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Taxi Firms Spend a Lot on Lobbying

City Hall: Companies seeking franchises in L.A. also give thousands in campaign contributions to council members.


A half-dozen taxicab companies seeking to secure lucrative franchises from the city of Los Angeles have spent tens of thousands of dollars over the past few months on lobbying activities and campaign contributions to council members, according to city and state records.

As the council finalized 10-year operating agreements with the firms on Tuesday, the city Ethics Commission was preparing to release a report showing that six taxicab companies have paid lobbyists $108,000 in the third quarter of 2000. That is on top of the $180,000 spent by cab companies earlier this year.

The firms, meanwhile, poured more than $34,000 this year into the unsuccessful state Assembly race of Councilman Rudy Svorinich, who headed the council committee looking into taxicab franchising.

City records also show that the taxi companies and their drivers have given nearly $40,000 to 16 council and mayoral candidates since April 1998. The top beneficiary of that money was Councilman Alex Padilla, who received $9,500 from nearly 40 drivers and their companies, according to city records. Joel Wachs received $7,500 and Svorinich received another $5,150 for his council account.

"There is nothing illegal about this, but it is the way everyone is doing business," said Robert M. Stern, president of the Center for Governmental Studies, which is looking into campaign finance reform. "One thing we have recommended in the past is that if you are before the city on a contract, you shouldn't be permitted to give campaign contributions. . . . It looks bad."

When asked about the contributions, Svorinich replied: "So?"

"The franchises were based upon merit. . . . For those who think otherwise, they are incorrect," he said.

Based on staff recommendations, the council voted 12-0 on Tuesday to approve nine contracts with firms representing nearly 2,400 vehicles.

L.A. Taxi Co-Operative Inc. received approval for 739 cars--the largest number of vehicles. United Independent Taxi Drivers was the second largest, with 389 cars. Los Angeles Checker Cab Co. was third with 269 vehicles.

With most of the companies up for consideration already operating in the city, the council agreed to grant a new franchise to San Gabriel Transit, with 166 vehicles. The lawmakers, meanwhile, turned down proposals from American Taxi, Smart Taxi and Valley Cab.

Ethics officials say they are preparing to release a report that shows that Administrative Services Co-Op--which runs L.A. Taxi--spent $31,562 on lobbying efforts. United Independent Taxi Drivers spent $25,409, followed by San Gabriel Taxi, with $17,250. American Livery spent $15,265, followed by L.A. Yellow Cab at $15,000. Bell Cab Co.--which got into trouble six years ago for laundering money into political campaigns--spent $3,750 on its lobbying efforts.

Independent Taxi Owners' Assn., which received a franchise agreement with 246 cars, opted not to hire a lobbyist.

Meanwhile, Svorinich reported to state elections officials this year that United Independent Taxi Drivers Inc. gave him a total of $12,500 for his campaign. He also got $8,000 from an executive affiliated with San Gabriel Taxi. He received $2,500 from L.A. Taxi and one of its executives, $3,500 from American Livery, $1,000 from Beverly Hills Transit, $5,325 from individual drivers and another $1,500 from two other firms.

"You have to understand that these companies have a huge financial stake in the decisions these council members are making," said Rick Taylor, a lobbyist who represented San Gabriel Transit. "They would be shirking their professional obligations if they didn't participate at an appropriate level."

Nevertheless, James Okazaki, assistant general manager of the city's transportation department, said the companies didn't need to spend a dime to get a fair hearing.

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