L.A. County to pay $1.35 million penalty after using taxpayer funds to promote sales tax hike

Los Angeles County will pay a $1.35 million settlement under an agreement approved Thursday by California’s campaign finance watchdog to resolve claims that its board of supervisors misused taxpayer money when it hired a communication firm to promote a proposed a 2017 sales tax hike.

It is one of the largest penalties imposed by the California Fair Political Practices Commission. The agreement closes the agency’s investigation into the Measure H sales tax campaign and resolves a civil lawsuit filed by the Howard Jarvis Taxpayers Association.

“This is one of the ... most egregious examples of a violation of the public trust, when public officials misuse taxpayer dollars for political purposes,” FPPC chairman Richard C. Miadich told The Sacramento Bee after the meeting closed.

The settlement stems from Los Angeles County’s Measure H, a quarter-cent county sales tax increase aimed at funding homeless services and prevention, on the March 7, 2017 Special Election ballot. The measure is expected to produce $3.55 billion in tax revenue over ten years. It received 69.3% of the vote, narrowly clearing the two-thirds majority it needed to pass.

The Los Angeles County Board of Supervisors hired TBWB Strategies, a firm that specializes in conducting campaigns designed to pass local ballot measures, to execute a public education campaign and advertising surrounding the ballot measure, according to the settlement agreement. The county’s contract with the company was valued about $1 million.

Television commercials ran in cable new stations advertising the measure included the slogans, “Real help. Lasting Change” and “Measure H on the March 7 Ballot. Are you ready? Vote March 7.” Information about Measure H also ran on Spanish-language radio stations across Los Angeles and encouraged listeners to visit an official website to get more information.

The Howard Jarvis Taxpayer Association filed a formal complaint contesting the government-funded campaign with the FPPC and the County of Los Angeles, according to the settlement agreement. A week later, FPPC opened its own investigation.

In October 2018, an additional complaint to the FPPC by the California Taxpayers Association alleged the county used public funds to support Measure W in the November 2018 election. Measure W, which received 69.5% of the vote, establishes a parcel tax of 2.5 cents per square foot of impermeable area, according to the complaint.

A subsequent lawsuit filed by the Howard Jarvis Taxpayer Association in Los Angeles County Superior Court in 2018 alleged the county violated state campaign finance law by “failing to public report the hundreds-of-thousands of dollars in taxpayer funds it spent on its political campaign supporting Measure H.”

Miadich said the settlement should send a warning that the commission “will not sit idly by when public officials illegally use taxpayer money for political purposes.”

The settlement agreement states the county “believes that it complied with the law and denies that it violated the law in any respect.” The settlement agreement states the settlement shall not be considered an admission of liability.

Of the $1.35 million settlement, the state will receive $600,000 and another $600,000 will go to Howard Jarvis Taxpayer Association. The settlement will also pay $150,000 in legal fees to the law group.

Miadich did not vote on the settlement. He recused himself because Los Angeles County was a former client of his when he worked in a private law practice in 2016 prior to joining the commission.

This story was originally published August 20, 2020 at 2:07 PM.