Valley May Be Key to Determining L.A.’s Next Mayor Guest Column By Gregory N. Lippe Approximately two years ago Mayor James Hahn launched a massive and costly campaign of fear and alleged deceit and fraud in his successful attempt to crush the secession movements in the San Fernando Valley. The fear tactics included suggestions that the Valley would lack adequate police, fire and other safety personnel in the event of a serious disaster, such as that of 9/11, and that utility costs could increase dramatically. Few Valley television viewers will forget the “Roulette Wheel” ad used to drive fear into the minds of Valley voters. The alleged deceit includes the holding back of information that a significant price increase was already being considered by the DWP. The alleged fraud includes the recent “Pay-to-Play” accusations that have driven stakes through the hearts of a number of the mayor’s relationships. Additionally, there were allegations of inappropriate secession campaign contribution requests. The first of such requests to be reported by the media was a $25,000 campaign contribution made by the now reorganized Entertainment Industry Development Corporation, a quasi-governmental agency originally formed and operated for the purpose of streamlining the film permit process in an attempt to stem the tide of runaway film production. The investigation into this contribution opened a Pandora’s Box, revealing a number of expenditures by the agency considered to be improper. Although the mayor obtained his desired result of avoiding secession, it may belong in the “be careful what you wish for” category. Sometimes those things we fight the hardest to avoid turn out to be the things that are best for us. Valley candidates There are analysts that believe that the outcome of the next mayoral election will be decided by the Valley votes. If this is true, it appears that the mayor is in serious trouble. The methods used in his anti-secession campaign not only crushed the secession movement, but alienated many of the Valley’s residents, business owners and most influential people. Additionally, the mayor has not as yet been able to change the perception that he is unfriendly toward the Valley. Meanwhile, two very credible seasoned politicians, who are residents and friends of the Valley, have declared their candidacy for mayor. The first to declare is Senator Richard Alarcon, a very charismatic legislator with a long history of support among labor. The second to declare is former Speaker of the Assembly, Bob Hertzberg, who has a nickname “Huggy Bear” due to his well-loved habit of placing a bear hug on everyone he sees, and his somewhat Teddy Bear looks and personality. Hertzberg is widely popular among Valley residents and business owners and, through his position in the Assembly, has demonstrated a tremendous ability to work together with all members of the Assembly (Democrat and Republican) to create and pass legislation that benefits both labor and business. Differing reputations While Hertzberg has earned the nickname “Huggy Bear”, reflecting his popularity, Mayor Hahn has been referred to as “Jimmy Yawn” and an “empty suit” for a perceived bland personality and ineffectiveness in achieving the goals of stimulating economic growth and creating a friendly business climate in Los Angeles. Although it is rare for an incumbent with a large war chest to lose an election, popularity is a very important factor. Additionally, Hahn, who received a tremendous legacy of goodwill and admiration created by his father, Kenny Hahn, has not been able to sustain it. Instead he and his administration are being subjected to continuing attacks alleging questionable practices and poor judgment. His most recent attempt to help balance the city’s budget by planning to raid $5 million from a trust fund, established for the purpose of business tax reform, was declared illegal by City Attorney Rocky Delgadillo. In the end, Mayor Hahn’s desperation to keep the Valley from seceding resulted in retaining a large block of voters that could cause him to lose the next election. Perhaps, if the mayor had allowed the Valley to secede, he would have a much better chance of retaining future control of the city. Unfortunately, secession would have taken significant funding away from the remaining city since the Valley’s contribution to revenues significantly exceeds the value of services it receives. The loss of significant revenues coupled with a deflated ego from losing a significant portion of his constituency could have been Hahn’s worst nightmare. Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lever, Lippe, Hellie & Russell LLP (LLHR) and a director of the Valley Industry and Commerce Association (VICA)
