POLITICS/wchart/26inches/1stjc/mark2nd

By DANIEL TAUB

Staff Reporter

Business just lost another big one.

Los Angeles voters last week approved the City Charter Reform Commission championed by Mayor Richard Riordan, but largely rejected the mayor's hand-picked candidates instead favoring the slate backed by City Hall's most powerful employee union.

This, despite the fact that the Riordan slate, rich with business contributions, outspent labor by a 2-to-1 margin.

"Footwork beats dollar bills any day of the week," said attorney David Fleming, a leader of the charter reform movement.

"I know labor went door-to-door," Fleming said. "They really hustled."

The loss raised new doubts about the political clout of the city's business leadership doubts that first surfaced last month with the passage of a measure forcing city contractors to pay higher minimum wages.

"It shows where the power is in the City of Los Angeles," attorney Richard H. Close, president of the Sherman Oaks Homeowners Association, said of last week's election results.

"On one hand, you had the city municipal unions," Close said. "On the other hand, you had the mayor, business groups, community organizations."

Business did have at least one clear victory in the April 8 election rejection of a measure that would have extended a 3.75 percent business license surtax.

But ironically, that measure was defeated amid silence by the business community in fact, no one even filed a ballot argument in opposition.

That victory aside, the business leaders who backed charter reform are now faced with the prospect that the reform process will be taken over by City Hall special interests the same groups they say are at the heart of the need for reform.

Advisors to Riordan, who won reelection against a poorly funded challenge by state Sen. Tom Hayden, D-Los Angeles, say it's a mistake to predict what course reform will take.

"I wouldn't read too much into (the election results)," said attorney Michael Keeley, the former deputy mayor who helped engineer the charter reform campaign.

"The mayor has strong candidates in the races that are not yet decided and he has confidence that those races can be won," Keeley said. "He also feels that regardless of who is elected, the commission will be independent and committed to reform."

From the beginning, the campaign to have an elected commission rewrite Los Angeles' 72-year-old charter was Riordan's baby.

The mayor contributed $575,000 of his own money to the effort and convinced his friends in the business community including SunAmerica Inc. Chairman Eli Broad, Korn/Ferry International co-founder Richard M. Ferry and Galpin Motors Inc. owner Herbert Boeckmann II to give hundreds of thousands more.

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