BUSINESS

China's Wanda Group accused of funneling foreign money into Beverly Hills ballot measure

A labor union representing hotel workers filed a complaint Thursday calling on state and federal election officials to investigate the potential illegal use of foreign money in a heated Beverly Hills ballot measure that has pitted the owner of the Beverly Hilton against a builder controlled by the richest man in China.

Unite Here Local 11, the Southern California chapter of a labor union that represents 270,000 workers across North America, accuses China’s Wanda Group of funneling cash to a campaign committee established by one of its U.S. subsidiaries to oppose an initiative in the November election.

The ballot measure would allow real estate investor Beny Alagem, owner of the landmark and union-friendly Beverly Hilton, to bypass the usual public review to build a 26-story high-rise that would be the tallest building in a city averse to big developments.

Opposing the measure is Wanda’s local subsidiary and its development partner, the Phoenix-based Athens Group. The two are building a $1.2-billion hotel-condominium project called One Beverly Hills adjacent to Alagem’s property on the corner of Wilshire and Santa Monica boulevards.

Wanda and Athens formed an exploratory committee to fight Alagem’s ballot measure. It receives major funding from Lakeshore East Parcel P LLC, a Wanda entity behind a $1-billion hotel-condominium project in Chicago.

Lakeshore East had no reason to get involved in the Beverly Hills ballot measure — except for as a proxy for the China-based Wanda Group, union attorney Gary Scott Winuk alleged in a letter to the California Fair Political Practices Commission. 

Representatives for Lakeshore East could not be reached for comment.

A spokesman for Wanda dismissed the complaint, which they have not yet seen.

“This is a campaign fully funded and controlled by American interests with no foreign control or money in any way, shape or form,” said Adam Englander, calling it an unethical attempt to bully those who oppose the Alagem initiative. 

A spokeswoman for Alagem’s ballot measure said her camp had no prior knowledge of the union’s complaint.

"Hotel workers have fought to ensure good jobs at the Beverly Hilton and other area hotels,” said Rachel Torres, a research analyst at Unite Here Local 11. “We do not want to see illegal foreign contributions from a company that has no such history and has made no such commitment attempt to take away our quality jobs and undermine our standard."

Federal and state law prohibits foreign donors from making political contributions. Subsidiaries of foreign companies are allowed to make donations, though not if they’re under the direction of the parent company. 

Last year, the California Fair Political Practices Commission fined opponents of a Los Angeles ballot measure that required performers in adult films to wear condoms for not disclosing major donations from foreign interests.

“My sense is there is enough to ask for an investigation,” said Jessica Levinson, a Loyola Law School professor who specializes in election law who read the complaint. “But you need a money trail, almost a forensic accounting, or an admission” to prove wrongdoing.

The complaint is the latest salvo in an increasingly tense dispute between the two developers, which share one of the most sought after parcels of land in Beverly Hills.

In addition to his proposed 26-story tower, Alagem is building a public park and a Waldorf Astoria hotel.

Meanwhile, Wanda’s project to the west on the site of a former Robinsons-May store, plans to add 193 luxury condos and a 134-room hotel.

While the two builders appear to be in direct competition, a study commissioned by Wanda found demand for hotel rooms in Beverly Hills was strong enough to accommodate both projects.

Alagem, an Israeli-American who founded Packard Bell Electronics in 1986, has spent more than $3 million organizing and promoting the ballot measure, according to city records.

Wanda’s campaign committee has not filed any finance reports.

Some city leaders have taken sides, including Mayor John Mirisch, who has raised hackles for his public support of Wanda.

In another controversy, former Beverly Hills mayor Barry Brucker was accused of illegally lobbying for Wanda. Bruckner voted to approve construction on the Chinese company’s site in 2008 when it was under different ownership. The city prohibits former elected officials from lobbying for projects they voted on while in office.

Brucker said he had not lobbied Beverly Hills officials but resigned his Wanda post in July “out of an abundance of caution.”

Wanda’s foray into Beverly Hills is part of a larger push by the company to establish itself as one of China’s first globally recognized brands.

The real estate and entertainment giant run by China’s richest man, Wang Jianlin, is building the third-tallest building in Chicago and has developments in London, Madrid and Sydney.

The company also owns AMC theaters and Burbank studio Legendary Entertainment.

Wang is an army veteran who fashioned an improbable rise as a pioneer of China’s private real estate market in the late 1980s. Known for his outsized ambition, he raised eyebrows this year by taking a swing at the Walt Disney Co. and its theme park in Shanghai.

“The frenzy of Mickey Mouse and Donald Duck and the era of blindly following them has passed,” Wang said on state-run TV while discussing plans to build a network of rival theme parks in his home country.

Wang’s success as a private entrepreneur is remarkable in a country where the scales are tipped in favor of state-owned companies. The billionaire has long held that he does not pay bribes to officials. However, a New York Times investigation in 2015 detailed a murky web of financial ties between Wanda and China’s political elite.  

 

david.pierson@latimes.com

Follow me @dhpierson on Twitter

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