Local business interests are upset about a proposal to overhaul Los Angeles city lobbying rules, claiming it does nothing to address what they see as pervasive union influence at City Hall.

The proposal, to be unveiled this month by the Los Angeles Ethics Commission, would change the criteria for who should register as a lobbyist. But it continues to exempt many labor unions and allied social service organizations that often exert influence with city officials, while business interests and their representatives remain subject to stringent reporting requirements.

?here? an unlevel playing field now and this ordinance makes sure that the unlevel playing field will continue,?said Carol Schatz, chief executive of the Central City Association, which represents major downtown businesses.

Schatz and some other business leaders said the impacts of this imbalance go far beyond the confines of City Hall. They say labor interests often meet secretly with City Council aides or bureaucrats and craft policies that hurt business. Those include project labor agreements that effectively shut out nonunion private contractors, or expansion of the living wage ordinance. By the time business interests find out, the deals are all but sealed.

?his goes to the heart of why Los Angeles is such a difficult place to do business in,?said David Fleming, founding chairman of the Los Angeles County Business Federation, which was launched 18 months ago as a counterweight to union influence in the city and throughout the county. ?t all goes to this mindset of elected officials that business interests are inherently suspicious while labor interests are inherently good.?p>Labor unions and their allies counter that they are reporting their lobbying activities and following the rules. They also dispute the notion that they have a significant advantage over business interests at City Hall, pointing to influences that developers and city contractors wield through campaign contributions.

?e don? see that a case can be made that worker interests are protected as a special class at City Hall,?said James Elmendorf, policy director for the Los Angeles Alliance for a New Economy, which was formed in the mid-1990s to push for a citywide living wage ordinance. The organization receives financial support and other backing from labor unions.

Current rules

Under the current city lobbying ordinance, any individual or group lobbying 30 hours over a 90-day period must register. This is the category in to which most labor groups fall.

Professionals who get $1,000 or more for advocating on behalf of clients during a three-month period also must register. That is the rule that applies to most business lobbyists.

Businesses complain that the unions, so long as they lobby less than 30 hours, are exempt. But since businesses typically hire professional lobbyists, the registration requirements kick in very quickly.

What? more, businesses say there? a kind of second loophole for unions. That? because non-profit organizations that lobby are exempt from reporting requirements if they provide services to the community at below-market rates. That would mean homeless shelters and other such organizations.

But business proponents allege that labor lobbyists unfairly squeeze into that exemption by claiming, for example, that they provide below-market benefits to their membership.

Unions also benefit from the current exemptions when they?e in contract negotiations with the city, even when those contracts include provisions that impact private employers.

One recent example: The Building Trades Council of Los Angeles and Orange Counties, which has negotiated a series of project labor agreements with city agencies, was exempt from registering. Project labor agreements limit the ability of nonunion employers to bid on city contracts.

Businesses hoped for some relief under the proposed ordinance, which is to be unveiled this month and subject to Ethics Commission hearings. However, the proposed ordinance doesn? lift exemptions for non-profits and labor unions in contract negotiations. But it does change the criteria for registering and reporting. Instead of using 30 hours as the threshold for reporting, it uses five contacts with city officials. The change is seen as meaningless by business interests. It? also seen as a reporting hardship.

?hat? the problem that this solution is supposed to fix??asked Arnie Berghoff, a lobbyist who has represented the interests of airport-area hotels and many other businesses at City Hall. ?oes that mean if I bump into a council deputy in the hallway and ask for an update on an ordinance, I have to record the date and time and content of that contact and meeting and send that into the city Ethics Commission??p>Berghoff said the new rule would discourage casual contacts at City Hall that help lobbyists stay up to date quickly and efficiently.

Above all, business leaders say that everyone who meets with city officials should be subject to the same rules.

?nyone who influences public policy in this city who is contacting high-ranking city officials should be treated the same,?Schatz said.

The battle over living wage expansion to airport hotels, backed by the Los Angeles Alliance for a New Economy, is seen as a key example of labor? advantage in the city.

At the time, in 2005 and 2006, the alliance did not have to register as a lobbying organization. Alliance leaders met with city officials many times while crafting an ordinance to expand living wage coverage to the workers at 13 hotels around the Los Angeles International Airport. The business community wasn? aware of the meetings until a draft ordinance was introduced and the alliance had already locked up support from a majority of the City Council.

That put the hotels at a severe disadvantage in fighting the ordinance, and it passed. A long and costly court battle ensued, and the hotels ultimately lost.

The alliance registered as a lobbying organization in 2007 under revisions to the ordinance that were passed after contracting favoritism controversies under the administration of former Mayor James Hahn.

The alliance? executive director, Madeline Janis, is prohibited from lobbying because she sits on the city Community Redevelopment Agency board.

Access and contacts

However, business interests said that she can wield influence with her contacts at City Hall nonetheless, while they would have to register and report if they had the same kind of access and contacts.

Elmendorf said the non-profit has complied with all requirements, registering four of its employees as lobbyists last year and two this year.

Schatz said that other alliance members who lobby are exempt from reporting because they don? meet the 30-hour-per-quarter threshold.

Labor officials say the exemptions are designed to address the differences in what unions do and what business lobbyists do. Union leaders represent their members and paid lobbyists represent developers, contractors and other for-profit interests.

?e feel that anyone who gets paid for the sole purpose of influencing City Hall should have to register to lobby if they meet the thresholds required,?said Mary Gutierrez, spokeswoman for the Los Angeles County Federation of Labor, which is not currently registered as a lobbying organization because it doesn? meet the 30-hour threshold. It? unclear whether the change from hours to contacts will change that.

The federation is led by Maria Elena Durazo, one of the most powerful people at City Hall and a key ally of Mayor Antonio Villaraigosa and City Council President Eric Garcetti. As such, business interests face long odds of getting their changes to the lobbying ordinances passed.