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

Former investment banker's withdrawal from mayor's race highlights the rising clout of labor and environmentalists — and the private sector's decline.

May 11, 2012|By Kate Linthicum and David Zahniser, Los Angeles Times
  • Los Angeles Mayor Antonio Villaraigosa, left, and First Deputy Mayor Austin Beutner. Beutner was once seen as businesses' best hope of gaining influence at City Hall.
Los Angeles Mayor Antonio Villaraigosa, left, and First Deputy Mayor Austin… (Al Seib, Los Angeles Times )

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.

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