Beutner’s exit shows waning influence of business at City Hall

When Austin Beutner entered the mayor’s race last year, it looked like the wealthy former investment banker and onetime city jobs czar might give the Los Angeles business community its best chance in years at regaining influence at City Hall.

His abrupt exit from the campaign this week after struggles with fundraising and a poor showing in the polls highlights the decline of political power that was once wielded by the city’s business elite.

That weakening comes as the business sector’s traditional rivals — organized labor and environmental activists — are enjoying increasing influence. Unions and environmental groups are pushing to boost wages for hotel employees, impose potentially costly new regulations on private trash-hauling companies and enact a ban on paper and plastic bags at supermarkets.

Business groups have been fighting those measures while struggling to make headway on issues they support, including the quick elimination of a key business tax that costs companies more than $440 million a year.

How much heft the private sector can muster to battle those proposals — and what role it will play in electing the next mayor — is a question taking on new urgency at City Hall.

“The record is clear that unions have been much more effective at elections than business has,” said attorney Ben Reznik, a lobbyist who has worked for real estate developers in Hollywood and elsewhere.

Some business advocates and City Hall insiders complain that the private sector fails to invest the time and money needed to compete with organized labor and defend the few remaining council members who have been reliable allies.

“They don’t step up. They don’t spend money. They don’t organize. They don’t talk to each other,” said Steve Afriat, a lobbyist whose firm has represented dozens of companies at City Hall.

Gary Toebben, president and chief executive officer of the Los Angeles Area Chamber of Commerce, conceded that business influence in Los Angeles city government has waned in recent decades. It’s part of a national shift, he said, as companies turn their focus to the global market.

“I would suggest that probably there’s no city in the nation in which business has as much clout as it did 20 years ago,” he said, noting that the headquarters of several large corporations that once played a key role in civic life have left Los Angeles.

Some notable big businesses in Los Angeles still work their will on City Hall, often teaming up with unions and well-connected lobbyists. Backing from construction trades and the powerful Los Angeles County Federation of Labor has been central to Anschutz Entertainment Group’s success moving forward with its proposed downtown NFL football stadium.

Stuart Waldman, president of the Valley Industry and Commerce Assn., insists that his group is more vital than ever, stopping or softening recent proposals to regulate banks and apartment owners. “You do realize that we live in a Democratically controlled, labor-backed city that is extremely anti-business, right? So, of course, we are spending a lot of time on defense,” he said.

Business advocates say that they want a mayoral candidate who will embrace their agenda and exercise independence from labor. In the opening days of his campaign, it appeared that Beutner might fit the bill. He earned an early endorsement from former Mayor Richard Riordan, a Republican and wealthy investor with deep ties to the business community. Beutner, who got an inside, top-level view of City Hall as a $1-a-year first deputy to Villaraigosa, was warmly received by many business leaders as a proven Wall Street success attuned to their needs.

With his departure, and another wealthy civic and business leader, mall developer Rick Caruso, still on the sidelines weighing a run for mayor, it’s not clear where traditional business support may gravitate. Three of the remaining mayoral contenders with long City Hall records maintain that they have the interests of business at heart, while simultaneously vying for labor support.

Councilman Eric Garcetti has touted his work in revitalizing Hollywood and attracting electric car manufacturers to the city. Councilwoman Jan Perry has talked up new developments in downtown and South Los Angeles under her watch. Controller Wendy Greuel, a onetime executive at DreamWorks SKG, boasts that she now is the candidate with the most business experience.

At the same time, Greuel and Garcetti frequently rally crowds at labor events. Both have sided with public employee unions by opposing new layoffs to balance the city budget. The only major Republican in the race, former radio host Kevin James, says his fiscally conservative views make him the natural business candidate.

The business community decline stands in sharp contrast to the 1960s, when a small clique of executives known as the Committee of 25 played kingmaker in Los Angeles politics. The group held private meetings with mayors, county supervisors and school board members, “like the emperor calling on the courtiers to explain their policy and shape it,” according to Robert Gottlieb, director of Occidental College’s Urban and Environmental Policy Institute.

Business elites continued to play a role during Mayor Tom Bradley’s 20-year administration and they found a strong ally in Riordan, who succeeded Bradley in 1993. But their influence gradually eroded, Gottlieb said, as the city became more Latino and Asian and as labor unions formed new coalitions with environmentalists and neighborhood activists.

Roxana Tynan, executive director of Los Angeles Alliance for a New Economy, a think tank backed by labor and environmental groups, said the wider distribution of political power has been a good thing. “It’s much healthier for the city,” she said, adding that traditional business goals of deregulation and lower taxes still hold sway among some elected leaders.

Still, Riordan bemoans what he sees as the disengagement of groups like the Chamber of Commerce, saying they have been “essentially not involved” in local politics. Perry, one of the business community’s most reliable votes, said business organizations have lost influence because they can’t be counted on to stand by their friends.

They recently went silent, she said, as she fought a losing battle to keep surrogates of Villaraigosa and council President Herb Wesson from shifting much of downtown out of her district. “What it communicates is that they can be intimidated, put in check and rendered powerless,” Perry said.

Others contend that business leaders did too little to help Councilman and former Police Chief Bernard Parks, a budget hawk and reliable vote for business when he came dangerously close to losing his reelection last year after labor groups spent $1.2 million to defeat him.

Afriat, the lobbyist, recalled his appeal to 350 members of the Valley Industry and Commerce Assn. for donations to Parks’ campaign, which yielded only two responses. That sent a message, Afriat said, that “the business community was not willing to step up for one of their friends.”

Waldman, the Valley Industry and Commerce Assn. president, said Perry’s redistricting fight had nothing to do with business. And he argued that Parks did too little to get to know Valley business leaders. But he also said business owners tend to be cautious when it comes to entangling themselves in local politics.

“They don’t just not help their friends,” he said. “They don’t punish their enemies either.”

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