Ethics Commission staff were told to soften their advice on gifts, whistleblower says

Three years ago, the head of the Los Angeles City Ethics Commission gathered a group of staffers for a meeting to discuss city and state gift laws, which determine how much free food, entertainment and other gratuities a politician can legally accept.

Heather Holt, the agency’s executive director, had potentially disturbing news — a member of the City Council had “threatened to cut the Ethics Commission’s budget if they did not give more permissive advice” on certain gift rules, according to a March 2018 email written by a commission staffer who has identified herself as a whistleblower.

“Heather then asked if ‘anyone was willing to lose their job over this,’” wrote Alexandria Latragna, then the agency’s ethics program manager. The Times reviewed a copy of Latragna’s email, which was partially redacted.

Latragna said in her email that Holt told commission staffers that to maintain a good relationship with the council, they would need to be more “middle of the road” with the advice they gave on gift rules involving private events sponsored by lobbyists.

The email exposes a vulnerability of the Ethics Commission: the agency serves as a watchdog over the mayor and council members, who in turn decide how much money it receives for its operations. The document also raises the possibility that the agency bowed to political pressure from an elected official.

Holt did not respond to multiple requests for comment. But David Tristan, who recently replaced her as the Ethics Commission’s executive director, issued a denial on her behalf.

“Ms. Holt states that she has never been threatened by any elected official,” Tristan said in an email. “The Ethics Commission always provides sound advice based on the specific facts and the state and city laws that apply.”

Standing by her complaint

Holt recently stepped down from the Ethics Commission’s top post, as required under the City Charter, which imposes a 10-year term limit on the position. Tristan, a veteran staffer at the agency, was chosen in December to replace Holt and later hired her to be his No. 2, effectively swapping places.

Tristan did not answer several other questions posed by The Times about Latragna’s email.

Latragna confirmed that she wrote the 2018 email, saying she sent it as a whistleblower complaint to Sergio Perez, then the Ethics Commission’s director of enforcement. She declined to identify the target of her complaint or comment on the three-year-old staff meeting.

“I stand by the complaint,” she told The Times.

Latragna left her job in October 2018, and the fate of her complaint is unknown. Jessica Levinson, who was the commission’s president at the time Latragna wrote her email, said she was never informed of those claims. It also is not clear whether commission staffers ultimately changed their policy advice on gifts in the months that followed the March 2018 meeting.

One ethics expert said Latragna’s allegations go to the heart of the Ethics Commission’s duties — enforcing laws on gifts, campaign donations, and other rules governing the city’s public officials.

“It fundamentally would undermine the mission of the Ethics Commission if threats to its budget could cause it to change policy and enforcement in favor of council members,” said Kathay Feng, former executive director of the nonprofit watchdog California Common Cause.

Feng said the issues raised in the 2018 email warrant an investigation by an outside law enforcement agency, such as the district attorney’s office, which would have the power to subpoena records, interview witnesses and determine whether there was such a threat and if so, whether it constituted a crime. Such a probe would remove the conflict of interest that would arise from having the council or Ethics Commission assign someone to investigate, said Feng, who currently handles redistricting issues for Common Cause’s national office.

Perez, the commission’s former director of enforcement, declined to comment on Latragna’s email, saying city law prohibits him from discussing whistleblower complaints. In a statement, he said those confidentiality restrictions “can serve benign aims.”

“However,” he said, “they can also protect the powerful and well-connected from the full weight of the law by making the Ethics Commission less transparent and, as a result, more vulnerable to undue influence.”

A critical time

Perez left his position a few months after Latragna sent her email.

The questions raised by Latragna’s email come at a critical time for City Hall and the operations of the Ethics Commission, which enforces city laws governing campaign fundraising, political spending, lobbying and conflicts of interest.

Federal prosecutors have been waging an expansive corruption investigation into city government, which so far has resulted in the convictions of a former council member, a former council aide and a former city planning commissioner. The Ethics Commission was not involved in the investigation, which focused heavily on allegations of bribery and racketeering, according to Thom Mrozek, a spokesman for the U.S. Attorney in Los Angeles.

The meeting described by Latragna in her email focused on a more obscure enforcement issue: when a public official’s attendance at a dinner or other private event should be considered a gift.

According to Latragna’s email, Tristan told staffers he wanted to discuss how the agency interprets gift laws that apply to events sponsored by lobbyists — as well as a concept in state gift law known as the “drop-in exception.” Under that exception, politicians and other high-level officials who attend a private event but stay only a brief period of time, consuming “minimal” appetizers and drinks, do not have to report their attendance at that event as a gift.

By contrast, elected officials who go to a banquet and stay for the entire program, consuming a meal and not simply a couple of shrimp appetizers, would likely have to report the cost of that banquet ticket on their disclosure forms to comply with state gift law.

L.A., for its part, has gift rules that are more restrictive. For example, elected officials cannot accept a gift worth more than $100 from a “restricted source” — an entity doing business with the city. Gifts from lobbyists are prohibited altogether.

Tristan said early on in the March 2018 meeting that he had spoken with Jim Sutton, an attorney for lobbying firms and business groups, to discuss fundraising for his clients, according to Latragna’s email.

After a lengthy discussion about events sponsored by lobbyists, Holt told the group that an unnamed member of the council’s Budget and Finance Committee had threatened to cut the agency’s budget unless it gave more permissive advice, Latragna’s email said.

‘A direct link to our budget’

Latragna said in her email that she responded by telling Holt that such a threat constituted a violation of a city law that prohibits public officials from misusing their positions for private financial gain. “Heather affirmed that it did,” Latragna wrote. “But that by the time we enforce on it, our budget will have already been cut.”

“After a moment of silence, I confirmed again that the councilmember made that direct link to our budget and the advice that my team gives. And Heather confirmed that he had,” Latragna wrote.

In her email, Latragna said her team had been instructed to provide policy advice in a way that was not being applied by the Fair Political Practices Commission. Holt also advised the staff to call the FPPC to get more direction, she said.

Levinson, who spent five years on the commission, told The Times said she was surprised by Latragna’s allegations. Commission staff were well aware the mayor and council controlled the agency’s budget, she said. “But Heather never said to me, ‘This person is going to cut our funding,’” she said.

Months after Latragna sent her email, the City Council gave a small boost to the Ethics Commission’s budget, increasing it by 5.6%. At the time, the council’s budget committee was made up of Paul Krekorian, Paul Koretz, Mike Bonin, Bob Blumenfield and former Councilman Mitchell Englander, who was recently sentenced to 14 months in prison in the federal City Hall corruption investigation.

Krekorian, Koretz, Bonin and Blumenfield denied issuing any threats after being contacted by The Times. Neither Englander nor his lawyer responded to phone calls and emails seeking comment.

Sutton, the lawyer mentioned in Latragna’s email, said he spoke with Tristan in late 2017 to make sure his clients could invite city staffers to their Christmas parties and other yearly events while also complying with city and state gift law, including the drop-in exception.

“Even though I am aware that council people are often not happy with the Ethics Commission,” he said, “I have never heard of a council person threatening them.”