LA's prime movers: Behind a facade of movies and mayhem, the City of Angels is a prime focus for American industrial and political power. Phil Reeves spotlights three key players

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The Independent Online
THERE CAN be few cities in the Western world with a worse reputation. When billions of viewers tune in for tonight's World Cup Final in Pasadena, a suburb of Los Angeles, three images are likely to spring to mind: riots, fires and earthquakes.

They may also recall the extraordinary pictures of O J Simpson, America's erstwhile football hero, being pursued along a freeway by a posse of police cars last month. Or details of the child sex abuse allegations against Michael Jackson, or the scandal surrounding Heidi Fleiss, the alleged Hollywood madam.

Nothing in the recent history of Los Angeles has done much to dispel its reputation as the world capital of natural disasters and human folly. Yet this is neither new nor particularly accurate. LA has been misrepresented for decades, ever since estate agents stuck oranges on Joshua trees in the hope of selling plots to the thousands who flooded to the city, drawn first by gold, sunshine and oil, and then by movies, defence jobs and simply dreams.

Yet it contains a grain of truth, enough to merit the question: who runs the City of Angels? Who, if anyone, wields the power? And where does it lie?

The answer is more complicated than one might expect. LA is not only a playground for the beach-loving or star-struck, or the killing-field for tens of thousands of young black and Latino gang members. The region is also the largest industrial conurbation in the US, and includes a high proportion of the country's wealthiest and best-qualified people. I decided to explore the role of three key players in LA, in the hope that this would illuminate the mystery of a city which is, at times, as Byzantine and impenetrable as Roman Polanski's Chinatown.

It is surprising to discover that one of LA's main movers and shakers is a friend of both Baroness Thatcher and of Prince Charles. Yet politically different, high-powered connections characterise the modus operandi of Lod Cook, the chairman of the LA-based oil giant Arco. Although he himself is not a household name, his address book contains the private phone numbers of some of the most influential people on the planet.

When George Bush, a golfing buddy, was running for office, Cook raised bundles of campaign dollars. For years, Cook has been equally friendly with Ronald Reagan - in fact he chairs the foundation that helps fund the Great Communicator's presidential library in the hills north of the city. When the library opened in 1991, Cook was instrumental in convening all five living presidents, Bush, Reagan, Ford, Carter and Nixon, for the ceremony.

Cook is a Republican, but he forges relationships with all the pragmatism of a professional gambler covering his bases on the roulette tables of Las Vegas. In the last presidential election, Arco also contributed to the Democratic National Committee, largesse which may explain why the Clintons occasionally invite Cook to the White House.

But the focus of his influence and activities is as much in LA as it is in Washington DC. From the company's high-rise corporate headquarters in the city's downtown sector, he and his recently appointed chief executive, Mike Bowlin, preside over the largest corporation in southern California, an empire of 25,000 employees worldwide, which generated dollars 19bn last year.

Five or six times a month, giant tankers sail down the West Coast carrying millions of barrels of Alaskan crude destined for an Arco refinery in Carson City, in south LA. There, it is turned into jet fuel, diesel and petrol. The company holds the dubious distinction of selling more petrol in southern California, the world's largest market for it, than anyone else, out-performing its LA- based rival Unocal. In the western US, Arco is the king of the petrol pump, proving the drip-feed for many of the millions of vehicles that teem over LA's 700-mile network of freeways.

These days, the 66-year-old Cook needs every ounce of his considerable skills as a politician. The shroud of health-threatening smog that often fills the skies over Los Angeles, blotting out views of the surrounding mountains and the Pacific Ocean, has ensured that Arco must operate within some of the toughest, and most complex, environmental regulations in the world. These include a revolutionary mandate from the state air pollution authorities which stipulates that by 1998, 2 per cent of all cars sold each year in California by major manufacturers must be zero-emission - in other words, electric. Arco and the motor industry have fought the measure, so far to no avail.

Arco has responded to the increasingly hostile regulatory environment by trying to pre-empt tougher restrictions, with the introduction of cleaner petrol, and by pursuing a strategy of weaving the company into the fabric of LA. The chairman, once described by Business Week magazine as the industry's 'most public relations-conscious executive', has been in his element. Over the years, the Arco Foundation has spent millions on community projects.

Last year saw the near-collapse of Rebuild LA (RLA), an organisation set up after the riots two years ago, in which 53 people died and thousands of businesses were damaged or destroyed, after a predominantly white jury failed to convict four police officers for beating a black motorist, Rodney King.

RLA's mission was to secure investment to LA's blighted areas, poor neighbourhoods long spurned by banks and insurance companies, burdened by crumbling and overcrowded schools, and dominated by heavily armed gangs and crack cocaine dealers. But the 88-member board quickly became buried beneath red tape and hopelessly split by factional squabbles.

Who should step into the breach? Lod Cook was acting in a personal capacity when he agreed to become RLA's volunteer chairman. But his appointment also ensured that Arco the corporate monolith became your caring, sharing Arco, willing to invest in the future of poor districts like South Central, Watts and Pico-Union, willing to pour oil on troubled waters in America's most divided, ethnically diverse city.

The company makes no bones about how it moves with the shifting tides of power. 'We feel that these days you have got to be flexible, to see other people's point of view,' said Albert Greenstein, an Arco spokesman. That, he explained, was one of Cook's strengths. A modest man, who still lives in a small house in a less-than-glitzy neighbourhood, he knew how 'to bridge the gaps'.

Richard Riordan is also a Republican, a businessman, a millionaire, and, unsurprisingly, a long- standing friend of Cook. When he became mayor of LA last year, in an election dominated by the conservative white middle-class, many in the city - especially in the black community - were horrified.

At a time when the city needed a consensus-builder, capable of bringing together its warring factions, the electorate had chosen a rich, white, venture-capitalist lawyer. To some, his arrival at City Hall boded an unwelcome return to the days when LA was run by a clique of wealthy white males, and decisions were taken on the manicured fairways of the Los Angeles Country Club - a stuffy and intensely private institution that did not admit a black member until 1991. It marked a jarring end to the powerful coalition of Westside Jews and LA blacks who returned Tom Bradley, the city's first black mayor, to office for two decades.

However, some of Riordan's critics now concede that they have been pleasantly surprised. So far he has lived up to his campaign promise to be non-partisan, so much so that some Republicans have taken to wearing Riordan badges bearing the legend RINO: Republican In Name Only. He has also won grudging respect by drafting a dollars 4.3bn budget for the city, which raised spending by 10 per cent, after a three-year freeze, without resorting to tax increases or job cuts.

'At first there was a fear within the minorities that Riordan would overlook our interests, but I can't say he has come to office with a white frame of mind,' said Larry Brown, a black union official with the Los Angeles Federation of Labour, who is from South Central LA. 'It appears he is trying to be mayor to all citizens in the city.'

A Jesuit-educated Catholic, Riordan has been particularly careful to build links with the Hispanic population, who comprise the largest section - about 40 per cent - of the city's population and much of its supply of cheap labour. LA's affluent areas are serviced by a silent army of Mexican and Central American valets, maids and gardeners, whose willingness to work for minimal pay and long hours allows their employers to live in unusual luxury. Although many are illegal immigrants, many more are not. To date their political clout is limited, but Latino representation in government is growing. The mayor knows that one day he will probably need their vote.

Like most of LA's power brokers, Riordan only occupies one fiefdom within a far larger territory, a patchwork of interlocking and often feuding interests. His realm - the city of Los Angeles - includes only 3.4 million of the 14 million who live in and around the metropolis, which sprawls over 70 miles.

LA County embraces far wider boundaries, 4,083 square miles containing more than 9 million residents, and 88 incorporated cities - including Beverly Hills, with 34,000 residents and more Rolls Royces and millionaires per capita than anywhere else in the world, and a police force that boasts about its three- minute response time. (After running amok in the city of LA, looters foolish enough to stray across the borders into Beverly Hills during the riots were quickly pounced upon.)

Despite efforts to broaden their numbers, the county authority is ruled by five elected supervisors - 10 fewer than the number of LA city councillors.

Although much of their dollars 14bn budget is controlled by the state or federal government, the supervisors fund several sensitive areas - notably, the Los Angeles County Sheriff's Department and the District Attorney's office (which has recently had the unenviable task of grappling with such tricky cases as the murder trial of the two Menendez brothers and the much-publicised O J Simpson affair).

If you ask Angelenos in the entertainment industry to name the most powerful individual they can think of, one person crops up with surprising regularity. The choice is formidable, to say the least: they could select Michael Eisner, America's highest-paid chief executive, whose Walt Disney Company last week broke another record, when US box-office receipts from The Lion King passed the dollars 150m mark after only 20 days in release; or David Geffen, the multi-millionaire founder of Geffen Records; or Steven Spielberg, the director-producer whose power is such that he can make whatever movie he likes; or, for that matter, Barbra Streisand, one of the entertainment world's most politically active stars. But the name that comes up most often is that of Michael Ovitz.

As co-founder and chairman of the Creative Artists Agency, Ovitz, at 47, represents the industry's biggest names - celebrities who merely have to agree to appear in a film (no matter how lousy it is) to guarantee its success at the box office. His client list reads like a Who's Who of show business: Kevin Costner, Robert De Niro, Robin Williams, Tom Hanks, Whoopi Goldberg, Martin Scorsese . . . Ovitz is, it is said, the only person the studio chiefs are terrified of insulting.

But Ovitz is far more than merely a talent agent. In the past few years, he has become the industry's most prominent investment broker. In 1989, he was the intermediary in the sale of Columbia Studios to Sony, and later of MCA / Universal to Matsushita - a multi-billion deal which prompted loud complaints that the US was handing over its greatest assets to the Japanese. (These faded when Hollywood insiders carried on running the studios, negotiating huge salaries from their masters in Tokyo.)

And last week his name was being whispered in connection with a bid for QVC, the cable shopping channel, after the breakdown of its merger negotiations with CBS. 'There are very, very few big deals in Hollywood in which Michael does not play a part,' said one industry insider, 'And none that he doesn't know about.'

Ever since the first moguls - mostly Jewish immigrant businessmen - set up their movie empires amid the orange groves and oil wells of LA in the 1920s, the outside world has increasingly tended to mark the place as a One-Trick Town. In reality, things are rather different: Hollywood has always been an element in a much more complex and diverse organism - an important cog, but only a cog.

The number of people employed by the film and television industry across the region is 200,000 - a third of those working in business and management services, less than half the number in tourism, and about the same number as those who have so far survived post-Cold War cuts and work in defence and aerospace. Furthermore, most of the studios are owned by multinational conglomerates with headquarters elsewhere - for instance, 20th Century Fox (News Corp), Warner Bros (Time Warner), MCA / Universal (Matsushita) and Columbia (Sony).

Yet the entertainment business is vastly influential, in LA and far beyond. The ideas dreamed up in the studio lots at Burbank or Culver City dictate the world's cultural iconography, and generate dollars 10bn annually in receipts. As a by-product, Hollywood also creates the multi-million- dollar salaries that give its executives and stars their political sinews, allowing them to distribute millions of dollars in campaign funds to favoured politicians.

The equation is simple: Hollywood looks to Washington for kudos, that reassuring sense of being close to the centre of power at last; Washington looks to Hollywood for cash. No one is more aware of this than Bill Clinton; when he passed the hat around in the last election, Ovitz was one of the key people to whom he turned.

Tracing the power structure in LA is like staring into a prism. Lines of influence and patronage fly out in different directions. LA sees itself as the capital city of the Pacific Rim, with the biggest container port in the US. Yet many of its largest institutions - the fast-slimming defence and aerospace companies such as Northrop, Lockheed and Hughes Aircraft - also look eastwards to their clients in the Pentagon and Capitol Hill. Others look 400 miles north, to Sacramento, the state capital. And others still, like the still influential Los Angeles Times, focus on the city, but glance in all three directions.

In the end, LA is a society made up of many dukedoms, but no king. Power is scattered around the metropolis. There is no central focus. And, in a place that is the second largest Mexican, Filipino, Korean, Salvadoran and Guatemalan city in the world, the chances of that changing are small.

(Photographs omitted)

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