Business Backed Schools Winner

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Tamar Galatzan, a reform-minded candidate for the Los Angeles Unified School District Board of Education, rode a wave of local business support at least $2 million in all to trounce her union-backed incumbent opponent, Jon Lauritzen, earlier this month.


The total she received is by far the most business has ever contributed to an L.A. school board candidate and marks only the second time that businesses have gotten significantly involved in an L.A. Unified board race. The first time was eight years ago, when they backed a slate of candidates recruited by then-Mayor Richard Riordan.


What pushed business-oriented donors was the widespread perception that the L.A. school district is mired in a failed approach to education, with dropout rates in many schools exceeding 30 percent and test scores that, while rising, remain among the lowest in the state.


“This district is broken and will suck us down the drain if we don’t fix it,” said John Kilroy, who is founder, chairman and chief executive of Los Angeles-based Kilroy Realty Corp., a real estate investment trust.


He also is head of the Los Angeles chapter of the moderate Republican, pro-business New Majority political group. And last month, Kilroy convinced his fellow New Majority board members most of whom are current or former business executives to pony up more than $200,000 for Galatzan, the first time the group has weighed in on behalf of a school board candidate.


The New Majority wasn’t the only business group that raised money for Galatzan. The Los Angeles Area Chamber of Commerce’s political action committee put in $170,000, some of which included the contributions from the New Majority. It was the chamber’s first contribution towards a school board race.


“The business community determined we can no longer sit back and watch the LAUSD continue to operate the way it has. The status quo was no longer acceptable,” chamber president and chief executive Gary Toebben said.


While current board members and district officials vehemently deny this assessment of the school district, it has nonetheless been stoked by L.A. Mayor Antonio Villaraigosa in his unsuccessful bid to assume partial control of the district.


Last year, Villaraigosa pushed through the state Legislature a bill giving him direct control of several district schools and majority control on a new Council of Mayors that would govern the district. But the district sued and prevailed in two courts, blocking that law from taking effect.


Stymied, Villaraigosa turned to the other prong of his strategy to reform the district: changing the makeup of the school board. To that end, he formed a committee, the Partnership for Better Schools, and enlisted the support of former L.A. Mayor Richard Riordan and billionaire businessman-turned philanthropist Eli Broad. He then sought to support candidates he thought would bring change to the district.


Villaraigosa’s committee supported three candidates: children’s advocate Yolie Flores Aguilar, who won outright in March; prosecutor Galatzan and career school administrator Richard Vladovic. Both Galatzan and Vladovic placed first in the March primary, but failed to reach 50 percent, forcing the May runoffs. (Villaraigosa already had the support of current board member Monica Garcia; the Galatzan and Vladovic runoff victories gave him a working majority of allies on the board.)


Galatzan and Vladovic both had the support of business groups, but since Vladovic faced an opponent with meager funds, the major fundraising effort went to Galatzan. In all, between the heavily business-backed Partnership for Better Schools and other direct business contributions, Galatzan secured $2.3 million, giving her the necessary resources to trounce Lauritzen by a 60-40 margin.


Most of the big business dollars in the May runoff went to the Villaraigosa-controlled Partnership for Better Schools committee. (Unlike L.A. City Council races or state legislative races, there are no contribution limits for Los Angeles Unified School District board candidates.)


Among the major corporate donors: Zenith National Insurance, the Woodland Hills-based workers’ compensation insurance carrier, with at least $200,000; Majestic Realty Corp. (at least $100,000); Panda Restaurant Group, which is headed by Villaraigosa confidant Andrew Cherng ($50,000); prominent law firm Girardi & Keese LLP ($100,000) and a relative new-comer to the world of local politics, L.A.-based jeans-maker Forever 21 Inc. ($100,000).


Several business executives also stepped up to the plate in a big way, including: At least $70,000 from Beny Alagem, the owner of the Beverly Hilton Hotel who is seeking to build a Waldorf Astoria Hotel and condo tower on adjacent land; Robert Addison Day Jr., chairman of Trust Company of the West ($50,000); former Hard Rock Caf & #233; owner Peter Morton ($50,000); and Stephen Bollenbach, outgoing chief executive of Hilton Hotels Corp. and now chairman of KB Home ($30,000).


Of course, many of these businesses or executives also had other possible motivations for giving so generously. Majestic Realty, for example, has had several projects in Los Angeles, including playing a key role in developing the Staples Center.


But the scale of the giving also indicates the extreme degree of frustration among business owners with the state of the school district.


“In order to attract and retain good business, you must have a skilled and educated workforce,” said Greg Lippe, partner in the Woodland Hills accounting firm Lippe Hellie Hoffer Allison LLP and first vice chair of the Valley Industry and Commerce Association, which endorsed and contributed to Galatzan’s campaign. (VICA’s president, Brendan Huffman, is Galatzan’s husband.)


“Our feeling was that with the dropout rates as they are now, it’s simply unacceptable. We need new blood on the school board, new people that will care enough to push for the best education and not have other agendas pushing them.”


Galatzan herself sensed this during her campaign.


“As I talked with businesspeople, their number one concern was the dropout rate. There was a huge concern that with so many dropouts and poorly educated graduates, they wouldn’t be able to recruit qualified candidates locally,” Galatzan said.


“Many in the business community wanted people on the school board who understood this and that this is a crisis,” she added.


During her campaign, Galatzan promised to push the board to take some money away from the district’s administrative headquarters and redirect the funds to classrooms and teachers. She also vowed to push for more vocational education classes throughout the district’s high schools.


“We could set up apprenticeship programs where students might get high school credits while also working part-time,” she said.


Vladovic, who received more than $300,000 from the Partnership for Better Schools, said he, too, favored steering money away from administration and to the classroom. He also said he wanted to work more closely with the L.A. Area Chamber and other business organizations, getting them involved more directly in school programs.


But whether or not Galatzan and Vladovic can deliver on their promises to the business community is an open question. Eight years ago, after the slate of candidates backed by Riordan and the business community won election to the board, the teachers’ union fought back. Two years later, they backed their own candidates and knocked out two members of the Riordan slate, returning the board to a union-friendly majority.


This time, though, the teachers union is talking a different game. United Teachers Los Angeles president A.J. Duffy has made the circuit of local television and radio talk shows saying he supports many of the same goals that Galatzan and Vladovic have put forward, especially pushing money out of administrative headquarters and into classrooms.


“We’re committed to making an alliance with all elements of the community, and that includes the business community. We will reach out to all the school board members, whether we endorsed them or not,” UTLA vice president Joshua Pechthalt said last week.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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