8150 Sunset Project: Welfare for the Rich, Greed on Steroids

PLANNING POLITICS--When I first wrote for CityWatch about the 8150 Sunset project (“Rotten to the Core”), I thought something was really wrong with it. Now, two months later, after much research, I know there is. Back then I had heard that Luci Ibarra of the Planning Department’s Major Projects Division had insulted many who opposed the project, including the representative of West Hollywood and Councilman Ryu’s office. The talk from the neighborhood was that she was committed to the developer and hostile to any criticism.   

On Thursday, July 28, 2016, the 8150 Sunset Project breezed through the CPC hearing aided by the star power of Frank Gehry (photo above) and considerable help from Ms. Ibarra. City staff must be objective in their evaluation of projects. She was not. 

Some have described the Frank Gehry design as putting lipstick on a pig. But it is so much more than that. It is the prototype of things to come and if allowed to stand will dismantle zoning all over the City and destroy our neighborhoods. 

In a stroke of brilliance, Townscape Partners hired Gehry to redesign a project that seemed doomed to fail and turned it into a star, tripling its square footage. This is Hollywood, after all, where celebrity is worshiped and people line up to get a glimpse of the rich and famous. That is what happened on Thursday when the planning commissioners fell all over themselves in praise of a project that will overwhelm the local streets and infrastructure. 

But do they care? Not when they got Frank Gehry himself to show up and talk to them about design and his ideas on architecture. The commissioners swooned while the local community wept. Four Commissioners even admitted that they had visited his studio regarding the project. Still, they claimed to be objective. The fact that four of the six commissioners that were voting made this admission is of concern. 

After Gehry spoke the real show began. Representatives of four groups that had appealed the planning department’s initial approval of much of the project got up one at a time and listed the reasons why the City should deny this miscarriage of justice. Next, the representative of the Neighborhood Council told the Commissioners why the project would not work for the neighborhood. Sarah Dusseault, chief of staff for David Ryu, stood up next and argued that the project was too big and pointed out why it should not be approved as presented as well as the terrible precedent it would create. 

I sat in the back of the room nodding affirmatively at each point. Sarah and Julia Duncan from Ryu’s office really nailed a couple of very salient points, telling the Commissioners that, contrary to what Planning staff had written in their reports, there was ample reason and justification in the law to turn this project down, send it back for more work and to make it smaller. 

Then the crowd of extras delivered by the developers came to the microphone one at a time to sing the praises of Mr. Gehry and the project. Whenever the commissioners had a question they turned to Ms. Ibarra for clarification. If there were three facts and two did not support the developer she chose the third that did. Misinformation was sprinkled in to flavor the meal she was serving up and the commissioners devoured it.   

Members from the four groups opposing the project, along with the Neighborhood Council and the Council office, listened in silence as all of our arguments were turned down. Once again, the commissioners once sang the praises of Frank Gehry and approved the project.  All of us left worn out after a five hour ordeal in an un-air-conditioned room. But we are determined to carry on. 

I have no idea what the City of West Hollywood or the two other appellants will do, but Fix the City stands ready to protect all the neighborhoods across the City and litigate if necessary, fast-tracked or not.  

This project is welfare for the rich, greed on steroids -- one more example of the ruling class sticking it to the rest of us. It is also the advanced guard of projects that will destroy zoning as we know it. Using Senate Bill 1818, (Density Bonus) law, Townscape partners agreed to set aside 28 of their 249 apartments for very low income residents. For that they are asking the Commissioners to grant them a 300% increase in square footage instead of the 35% they are really entitled to get. Instead of asking for a Height District change to increase the FAR, Townscape is using the Density bonus law. Fifty (50) of those 249 units they will build will be condos selling from three to twelve million dollars. There will also be 65,000 sq. feet of commercial space.   

In their own financial statement, they claim they will make a 15.9% profit which translates to $52 million. Like I said, welfare for the rich. They will also close the southbound section of Crescent Heights from Sunset Boulevard without the standard process required by the Streets and Highway Code to vacate it. They claim they will use B permits to cover over the road and take over the current traffic island which has its own address (8118 Sunset) to create an outdoor public space. 

When questioned on how they can do this, Planning’s answer is the City will continue to own it (the island and road to be covered over by cement) and the developer will maintain it.  First the people of California own the streets, not the City but who’s going to stop the City from doing this? This is the big gamble developers are taking all over Los Angeles. They ask themselves, how many projects can we slide through before someone sues us?  Given that there are more of them than groups who can afford to sue, the odds are forever in their favor. 

We the people have few options available to us except to carry on and organize to affect change. I am sensing all over the City a feeling similar to the one that led to the secession movement. What is different this time is that it is not just the Valley and some in Hollywood that feel disaffected -- it is most of Los Angeles.  

(Jim O’Sullivan is one of the Fix the City founders and President of the Miracle Mile Residential Association.)  Edited for CityWatch by Linda Abrams.

California Superintendent Tom Torlakson: Governor for a Day (or So)

EDUCATION POLICY ALERT-Well, here's our chance! Imagine my surprise when I heard on NPR this morning that State Superintendent of schools Tom Torlakson -- my very favorite State official -- is Acting Governor of California for the rest of the week. 

This is what happens when your whole state government comprises the biggest delegation at the Democratic National Convention. 

While every other force in Golden State politics is looking for unity in the City of Brotherly Love, my mind leaps to the education priorities we could advance! 

It wouldn't be the first time an Acting Governor did a whole lot of governing when Jerry Brown was out of state. 

So I’ve penned a letter to the Superintendent to offer my assistance: 

Dear Acting Governor Torlakson, 

First off, congrats! 

I am writing you to offer to rush to the State Capital and work feverishly alongside you to advance our public education priorities while the rest of California’s political wish lists languish in the Philadelphia International Airport baggage claim. (It’s not their fault they exceeded the 3.7 ounce limit.)

I admit, I’ve been feeling envy what with all the selfies my friends have been posting. Betsy pictured with Dolores Huerta. Randi pictured with Bill Clinton. Carolyn and Dallas were even interviewed about their experiences as mother and daughter in Hillary’s and Bernie’s respective delegations.

But, oh, the things we can get done for our schools while they're distracting our elected officials! 

By the way, Tom, I hope you don't let the “Acting” qualifier get in the way of the work we can do together. The philanthropists and politicians certainly haven't let their lack of credentials get in the way of dictating what our teachers and principals do. So let's give it a go! 

Just say the word and I’ll be on the next Southwest flight to Sacramento. I’ll use carry-on, so my only baggage will be emotional -- a decade of mourning for the once top-funded California public school system and my more recent PTSD from the assault on public schools by the charter lobby. 

But there’s no time for a pity party. Here’s my short list of what we mice should do while the cats are away.

 

 

What’s that? Charter = accountability? That’s so funny you say that because...they’re lying.

Charter schools claim to receive autonomy in exchange for more accountability. But this is just a slogan because--have you opened a newspaper lately?! 

There’s the report of Principal David Fehte of El Camino Real Charter High School in the Southern part of the state who’s been flying first class and buying expensive wine and charcuterie plates at fancy hotels (does he wine and dine alone?) while he moonlights as a scout for the NBA. (Now that Arne Duncan has resigned as US Secretary of Education, I’m pretty sure basketball connections no longer exempt alleged cheaters from scrutiny.) 

Then there’s the LA Times report of a charter school paying $566,803 to a teacher who sued because the director, Kendra Okonkwo, forced her to travel with her to Nigeria to marry Okonkwo's brother-in-law to gain US citizenship. 

And Gulen.

I know, Caprice Young is cozy with the politicos -- but they’re all in Philly this week! (Note: send Philadelphia Inquirer reporter list of California Democrats who have ignored the Gulen scandal said reporter has been covering for years. Pitch idea of confronting them on the Convention floor.) 

And I get it -- geopolitical conflict is complicated. But the moms at the PTA meeting said there isn’t room on Tuesday’s agenda between the bakesale and ordering “I’m a proud public school parent” t-shirts to debate which side of an attempted foreign coup our middle school should be on. They just want the money for our schools that the cult leader in the Poconos is allegedly sucking out of the US education ATM through the vast network of charter schools he has “inspired.”

Here are a few articles in preparation for our discussion: the Washington Post, the New York Times,  60 Minutes, The Atlantic Monthly, just for starters. 

I can't make any promises, but I’m pretty sure the expert, researcher Sharon Higgins, would rush right over to Sacramento from Oakland to brief us on this. Shall I tell her 10:00 a.m. on Wednesday? (Note: Locate entrance closest to freight elevator for her BOXES of documents.) 

Tom, do the blinds in the Capital totally block the sun? I ask because we could co-host a screening of Killing Ed, the Mark Hall documentary that tells this story. The Nigerian forced marriage has not yet hit the big screen, but we can discuss with Hollywood producers if you wish. Geronimo could write the “based-on-a-true-story-I-swear-I’m-not-joking” screenplay. (Note: clear 4 front parking spaces for stretch limo and ego of Hollywood producer.)

 

 

Voters were hoodwinked and they know it. Here's a 4-minute video to brief you on how the parasitic law creates conflict, featuring “me.”    

 

 

 

Just throw away the whole project. Period. (Note: Do not exceed 5 minute discussion on this item.)

 

 

 

Some politicians might think kids need more reading and writing drill-and-kill just because I said "ain't" but I know you can take a joke. KPCC’s Mary Plummer covered this law when she was the knock-out arts education reporter for the NPR affiliate. Guess what? Now, she’s the knock-out  "political” reporter, so she can go exactly where the story takes us. I would imagine she could cover a political angle for a lot of the reports she covered in education.

 

 

 

My own LAUSD middle school’s library has been shuttered for five years since LAUSD cut all the school librarians in an effort to offload pension costs of elderly teachers. It was shameful. And, no, telling principals they can cut something else in order to fund a librarian is not funding libraries. 

Google could provide wifi, HP could provide the printers, VOX could create a digital version of The Weekly Reader (I know--I'm showing my age), etc. etc. In exchange, hang a plaque in each library saying they did something for humanity by helping to make this generation literate.

 

 

 

Sure, AB1369 was progress, but “suggestions” rather than requirements don’t go far enough. One in five students have dyslexia, and most cases go undetected for years. Can you imagine sitting in school and not being able to access written curriculum for years? We currently don’t test until two years after a teacher notices that a student is suffering. There is lots of evidence that this would put a major dent in the high school dropout rate, too. Now that’s a Data Wall I’d like to see in every school! I could pretty much promise that the dedicated folks from Decoding Dyslexia would rush over to help us with the details. They’ve been working on it for years.

12:00 lunch meeting on Wednesday? (Note: Search yelp for good lunch deliveries near the Capital.)

 

 

 

Charter schools should not be offloading their pension costs onto the public school districts. That's like charging the US Postal Service for the pensions of FedEx drivers. 
(Note: Are the union leaders away this week, too?)

 

 

 

I hear Eli likes to send his money to Arizona.  Getting Eli out of education policy is our best chance of returning education funding to levels that are not a national embarrassment, and eliminating all number of his “disruptions.” 

That about covers it for now. If Jerry has a long layover, I'll make further plans. I await your call! 

(Karen Wolfe is a public school parent, the Executive Director of PS Connect  and an occasional contributor to CityWatch.) Prepped for CityWatch by Linda Abrams.

Eye Opener: Massive Shakeup Hits Skid Row Housing Trust … Too Little Too Late?

SKID ROW … ‘FIRST PERSON’ REPORT- In what can only be described as a “massive shake-up”, Skid Row Housing Trust has just taken major steps that change the core if it’s existence. 

SRHT last week fired ALL of their nighttime desk clerks and replaced them with armed security guards. This week, they notified ALL of their tenants that they are now working with the Los Angeles Police Department to rid their buildings of drug dealers. 

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Expo Line Expansion Fails to Make Up for LA Transit Loss

NEW GEOGRAPHY--The long awaited and highly touted Santa Monica extension brought an approximately 50 percent increase in ridership of the Los Angeles Expo light rail line between June 2016 and June 2015. The extension opened in mid May 2016. In its first full month of operation, June 2016, the line carried approximately 45,900 weekday boardings (Note), up from 30,600 in June 2015, according to Los Angeles Metropolitan Transportation Authority (MTA) ridership statistics.

However MTA ridership continued to decline, with a 51,900 loss overall. Bus and rail services other than the Expo line experienced a reduction of 67,300 boardings (Figure).

Between June 2015 and June 2016, rail boardings rose 30,500, while bus boardings declined 82,400. In other words there was a loss of 2.7 bus riders for every new rail rider over the past year. Los Angeles transit riders have considerably lower median earnings than in the cities with higher ridership, and lower than the major metropolitan average (see the analysis by former Southern California Rapid Transit District Chief Financial Officer Tom Rubin and "Just How Much has Los Angeles Transit Ridership Fallen?"

Note: A passenger is counted as a boarding each time a transit vehicle is entered. Thus, if more than one transit vehicle is required to make a trip, there can be multiple boardings between the trip origin and destination.

Because the addition of rail services, as in Los Angeles, can result in forcing bus riders to transfer because their services can be truncated at rail stations, the use of boardings as an indicator of ridership can result in exaggeration, as the number of boardings per passenger trip is increased.

This may have produced a decline of as much as 30 percent in actual passenger trips since 1985, as a number of rail lines have been opened in Los Angeles. 

(Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. Mayor Tom Bradley appointed him to three terms on the Los Angeles County Transportation Commission (1977-1985) and Speaker of the House Newt Gingrich appointed him to the Amtrak Reform Council. This piece was posted originally at New Geography.) 

-cw

City Hall’s Great Conundrum: Getting Developers to Build Affordable Housing … Like Getting Blood from a Stone

PLATKIN ON PLANNING-We have all heard the expression “getting blood from a stone.” That is the conundrum facing City Hall’s efforts to solve LA’s housing crisis through private investment. It isn’t really working, and the City’s half-hearted efforts have been further complicated by two upcoming ballot initiatives. The Building Better LA initiative, on the November 2016 ballot, would require affordable housing built through municipal programs to utilize unionized labor. 

Then, in March 2017, LA voters will weigh in on a second, more comprehensive initiative, the Neighborhood Integrity Initiative. If approved, this ordinance would impose a two year ban on City Council legislative actions that spot-zoned and/or spot-planned high-rise luxury housing projects. During this hiatus, the City would be required to begin the update of LA’s legally required but outdated General Plan, eventually including the city’s 35 Community Plans. 

While these updates would identify locations that had the greatest need and potential for affordable housing construction, the Initiative also permits the construction of 100 percent affordable housing projects through City Council zone changes and/or General Plan Amendments. 

In response to these two initiatives and an undeniable crisis in LA’s supply of affordable housing, the City Council directed the Department of City Planning to investigate a value capture approach to increase the production of affordable housing. If adopted, the City would attach a condition to all residential discretionary actions: each project must include a specific amount of affordable housing. 

The City Council made their bed, and now they must sleep in it. 

On one hand, the Council and their planners are fully committed to neo-liberal economics, which means slashing as many public housing programs and governmental regulations on private investment as possible, replacing them with harsh policing paired with government incentives for developers. As intended, this approach has fanned the flames of real estate speculation. And, driven by the economic imperative to maximize profit, this feeding frenzy has resulted in a glut of financially lucrative luxury housing, but virtually no affordable housing. 

In the face of these unwelcome trends, the luxury housing crowd has spun two whoppers about LA’s housing crisis that I have previously debunked: 1) Luxury housing produces affordable housing by pulling down the rents of middle and low income housing. 2) Luxury housing transmutes into affordable housing, a type or reverse alchemy called filtering. When pressed, however, the tellers of these tall tales cannot cite any addresses or neighborhoods in LA where these supposed miracles have actually taken place. 

On the other hand, as hinted at in the value capture report, LA’s amalgam of existing housing programs barely produces any net gain in affordable housing. This is because many market housing projects have extensively eliminated existing affordable housing through relentless demolitions and evictions. The value capture report, however, did not mention a third factor that has shrunk the supply of affordable housing. As reported by John Schwada in CityWatch  the City of LA does such a poor job at inventorying and monitoring affordable housing that many landlords surreptitiously rent out these units at market prices, sometimes even as short-term rentals.  

This is why the City Council has uncomfortably moved down the path of increased regulation of discretionary residential land use actions through a value capture ordinance. It is their silent admission that their old programs and old justifications (the whoppers) have run out of gas. Even though the value capture option conflicts with their devotion to classical neo-liberal hocus-pocus, they don’t have a better option until such time that the Federal government restores many slashed public housing programs of yore. 

The Value Capture report describes existing affordable housing programs in LA, such as the poorly performing Density Bonus/SB 1818 option. It also inventories more dynamic programs from other cities, such as NYC. In the Big Apple, Mayor de Blasio has successfully championed inclusionary zoning (i.e., mandatory affordable housing requirements.) 

The report also outlines potential value capture approaches that LA should consider, largely imposing an affordable housing requirement on residential projects built through discretionary actions. Depending on the City Council’s eventual ordinance, LA’s likely value capture ordinance will include on-site affordable housing requirements for most discretionary actions, including the General Plan Amendments, Zone Changes, and Height District Changes targeted by the Neighborhood Integrity Initiative. Two other provisions, allowing developers to meet their affordable housing requirement through off-site construction or in lieu payments could also be folded into the final ordinance. 

But, regardless of what the final value capture ordinance will look like, I wish the City Council the best of luck, because their ordinance will have little impact on LA’s affordable housing crisis. This is primarily because the Council and its value capture ordinance cannot avoid the essence of their conundrum: the need of developers to maximize profits from their real estate investments. The greater the City’s affordable housing requirement, the lower the resulting private investment and number of affordable units. The smaller the City’s affordable housing requirement, the greater the resulting private investment in luxury housing. There really is no escape from this affordable housing dilemma. 

As far as I can tell, wide-scale up-zoning and up-planning is not proposed in the value capture ordinance, although this will certainly happen through Community Plan Updates and re:codeLA ordinances. But, if the City Council did eventually attach a mandatory affordable housing requirement to every Community Plan Update or re:codeLA ordinance containing up-zoning and up-planning, it would be a New York City-style sea change for Los Angeles. But, given the grip that real estate interests have on LA City’s elected officials and policy wonks, this outcome is now a flight of fancy. 

Furthermore, if the eventual value capture ordinance adopted an SB 1818 approach of automatically approving economic incentives for all zone changes and General Plan amendments that include an affordable housing component, it would be an extraordinary windfall for property owners. After their entitlements, with only token City surveillance, some of these new “affordable” units could be quietly rented out at market rates or the real money-maker: Air BnB’s. 

When this happens, the City Council’s self-imposed conundrum may finally reach its breaking point. They would have to admit that no private market approach, even value capture, can successfully address LA’s – or for that matter the entire country’s – housing crisis. The public sector could then either resume the construction and management of affordable housing or face levels of overcrowding, homelessness, and civil disturbances unseen in the United States for many decades and again beyond the capacity of the LAPD to contain

(Dick Platkin is a former LA city planner who reports on local planning issues for CityWatch. He also serves on the boards of the Beverly Wilshire Homes Association and the East Hollywood NC Planning Committee. Please send any comments or corrections to [email protected].) Prepped for CityWatch by Linda Abrams.

CA Should Pass New Regulations BEFORE Marijuana is Legalized in November

POT POLITICS-California may soon join the growing number of states that allow recreational marijuana by passing the Control, Regulate, and Tax Adult Use of Marijuana Initiative (Proposition 64) on the November ballot. The measure would legalize marijuana and hemp under state law. Portions of the measure could take effect as soon as the day after Election Day. 

The potential for recreational legalization should cause local officials to rethink the way they currently approach marijuana laws and whether that approach should change before Election Day.

It aims to establish state agencies to oversee the licensing and regulation of a marijuana industry, enacting a sales tax of 15 percent and a cultivation tax of $9.25 per ounce for flowers and $2.75 per ounce for leaves, with exceptions for medical marijuana sales and cultivation. Proposition 64 is considered likely to pass, with recent polls indicating that roughly 60 percent of Californians support recreational legalization, and with a reported excess of 600,000 signatures on the initiative and financial backing of more than $2.25 million to date. 

Around the country, the trend toward legalizing recreational use of marijuana is growing more popular. Recreational marijuana use is legal in Alaska, Colorado, Oregon, Washington and the District of Columbia. Eleven other states, including Nevada, Minnesota, New York, Maryland and Massachusetts, may be legalizing recreational marijuana in the near future. Beyond that, 24 states already allow medical marijuana to treat a variety of physical and psychological ailments. 

Proposition 64 is endorsed by the Marijuana Policy Project of California and the National Organization for the Reform of Marijuana laws. If passed, it would legalize marijuana for those 21 years of age and over and would establish the Bureau of Marijuana Control within the Department of Consumer Affairs to regulate and license the marijuana industry. 

Proposition 64 would allow local governments to “enforce state laws and regulations for nonmedical marijuana businesses and enact additional local requirements for nonmedical marijuana businesses, but not require that they do so for nonmedical marijuana businesses to be issued a state license and be legal under state law.” It would also allow local governments to ban recreational marijuana businesses entirely. With respect to cultivation, Proposition 64 would allow local governments to “reasonably regulate” cultivation through zoning and other local laws, but only to ban outdoor cultivation outright. 

Proposition 64 would require local governments to allow indoor cultivation in private residences, and further indicates that any local ban on outdoor cultivation would be automatically repealed if the California Attorney General determines the federal government has legalized marijuana. The wording of the initiative likely makes its application both retroactive and prospective, meaning it would preempt existing regulations if they are inconsistent and prohibit new regulations that violate its provisions. 

Beyond that, some of Proposition 64’s provisions would likely take effect almost immediately. While the provisions surrounding recreational retailers and other businesses would not become functionally effective until the State began issuing licenses on January 1, 2018, recreational use and cultivation in private residences could begin as soon as the day after the election. 

As a result, it is imperative for concerned public agencies to consider, and to enact, regulations surrounding recreational use of marijuana prior to Election Day. 

This may seem counterintuitive — after all, it involves regulating around a law that has not even been enacted yet — but public agencies that fail to pass ordinances surrounding these issues could face preemption and grandfathering problems in the days, weeks and months after Proposition 64 passes. Artfully drafted ordinances can avoid some of this awkwardness by including provisions only triggered by the legalization of recreational marijuana. 

For example, a public agency could pass an ordinance banning all cultivation outright, and include a subsection clarifying that, in the event indoor cultivation in private residences is legalized, a regulatory scheme of the city’s choosing kicks in immediately. This would allow public agencies to regulate how they wish under current law, while protecting themselves in the event Proposition 64 passes. 

But the window is short. Most public agencies would have to take a proposed ordinance to a planning commission and have two readings of the ordinance before their city council, and all of this would arguably need to occur prior to October 8 to allow the 30-day period to lapse so the ordinance is effective prior to Election Day. 

Even if Proposition 64 becomes law, local governments still have wide latitude to regulate marijuana within their jurisdictions, but public agencies should act soon to ensure the most protection against grandfathered uses or preempted local schemes. A brand new regulatory scheme is growing in California, and local governments need to act swiftly to cultivate the proper regulations to ensure their communities flourish in the brave new world of recreational marijuana legalization.

 

(Originally published in PublicCEO. Jordan E. A. Ferguson provides legal services to cities, special districts and private clients across Southern California. As an associate in the Municipal Law and Special Districts practice groups of Best Best & Krieger LLP, his practice involves city attorney and general counsel services. He can be reached at [email protected].) Prepped for CityWatch by Linda Abrams.

 

MacArthur Park Drug Dealers and What Big Pharma Knew

EASTSIDER-Recently, the LA Times did an excellent investigative series about OxyContin use in LA, choreographed by the drug’s manufacturer, Purdue Pharma. 

The stories of people hooked on this stuff, and the collateral damage done to their loved ones is well presented by the Times, so I won’t even go there. Suffice it to say that their headline, “You Want a Description of Hell?” seems spot on. 

More pertinent to this article is the second part of the story, Here, with devastating detail, the Times proved beyond a reasonable doubt what the drug maker knew as it supplied hundreds of thousands of OxyContin pills to a sleazy front in MacArthur Park. 

So what do we have here other than a corrupt company pushing pills to the unsuspecting, without having to pay a price? Even if you are lucky enough not to have a loved one or relative with a drug problem, let’s consider the costs -- the costs to us, the taxpayers of Los Angeles -- as contrasted to the profits of big pharma and the even larger profits reaped by the big banks who launder the drug money. 

Our Costs--In most cities, public safety represents between 60 and 70 percent of the general fund budget and Los Angeles is no exception to the rule. That’s a lot of taxpayer money. And the more money spent on finding and apprehending drug related offenders, the less money is available for the community’s other safety concerns. We all know there exists a lot of unfunded need for public safety services. 

The LA City budget barely touches the surface of those costs such as paying for the criminal justice system required to handle all judicial matters as well as the costs of incarceration, rehabilitation, medical treatment and so forth. 

An enormous amount of money for that must come out of taxpayers’ pockets. And that doesn’t even begin to touch the human pain and suffering so eloquently described by the LA Times

We tend to shy away from a cost/benefit analysis of drug addiction and its associated expenses. But drugs and public safety are closely intertwined issues in our City, and the combination is hideously expensive, both in terms of the devastation to people and the budget-breaking costs to law enforcement -- and us. 

When dope dealers get busted, they go to jail. If addicts get caught, they also often go to jail for the crimes they committed to pay for the drugs and/or they clog up our health care system as their bodies deteriorate and they start to die dirty.

Purdue Pharma’s response to the Times article was to defend their product, OxyContin. 

They did not respond to the fact that they knew about the Lake Medical Clinic and the incredible amount of “product” that they were selling -- yet did nothing other than cover up. And back to costs, it took an entire team of federal, state and local law enforcement to build and prosecute the case. 

Their Profits--Clearly, we lose, big time. So who wins? How about the drug companies like Purdue Pharma and big financial services institutions like HSBC? In the case of Purdue Pharma, the money trail is pretty clear. They have made about $31 billion dollars selling OxyContin. 

It is also clear that Purdue Pharma decided to expand their market by targeting those with “chronic non-cancer pain,” which includes a broad swath of society. In such expanding markets, the economic winners are not only big pharma but the professional class of marketing executives, database developers, marketing collateral designers, sales forces, and middle managers. Not to mention attorneys.

It would seem, in fact, that if you are a white-collar crook, be it with a corporation like Purdue Pharma or a huge financial services institution like HSBC (an international banking corporation with its headquarters in London,) you can get away with serious crime and not pay a dime. 

I mention HSBC specifically, because there is clear evidence that they engaged in massive money laundering, both for foreign states such as Iran and Sudan, as well as good old fashion laundering of drug money for the drug cartels. For proof, as well as a link to the 288 page staff report, see “Too Big to Jail: Internal Treasury Documents Reveal Why Justice Department Did Not Prosecute HSBC.  

There is no doubt that Attorney General Eric Holder intervened in the proposed Indictment of HSBC over these very issues. Result? No indictment. And this was not a one-off, by the way. In her confirmation hearings, our current Attorney General, Loretta Lynch, suggested that there was not enough evidence to prosecute HSBC, even though she oversaw the case and was aware of the staff recommendations. 

The Takeaway--Something is clearly wrong with our system of justice. And you and I are clearly paying for it in more ways than one. If the feds would start doing their job for a change, by prosecuting huge crooked drug companies and financial services institutions, then maybe the word would trickle down. I don’t know how direct a correlation there is, but it seems to me that vigorous prosecution of so-called “white-collar” crime would mean less profit for the corporate crooks and less crime for you and me in Los Angeles. 

Hey, one can hope.

 

(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. 

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