An upscale hotel in Santa Monica has agreed to a $310,000 fine for laundering donations to City Council candidates and committees in hopes of thwarting the expansion of a competing hotel, records show.
The Huntley Hotel concealed 62 campaign contributions — totaling $97,350 — to anti-development committees and political candidates thought likely to oppose the contentious expansion of the Fairmont Miramar Hotel, according to the Fair Political Practices Commission's enforcement division.
State officials believe the proposed fine, which comes after a two-year investigation, is the second-largest in the agency's history.
In 2012, the Fairmont, a luxury oceanfront hotel that sits directly in front of the Huntley, was pursuing a significant expansion that involved building private condos and three new buildings, including a 21-story high-rise tower.
The Huntley, along with residents and businesses in the area, opposed the expansion, worrying that it would snarl traffic and block sunlight and views.
According to the commission's records, the Huntley selected its assistant general manager, Manju Raman, to fundraise and help organize the community's opposition to the Fairmont's expansion.
Raman said she had no experience in campaign contributions and was not personally familiar with campaign finance rules, FPPC records said. When she fell short of her assigned goals, she offered to reimburse hotel employees and their spouses if they wrote checks to the candidates.
That year, the hotel reimbursed 44 contributors who donated $86,650 to Santa Monicans for Responsible Growth and City Council candidates.
The Political Reform Act prohibits contributors from donating to campaigns in the name of another person.
"Making a campaign contribution in the name of another is one of the most serious violations" of the Political Reform Act, the FPPC said. "It deceives the public as to the true source of contributions, and as occurred with certain of the contributions in this case, it allows for the circumvention of local contribution limits."
The Huntley's donations went to two candidates — Ted Winterer and Richard McKinnon — who ran on slow-growth platforms, as well as two incumbents Terry O'Day and Gleam Davis, the commission's records show.
Winterer, now the city's mayor, was elected to the council in 2012, along with Davis and O'Day. McKinnon, unsuccessful in his bid for City Council, is serving his second term on the city's Planning Commission.
O'Day told The Times he was "really pleased" with the state's action and was unaware that certain donations to his campaign came from the hotel.
"This was wrongdoing by a group of funders," he said. "We, as elected officials and as a city body, have long invested in transparency and clean campaigns in Santa Monica with accountability, and so this action, I hope, restores the sense of faith in government."
O'Day said he doesn't consider himself a "slow-growth" politician. He said he's "open to the [Fairmont] hotel having a right to renovate the property" to remain competitive.
The hotel, he said, has scaled back its expansion proposal since it was first submitted because of community input.
Winterer, Davis and McKinnon were not immediately available for comment.
During the next local election, the Huntley again improperly reimbursed people for their campaign contributions.
In a related campaign finance investigation, a law firm and an Encino Pilates studio face a $10,000 fine for failing to disclose original contributor information.
In 2012, the law firm, Richardson Patel, donated $10,000 to the anti-growth committee in Santa Monica in the name of Pure Pilates without disclosing that the true donor was the Huntley, FPPC records show. Neither the firm nor the studio was immediately available for comment.
Sohrab Sassounian, president of the Huntley, could not immediately be reached for comment.
A woman who answered the phone at Sassounian's home questioned why The Times was interested in publishing a story on a minor violation, noting that he had already paid the fine.
"He didn't kill somebody," the woman said.
The commission will consider whether to accept the fine at a meeting later this month. The hotel, state officials said, has already written a check.