John Noguez Scandal Prompts State Legislation To Treat Tax Agents As Lobbyists

Assemblyman Mike Gatto is preparing to introduce legislation in response to the alleged "pay-to-play" scandal at the L.A. County Assessor's Office.

The bill focuses on tax agents, who are hired by property owners to push for lower appraisals. As the L.A. Weekly has reported, tax agents commonly contribute to candidates for assessor, and encourage their clients to do contribute. The L.A. district attorney's office is investigating allegations that one tax agent, Ramin Salari, used contributions to obtain favorable treatment from Assessor John Noguez. (Their attorneys have denied those allegations.)

Gatto's bill, AB 404, would require tax agents to register as lobbyists, in counties that already regulate lobbying. The bill leaves it up to the counties to craft specific regulations, but such rules could include bans on contributions and gifts, and requirements to disclose client lists.

"I think it's unwise policy that these so-called tax agents can lobby assessors in the backrooms of government with no disclosure," Gatto told the Weekly. "It's hard for them to argue they should not be subject to this."

Noguez, whose home and office were searched two weeks ago, supports the measure, said assessor's spokesman Louis Reyes. Noguez's office has already drafted proposed tax agent regulations and sent them to Supervisor Gloria Molina for consideration at the Board of Supervisors.

The draft regulations would require tax agents to register with the county, would forbid them from making campaign contributions to any county elected official. They would also bar tax agents from giving gifts worth more than $50 to county employees. Tax agents would also have to make annual reports to the county listing their clients.

Molina, however, has decided to hold off on introducing the proposed ordinance, and no other supervisor has offered to take it up. The supervisors recently asked for an audit of the assessor's revenue projections, after those numbers came in lower than expected. The D.A. is also continuing to investigate Noguez's office, which has made county supervisors wary of getting too closely involved.

"We want to wait until all the facts are in," said Roxane Marquez, Molina's spokeswoman.

Gatto (D-Silver Lake) said he had been prompted to introduce the legislation after reading coverage in the Weekly and elsewhere.

"This might be one of those cases where the locals are too close to the problem, and it's appropriate for a state official to step in and get some sort of uniformity statewide," he said.

Update: In a statement, Noguez expresses full support for Gatto's bill, which he calls "long overdue and a much needed reform."

Noguez notes that since the housing crash, the tax agent business has "grown quickly and without oversight." He says that Gatto's bill would address "concerns about transparency and accountability," and touts his own proposal to Molina.

Meanwhile, Peter Kotschedoff, the president of the California Alliance of Taxpayer Advocates, says it's too soon to start responding to the scandal with broad policy changes.

"CATA believes it would be premature for any action to be taken until the District Attorney investigation, the L. A. County Auditor-Controller audit and the State Board of Equalization regular survey are concluded," Kotschedoff says in a written statement.


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