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B-202975 1 (1981-11-03)

handle is hein.gao/gaobacsrg0001 and id is 1 raw text is: 


                    COMPTROLLER GENERAL OF THE UNITED STATES
                               WASHINGTON D.C. 20548



B-202975                               November 3, 1981



The Honorable Bobbi Fiedler                                              -N
House of Representatives                                                 at

Dear Ms. Fiedler:

     We refer to your letters of April 15, and May  19, 1981, requesting
this Office to determine whether the Los Angeles  Community Redevelopment
Agency  (CRA) and the Los Angeles Downtown People Mover Authority (DPMA),
which are recipients of Federal grant  funds, have expended any of these
funds in violation of an appropriation restriction prohibiting  their use
for lobbying activities.  You also asked us  to investigate whether CRA or
DPMA had used Federal funds to retain the  services of law firms for the
purpose of engaging in efforts to influence  appropriation measures and
other legislation pending before the Congress.

     Our review of the accounts of these  recipients disclosed no violation
of Federal statutes in the retaining of the law  firms. However,  DPMA
apparentfy used Federal grant funds in violation of  an appropriation act
restriction to prepare and disseminate a newsletter encouraging  readers
to write their Congressmen and Senators  in support of a continuation of
Federal funding for the Los Angeles People Mover project.

Community Redevelopment Agency

     The CRA was established by the City of Los Angeles  to revitalize parts
of the city.  It is governed by a Board of Commissioners  appointed by the
Mayor andsconfirmed by the City Council.  Its primary  source of funding
stems from a real property tax increment that  represents the difference
between current property taxes and the property taxes  that were in effect
when parcels were designated for tedevelopment  several years ago.  Other
funding comes from grants from local, state and  Federal governments.
Federal funding is derived from grants from the Department  of Housing and
Urban Development and the Urban Mass Transit Administration  of the Depart-
ment of Transportation.

     Shortly after the Reagan Administration came  to power, it became
apparent from media reports that continued  Federal funding for the down-
town people mover was in jeopardy.  CRA's plan to  rebuild the downtown
portion of the City was in part based on DPMA completing  the people mover
as originally scheduled.  Fearing that the program might be  canceled, CRA
officials, with its Board's approval, decided to  retain the services of a
law firm.  On April 23, 1981, a contract in the amount of  $18,000 was let
with the firm of Manatt, Phelps, Rothenberg and Tunney  for General
Financial Planning with the purpose of determining alternative  financing
arrangements for the people mover if the Federal Government  ceased to
fund the project.

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