An L.A. City Council member is launching a nonprofit. Ethics experts have questions

Good morning, and welcome to L.A. on the Record — our City Hall newsletter. It’s Dakota Smith, giving you the latest on city and county government, with help from David Zahniser and Matt Hamilton.

Los Angeles City Councilmember Tim McOsker is launching a nonprofit to pay for basic services, including street lighting and park improvements, in his Harbor-area district, an unusual move that raises questions for ethics experts.

The One Five Fund, which formally launches in the next few months, “will make requests of folks throughout the city for money,” McOsker told business leaders, lobbyists and others at a Los Angeles Current Affairs Forum luncheon last month.

McOsker, in an interview, said the nonprofit will help cover services in Council District 15 that the city can’t, because of its ongoing budget crisis.

Donations received by the One Five Fund will be directed to other nonprofits, which will do the work, he said, adding that it’s important to support those nonprofits because federal grants may disappear under the Trump administration.

McOsker will fundraise for One Five but will not be involved in allocating the money, according to his office.

“What I want this to be is something that outlives me,” said McOsker, who worked at a nonprofit linked to the L.A. Port before he was elected to the council in 2022.

Already, several nonprofits help raise private donations for city agencies, including ones linked to the fire, police and parks departments. Mayor Karen Bass is an advisor to and raises money for the nonprofit Mayor’s Fund, started under then-Mayor Eric Garcetti to pay for an array of programs. The fund’s mission during the Bass administration has shifted to combating homelessness.

But a nonprofit to bolster services in a city council district is much less common.

The CD 11 Foundation, run by supporters of City Council member Traci Park, funds infrastructure and public safety in Park’s Westside district. The foundation’s website features photos of Park, but she isn’t involved in its fundraising or operations, said her spokesperson, Pete Brown.

Doug White, a philanthropic advisor who has written several books about nonprofits, said One Five Fund’s objective is likely worthy.

“The question I have is, why doesn’t the city do these things itself?” he said.

White also expressed concern that McOsker is raising money for the district without a mandate from the public about how the money should be spent. In other words, the nonprofit — not taxpayers or the council member — is deciding the spending priorities.

As a fundraiser for One Five, McOsker can hit up lobbyists and bidders for city contracts. Under city ethics rules, such sources are barred from giving to political campaigns or a politician’s office holder account.

The city also restricts donors from giving more than $1,000 per election to a council member’s campaign or office holder account. There are no such limits on donations to nonprofits.

However, McOsker must report donations of $5,000 or more that he obtains for the One Five Fund as “behested payments.”

Sean McMorris, an expert in ethics and transparency for the watchdog group California Common Cause, said that “even if the end result is a benefit to the constituents,” the One Five Fund creates the appearance of “pay to play.”

“It’s outside of the bounds of campaign finance law, and the public is just left to hope and pray that the money going in and out of this nonprofit is not creating any undue influence with this particular politician,” he said.

If L.A. has a budget shortfall and council districts are strapped for cash, McMorris said, politicians “need to do the hard work” of prioritizing departments or raising taxes, rather than relying on private donors.

McOsker spokesperson Sophie Gilchrist reiterated that the council member won’t be involved in allocating the nonprofit’s funds. Also, a board of advisors will develop the guiding principles for the fund.

“They will engage with the community to determine funding priorities and will make allocation decisions,” Gilchrist said. “The council member will ensure full transparency by reporting all contributions as behested payments for the public to review.”

Each of the 15 council districts has discretionary money from a variety of sources, but the amount varies by district, according to an analysis by City Controller Kenneth Mejia.

With the city budget expected to tighten, “now is the right time for a fund like this to connect the philanthropic world directly with community organizations,” Gilchrist said.

While the One Five Fund hasn’t formally launched, it already has one large donation.

In January, Marathon Petroleum Corporation gave $750,000 to the fund, according to a behested filing McOsker made with the City Ethics department. The oil company operates the largest refinery on the West Coast in McOsker’s district and nearby Carson.

The payment was the last of the money Marathon owed to the city through a 2017 arrangement. Tesoro Corporation, which was later purchased by Marathon, agreed to pay $9 million to fund community benefits in District 15 in exchange for the city not pursuing litigation related to the merger of its Wilmington and Carson refineries.

The City Council in December voted to approve the transfer of the $750,000 to the One Five Fund through the California Community Foundation and to stipulate that a Tesoro employee join the One Five Fund’s advisory board.

Alicia Rivera, an organizer with Communities for a Safer Environment, which fights for healthy conditions for those living near refineries, called it “unfortunate” that an oil employee will be on the advisory board.

She said that oil companies have a history of funding community services in the Harbor area, which she believes is part of an effort to deflect criticism about the refineries’ health effects on residents.

Marathon didn’t respond to a request to comment on Rivera’s statement.

Gilchrist, the McOsker spokesperson, said the money is owed to the community through an agreement made four years before McOsker took office.

“By putting it into the One Five Fund, and adding a multi-member advisory group, the fund structure is designed to dilute the influence of any one donor, including this one,” she said.

State of play

— TEXT MESS: Bass told reporters that she will no longer auto-delete her text messages every 30 days after The Times revealed that she wasn’t saving them. Bass also said the city is now attempting to retrieve her deleted messages related to the Palisades fire, which The Times is seeking through a public records request. “Stay tuned,” Bass said at a news conference this week.

— NOWHERE TO GO BUT UP: A poll of L.A. city voters found that many people are less than impressed with Bass’ handling of the Palisades fire. A little over 40% said they thought Bass did a poor or very poor job, while just 19% characterized her response as excellent or good, according to the UC Berkeley Institute of Governmental Studies-Times survey.

— RALLYING BEHIND HER: With Bass now facing a recall effort, her supporters are warning that right-wing billionaires are coming for L.A. and that Bass is under attack from “wealthy oligarchs,” including Rick Caruso and Elon Musk. Bass could seize on those arguments as she runs for reelection and fends off the potential recall.

—SCRUTINY ON THE COUNTY: All 17 of the deaths from the Eaton fire occurred west of Lake Avenue, where residents did not receive an evacuation order until much later than other areas. Now, it appears that L.A. County fire or sheriff’s officials failed to set the alerts in motion.

—TALE OF THE TAPES: Officers in the LAPD’s recruitment office were secretly recorded making racist and derogatory comments about Black applicants and female, lesbian and gay colleagues, according to a complaint filed with the LAPD. The scandal could blunt recruitment efforts in a department that is struggling to bring in new officers.

—SECURITY FOR DWP CHIEF: The commissioners overseeing the Department of Water and Power were set to vote Tuesday on a contract for up to $700,000 in annual spending on private security for DWP CEO and chief engineer Janisse Quiñones. But DWP commission president Richard Katz said that Bass had called him the night before and “made it very clear that she would like ... a much less expensive contract than the one that we have before us.” DWP is set to explore less costly options and present them at a meeting later this month. Meanwhile, DWP ratepayer advocate Fred Pickel indicated that he thought the security costs were reasonable and in line with what other utilities pay.

—SHE’S RUNNING. SO IS SHE. ALSO, SHE’S RUNNING: State Sen. María Elena Durazo announced that she’ll seek the L.A. County Board of Supervisors seat held by outgoing Supervisor Hilda Solis. Former Assemblymember Wendy Carrillo and Sara Hernandez, a trustee for the L.A. Community College District, are now seeking Durazo’s District 26 seat.

QUICK HITS

• Where is Inside Safe? The mayor’s signature initiative to tackle homelessness went to the intersection of Sunset Boulevard and Myra Avenue in Silver Lake, located in Councilmember Hugo Soto-Martínez’s district. Outreach workers returned to some previous Inside Safe locations, including the area around Glendale Boulevard and Montana Avenue in Echo Park, which is also represented by Soto-Martínez.
  
• On the docket for next week: The Budget and Finance Committee will hear Mejia’s report on revenue projections. Mejia is predicting that revenues will decline slightly in the fiscal year that begins July 1. “That creates a huge challenge for the Mayor and City Council to confront in adopting a balanced budget for FY 25-26,” Mejia wrote in his report. Bass will release her budget next month.