Lobbying became an issue earlier this year during the underwriter selection process for a large refunding by the Los Angeles Convention and Exhibition Center Authority.
Some underwriters questioned what role former Councilman Arthur K. Snyder was playing when he appeared at public meetings of the convention authority alongside representatives from Grigsby Brandford & Co.
Snyder often works on other city matters in a registered lobbyist's role.
In a letter to a Bond Buyer reporter, Snyder objected to being identified as a lobbyist in connection with convention center refunding.
Snyder said his letters and appearances on behalf of Grigsby Brandford, "inasmuch as they have been without compensation, do not constitute, under Los Angeles law, lobbying."
Rather, Snyder and Grigsby Brandford officials said, Snyder was involved because his law firm, Snyder & Archuletta, was going to serve as underwriter's counsel on the deal if Grigsby Brandford served as senior manager.
Grigsby Brandford officials also expressed irritation at some of the attention focused on their firm during the process. They noted that major Wall Street firms not only employ lobbyists, but also make much larger campaign contributions than smaller firms.
In May, members of the convention center authority voted to appoint Grigsby Brandford as bookrunning senior manager for the refunding, with PaineWebber Inc. and Goldman, Sachs & Co. as co-senior managers. Earlier, a nine-member review committee had recommended Goldman for bookrunner, with Grigsby and Bank of America as co-senior managers.
After the authority's decision, Bank of America withdrew as an underwriter after expressing "grave concerns about the fairness and objectivity" of the process in a letter to the city administrative officer. One of the bank's complaints centered on the use of lobbyists by other firms.
The Los Angeles City Council eventually ratified the authority's decision in July, though some council members expressed concern about the intense efforts made by various lobbyists and consultants during the process.
A major complaint centered on the fact that underwriters or their lobbyists can often make behind-the-scenes allegations about their competitors' abilities without any chance for rebuttal. Some members of the authority said, however, that lobbyists played no role in influencing their decision.
Attorneys sometimes wear different hats depending on the city business at hand, and that is "one of the perplexing issues that we have to deal with," said Greg Nelson, chief of staff for Councilman Joel Wachs.
Wachs in August introduced a motion calling for fuller disclosure of city relations with lobbyists, partly because of the controversy surrounding the convention center financing.
The councilman's lobbying disclosure proposal would require all city staff members and commissioners to keep written public records of contacts with city hall lobbyists.
The current city ordinance requiring lobbyists to report compensation from clients "does not disclose the ~real' behind-the-scenes lobbying which often takes place," Wachs said in a press release.
At the time Wachs introduced the motion, Nelson stressed that there is nothing wrong with lobbying "in and of itself." Concern arises, he said, when it appears that lobbying has occurred "on the sly."
Last week, Nelson said complicated issues can arise when attorneys who act as lobbyists claim attorney-client privilege to exempt themselves from current reporting requirements. "It gets very clouded" when attorneys work in a capacity other than lobbying, Nelson said, noting that Snyder is "sort of the prime example of that problem."
Wachs' motion is currently stalled in the City Council's Rules and Elections Committee. Nelson plans to work on moving it forward, though he said council members have shown little enthusiasm for the measure to date.
"The relationship between lobbyists and governmental officials," Wachs' motion said, "has always created a cloud of suspicion over the integrity of our governmental system. One of the reasons that government is viewed with such cynicism is that many people feel that the public has much less influence over governmental decision-making than do the rich and powerful and their lobbyists."
