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Bell: The Latest 'Suburb of Extraction'

Jul 27, 2010

More than a decade ago, when I was writing my book The Reluctant Metropolis, I became so fascinated by the political changes in the so-called Hub Cities of southeast Los Angeles County that I wrote a chapter about them. Over time I came to love these towns Huntington Park, Bell Gardens, Bell, Cudahy, Maywood because they had a proud working-class history and an all-American optimism that had been renewed when their population  shifted from mostly white to mostly Latino. There was both a modesty and a pride in these towns that seemed to me to represent all that was wonderful about the American spirit.

When it came time to write the chapter, however, I chose to call it "Suburbs of Extraction." This was a play on longstanding political science theory, which makes a distinction between "suburbs of consumption" (where people live) and "suburbs of production" (where factories are located). As the Hub Cities had gone downhill after the Watts riots of 1965, it seemed to me, the primary economic activity in these communities was not consuming things or producing things, but extracting what little wealth remained, as a mining company might extract coal or copper. Apartment builders, casinos, scrap-metal recycling companies all were in the extraction business. So too, I suspected, were some of the politicians, especially those with close relationships with these other businesses. The main lesson of the chapter was that even though the ethnicity of the politicians had changed during a volatile political upheaval in the 1990s, their basic method of doing business had not.  As one resident of Huntington Park told me with a sigh, "We thought when we elected Latinos they would help us."

I hoped I was wrong, of course. Or at least I hoped that extraction legal or illegal was maybe just a phase, and that eventually the Hub Cities would grow out of it. In time, some did. In some cities, such as South Gate,  corruption was rooted out, new faces were swept into office, and life was much improved. However, as we've seen in the current scandal in Bell with its $800,000 city manager, its $450,000 police chief, its $100,000 councilmembers, and its more or less hostile takeover of neighboring Maywood it's still possible to do well in the political extraction business in southeast L.A. County.

Much of the blame, of course, lies with the individuals involved, who have taken a highhanded approach with taxpayer funds and, at least so far, seem pretty unrepentant about it. But much of the blame also lies with California's Byzantine system of local government, which gives officials in a small, poor city elected and appointed what detectives might call opportunity and motive to misbehave.

The motive lies in California's squeaky-clean, progressive-era approach to local elected service, which assumes that you can, as it were, de-politicize politics. Elected officials are supposed to act like a board of directors, not like political hacks. Governmental managers are supposed to be highly trained professionals, not political cronies. Managers should be well-paid for their efficient, productive work; and electeds should be viewed essentially as volunteers, as if they were serving on a nonprofit board.

Viewed as a reaction against corrupt political machines of a century ago, this approach makes some sense. But the truth of the matter is that you can't de-politicize politics.

The councilmembers in Bell are almost always referred to in the Times as "part-time," and the expectation is that their base pay like their colleagues in other cities, including me should be a few hundred dollars a month. But in truth there is no such thing as a part-time politicians, even if you are a politician in a small town. Politics will take as much time as you want to throw at it, and in order to stay in touch with your constituents you have to make the endless rounds of meetings and coffees and community events, which sometimes start at breakfast and last late into the evening, with little respite on the weekends. Devoting yourself to this task and having a job at the same time can be punishing indeed, and many don't even try to have a job, no matter what the consequences. I once knew a small-town mayor who got divorced when his wife finally said: "I never see you, okay. You make no money, OK. But I can't put up with both."

Most of us who run for local office know that we're buying this situation and we buy it willingly, along with the divorces, financial pressure, and strain with our day-job employers that inevitably follows. We do it for the power, or for the glory, or just because we want to help make our communities better. (Usually it's combination of all three.) But there's always a temptation to ease the burden by finding some way legal or illegal to extract some extra money out of the system because the base pay is so poor.

As for professional governmental managers, the Bell situation is a farcical manifestation of the reasonable expectation that they should be well compensated for the difficult task of running fairly large and complex organizations in a businesslike manner. A good city manager is hard to find and usually worth what he or she is paid. But there's a fine line between demanding good compensation as a matter of professional pride and insisting as Bell's Robert Rizzo did in defending his $800,000 compensation package that he could make just as much or more in private industry, which simply isn't true.

So that's the motive, which is an understandable if somewhat ugly reflection of typical human feelings and emotions.  But the real scandal, if there is one, lies in the way the supposedly "clean" California system provides the opportunity for public servants to shield their activities from public view.

There are almost 500 cities in California, most of them small. (In the "Hub Cities" area where Bell is located there are eight cities in an area that's about one-sixth the size of the San Fernando Valley.) Californians like all these cities, and believe that the existence of small cities protects them from the corrupting influence of big-city political machines. That's true if the constituents are paying attention. But the progressive-era system in California often discourages them from taking a closer look. All local elections in California are nonpartisan and most take place in March or April; in many cities as well, the mayor is a rotating position, kind of like the chairman of the board.

The obvious result is a low turnout. I have been elected to the Ventura City Council twice in typical low-turnout elections, each time having received about 8,000 votes in a city of 108,000 people with 60,000 registered voters. In cities like Bell, the problem is even worse. So many residents are immigrants ineligible to vote that the election is controlled by a very small number of people. Bell has 40,000 residents but only 9,000 registered voters because so many residents are not eligible to vote. In the last City Council election (in March of 2009) only about 2,000 people voted and the winners received about 1,200 votes each. (Several times, Bell hasn't even scheduled an election because nobody challenged the incumbents. Cities can cancel elections if they are uncontested.) Such low turnouts mean not only that most people are not engaged in the question of who runs their city, but that city leaders know they don't really have to be accountable to most of their constituents. Most of the Hub Cities were controlled by white politicians for decades after the whites had fled, simply because the only voters were the few whites who stayed behind.

The California system also discourages constituents from being watchdogs in that both the governmental and financial system is cumbersome and bafflingly complicated. Different city governments provide services in all kinds of different ways. Some have a police department, some contract with the sheriff; some run fire departments, libraries, and parks, while others are located in a special district where the city has nothing to do with providing fire, library, or parks service. So it's hard to know what your city does or where your tax money goes. And all California cities are subject to thousands of laws that even the most assiduous city attorney has a hard time keeping up with. A complicated system belongs to those who understand it and, frankly, makes it possible for the insiders to game the system.

The best example of this in the Bell situation was the 2005 election to become a charter city. Under California law, "general law" cities are governed mostly by state law while cities with charters have more independence. For local residents, living in a charter city is usually a good thing, as it gives their city more flexibility to respond to local circumstance rather than slavishly adhere to state law. That's how Bell's 2005 charter vote was sold to the voters, but it wasn't the real reason why the city pursued the vote.

The real reason was that the state had passed a law limiting city council pay in cities like Bell to $400 a month. At that time the Bell councilmembers were making something like $60,000 a year, mostly by paying themselves additional compensation for serving on various boards the city had created mostly for the purpose of increasing the councilmembers pay.
 
As it turned out, of course, the city didn't have to do much persuading. The special election to create a charter city was held on the Tuesday after Thanksgiving a month before the new law went into effect and only 336 people voted. By the way, everybody's pay went way up after the charter vote. Since that vote, the City Council's overall pay has increased 50%, and the compensation for the City Manager and other top officials which had been, up to then, on the high side of normal moved into the stratosphere.

So democracy only works, even in small cities, if people pay attention, and oftentimes people aren't paying attention. But one of the most disturbing aspects of the Bell situation at least to me, a former journalist is how hard it is to figure out what's happening even if you are paying attention. In spite of the state's vaunted Brown Act open-meetings law, California governments are still not particularly transparent. 

This is especially true when it comes to compensation for top managers. It can be really hard for the average person to find out for sure how much their city manager makes. Sometimes you can find a range if you look in city documents, but that doesn't always tell the whole story. If you don't believe me, try calling up your city and asking; you're almost certain to get a pause and a cough on the other end of the phone. In the case of Bell, Bloomberg News reported that, in 2008, an average citizen innocently inquired about the city manager's salary was given a one-page information sheet that  indicated his salary was $185,000. Which, apparently, was true. It wasn't until journalists from the Los Angeles Times showed up, knowing how to work the Public Records Act, that the full truth came out. (Here in Ventura, our city manager's salary is $174,000 per year well below his peers and about the same as it was when he was hired in 2004.)

What's disturbing about the Bell situation and whatever other Bells that haven't uncovered yet is the insidious and systematic way the system was gamed. At least in places like Lynwood, the politicians engaged in old-fashion corruption bribes, steering business to certain companies, the good old-fashioned stuff anybody from Chicago would understand. The constituents have the satisfaction of seeing their mayor arrested, convicted, and sent to jail.

But odds are that when the District Attorney completes his investigation in Bell, he's going to find that no laws were broken. The system which is mostly set up by the state has a lot of exploitable weaknesses. Clever and unscrupulous people, operating in a town where nobody was paying attention, found the weaknesses and exploited them all.

How do you fix that? There are two ways. First, change the system. Second, make sure somebody's paying attention.

Attorney General Jerry Brown has talked about capping local government salaries, but it's hard to imagine how this would work. Who would cap them? At what amount? How and when would they be changed? Capping salaries would be emotionally satisfying to the electorate, but it's pretty easy to see the unintended consequences coming.

It's probably better simply to require full disclosure. In the past two weeks, much has been made of the fact that you can find out any corporate CEO's compensation (through Securities & Exchange Commission filings) far more easily than the compensation of your local city manager. It would not be difficult to pass a law requiring all cities (and counties) to report the total compensation of their top managers to the state, and/or publish those figures on the web site.

There's precedent for this. The entire public pension debate in the state has been transformed by the simple fact that the California Pension Reform web site has a searchable database of all state and local retirees whose pensions exceed $100,000. More than any other single factor, this website database has put political pressure on state and local governments to reform pensions. (If you think local government isn't very transparent, try figuring out how the California Public Employees Retirement System works. It's almost impossible.) Just imagine if this website or one like it made the compensation packages for all high-level local government managers available in the same fashion. The Bells of the world would be embarrassed into falling into line.

The thing about most extractive industries is that they aren't very sustainable. Sooner or later, the mine is played out, or all the developable land is gone. But tax revenue goes on forever. It may go up or down over time, but the revenue stream is always there available to those clever and unscrupulous enough to grab a piece of it. It was sad enough to see the wonderful little towns in southeast Los Angeles County turn into suburbs of extraction through a series of economic and political upheavals a generation ago. It would be sadder still to see many more California cities turn into suburbs of extraction because so many governmental managers become industrious miners when nobody is paying attention.

-- Bill Fulton