Caruso offered to place his business in a blind trust
By Dolores Quintana
Rick Caruso, running for mayor in this year’s election to replace Eric Garcetti, is trying to address voter concerns about potential conflicts of interest due to his real estate holdings and empire, as reported the The Los Angeles Times.
Caruso has proposed placing his company, which controls billions of real estate properties in Los Angeles, in a blind trust and “allowing” others to take over the operation of the company if elected later this year.
He released a statement last Friday that Corinne Verdery, the company’s director of development and a seasoned real estate executive, is named as his successor in the event he becomes mayor. Caruso says he would no longer be in charge of the company and that he believes Verdery would be the best person for the position of CEO of Caruso.
He added, quoted by the Los Angeles Times, “I will return to the company as Executive Chairman, but she will continue as CEO.” Assuming it would be after any term that Caruso would be mayor if elected, then it’s clear he has no intention of giving up a role in the company in the future when he will no longer be elected in Los Angeles.
Of note, Donald Trump also offered to place his company and interests in a trust before running for President of the United States and his lawyers insisted that a truly blind trust was not possible. with company holdings. While Caruso says he will be totally divorced from his company’s affairs and handing over the CEO duties to someone he is unrelated to, it remains to be seen if that promise is really what is being advertised. .
When Caruso entered the mayoral race, as expected, he was less of a spoiler in the race than previously thought. Democratic Rep. Karen Bass is still the frontrunner in a field that includes City Council members Kevin de León, who ranks just behind Bass at 12 percent, and Joe Buscaino, third at eight percent. None of the other candidates, including Caruso, at an even lower six percent, passed the single-digit support level. However, the Loyola Marymount Survey issued March 2 has undecided voters as the largest voting bloc at 42%.
Caruso’s ad spend skyrocketed last week and is already far greater than any other candidate in the race. He bought many advertisements from local TV markets. Caruso has never run for office before and has only held city government and USC positions as an appointee, said he would have no say in the affairs of his company which he said would be placed in a blind trust to avoid any potential conflict. of interest. Even with the trust, Caruso would most likely have to recuse himself from any mayoral business that had anything to do with Caruso as a company. He also added that Verdery “has full authority to operate” and that “there is no communication, no approval” between her and Caruso himself if elected.
The numerous corruption scandals in municipal government related to real estate have brought Caruso and his campaign into the spotlight. An investigation into city government corruption has resulted in downfalls and guilty pleas from as many as five people linked to City Hall, including City Council aide, former City Councilman Mitchell Englander, a lobbyist and two real estate consultants.
Former City Councilman Jose Huizar will face trial in the near future for extorting developers seeking to build high-priced properties in downtown Los Angeles. Huizar was another city official involved in the corruption investigation.
Caruso himself said: “We have a deeply corrupt town hall. as quoted by the Los Angeles Times.
The Los Angeles Times quotes former City Councilman and County Supervisor Zev Yaroslavsky as saying, “Everyone has in mind what’s going on at City Hall in terms of corruption scandals. Who they hold responsible is another story. Yaroslavsky also said he doesn’t think voters will necessarily reject a developer as a mayoral candidate and that all candidates have potential conflicts of interest. Like many others, Yaroslavsky thinks voters are more concerned about homelessness and crime than other issues and are more likely to consider candidates based on those issues.
Government ethics experts are of the opinion that Caruso’s participation does not disqualify him from holding elected office, but only so long as he follows financial disclosure protocols and potential conflicts of interest if elected.
Bob Stern, co-author of the California Political Reform Act of 1974 and former general counsel for the California Fair Political Practices Commission, was quoted by the Los Angeles Times as having previously told the newspaper: “If there is anything specifically involving any of its properties, [such as] order or contract, he may have to disqualify himself. “But if it’s just development, he wouldn’t have to disqualify himself.”
Voters have elected wealthy businessmen many times before, New York City elected Michael Bloomberg as mayor, and Los Angeles elected Richard Riordan as multi-term mayor. Riordan had to pay a fine related to a conflict of interest in the file of a building in the city center of which he partially owned. His office called it an “honest mistake”.
Rick Caruso filed a 94-page financial disclosure statement that details his stock and real estate holdings. He owns more than one million shares each such as Apple Inc., Amazon, Inc., Costco Wholesale Corporation, Microsoft Corporation, Nike Inc., Johnson & Johnson, Kimberly Clark Corporation and The Walt Disney Corporation. Caruso says the company led by Verdery and chief financial and revenue officer Jackie Levy, and general counsel Ben Howell would not try to develop new properties but would focus on already existing projects and acquisitions and growing the business. their real estate portfolio and added that “I have every confidence in her not only to maintain the business. My confidence in her is to grow”
This growth could include a proposed development that has already been approved by the city government, an apartment tower near the Beverly Center. It is a mixed-use project consisting of 145 housing units located above a retail space at 333 La Cienega Boulevard. While the development was first proposed in 2015, work on the building is on hold until the apartment rental market recovers from the pandemic economic downturn. Verdery said, quoted by the Los Angeles Times, “As soon as the market meets us. We will move forward on this project.
The company could expand by offering additional developments at properties it already owns, such as Americana at Brand, which is also mixed-use with commercial space and housing. The company’s other holdings are the Calabasas Commons, the Glendale Masonic Temple building which is now office space, and the apartment building at 8500 Burton Way.