Hahn Donor Discussed Work for City

A prominent Los Angeles attorney charged with making illegal contributions to the 2001 mayoral campaign of then-City Atty. James K. Hahn was discussing potential legal business with the city at the time, according to documents obtained by The Times.

In February 2001, Pierce O’Donnell wrote Hahn, urging the city to join in a legal effort to recoup billions of dollars from natural-gas suppliers who had allegedly overcharged Los Angeles and others during the energy crisis.

Within weeks of that Feb. 23, 2001, letter, Hahn’s office decided to file a lawsuit and join other plaintiffs in the coordinated legal effort, which eventually generated millions of dollars for the city and for O’Donnell’s firm and other firms handling the cases.

The letter from O’Donnell to Hahn was provided to The Times this week by the campaign of mayoral candidate Antonio Villaraigosa and later verified by the city attorney’s office.

In that letter, O’Donnell also referred to a conversation he and Hahn had a day earlier about the potential lawsuit. A Hahn spokeswoman said the mayor did not recall the discussion.

On the day O’Donnell said his conversation with Hahn occurred, he wrote $9,000 worth of checks to employees, allegedly to cover donations to Hahn’s mayoral campaign, according to a formal accusation filed against O’Donnell by the California Fair Political Practices Commission.

He is now being prosecuted by the Los Angeles County district attorney’s office on misdemeanor charges of making a total of $25,500 in illegal contributions to Hahn’s 2001 campaign.

O’Donnell, who was one of Hahn’s biggest supporters in 2001, has consistently denied any wrongdoing. And on Wednesday, O’Donnell’s attorney said there was no connection between O’Donnell’s work with the city and his political support of Hahn.

A Hahn campaign spokesman said Hahn decided as city attorney to sue El Paso Energy and other natural-gas companies for price-gouging during the energy crisis only because it would benefit city residents.

“The most important thing is that the city of Los Angeles got the opportunity to get some justice,” said Kam Kuwata, citing a settlement with El Paso that the city attorney’s office expects to bring about $16 million to the city.

The letter emerged less than two weeks after Villaraigosa returned $47,000 in donations from employees of two Florida companies and their relatives.

On Sept. 27, 2004, Villaraigosa had dinner with Sean Anderson, the president of Travel Traders, one of the Florida companies, and Art M. Gastelum, a lobbyist who represents Los Angeles International Airport concessionaires. Villaraigosa said they did not talk about the airport.

The day after Anderson dined with Villaraigosa, employees of S.E. Florida Investments, which is affiliated with Anderson’s firm, contributed $10,000 to Villaraigosa. Their relatives gave $3,000.

Villaraigosa collected an additional $34,000 for his mayoral campaign from employees of Travel Traders and S.E. Florida Investments and their relatives.

Los Angeles County Dist. Atty. Steve Cooley opened a preliminary inquiry April 29 into whether the $47,000 had been laundered.

The rivals have battered each other in television advertising and on the campaign trail over the integrity of their fundraising.

Local and federal prosecutors have for more than a year been investigating alleged links between political contributions and city contracts in the Hahn administration. And Westside developer Mark Abrams has been fined a record $270,000 by the city’s Ethics Commission for laundering contributions to Hahn and other candidates.

O’Donnell was working on lawsuits against energy companies when he urged Hahn in February 2001 to join Long Beach and other plaintiffs to recover money from El Paso, Sempra Energy and other companies that they contended had manipulated the natural-gas market.”As we also discussed, a similar action should be taken by the city of Los Angeles,” O’Donnell wrote Hahn before asking him to set up a meeting to discuss the case.

O’Donnell concluded by writing: “We are excited about the prospect of working with the city of Los Angeles to expose this outrageous combination of restraint of trade and to obtain substantial monetary reparations for consumers and the city of Los Angeles itself.”

At the same time that O’Donnell was talking to Hahn, he was writing checks to his employees to cover their contributions to Hahn’s mayoral campaign, according to the state Fair Political Practices Commission accusation filed last year.

O’Donnell on Feb. 21, 2001, wrote $4,500 worth of checks to employees to cover contributions from them and their spouses, the accusation alleges.

The next day, he wrote $9,000 worth of checks to employees, according to the commission’s accusation.

Earlier, on May 23, 2000, he allegedly wrote $12,000 worth of checks to cover other contributions to Hahn. All the recipients of checks from O’Donnell later sent their own checks to the Hahn campaign. City campaign finance laws prohibit individuals from contributing more than $1,000 to a candidate in any election period.

Later in the 2001 race that also pitted Hahn against Villaraigosa, O’Donnell spent $25,000 on an independent mailer to support the Hahn campaign that warned: “Antonio Villaraigosa is Dangerous and Must Be Defeated.” Independent expenditures, which cannot be coordinated with the campaign, are not subject to the $1,000 limit.

The state Fair Political Practices Commission case is still open. So is a similar case before the city’s Ethics Commission, as well as the criminal case filed by the district attorney.

O’Donnell’s attorneys are trying to get the criminal case dismissed, arguing that prosecutors erred because state laws do not apply to O’Donnell’s case.

After O’Donnell talked with Hahn in February 2001, the city hired another firm that worked with O’Donnell.

But court documents, city records and interviews with sources familiar with the city’s case show that O’Donnell’s firm, O’Donnell & Shaeffer, took a lead role in pursuing the lawsuits on behalf of plaintiffs, including Los Angeles.

On March 1, 2001, a week after O’Donnell said he spoke to Hahn, the city attorney and several deputies drove to the downtown offices of O’Donnell’s firm to discuss the case, Hahn confirmed through a spokeswoman.

One of Hahn’s special assistants on March 16 asked the City Council to schedule a closed-session meeting to discuss filing a lawsuit against the natural-gas companies. On March 20, the council voted to sue El Paso and other energy companies.

The council authorized the hiring of a different law firm -- Engstrom Lipscomb and Lack -- to represent the city.

But O’Donnell’s attorney, George O’Connell, said Wednesday that, from the beginning, it was understood that O’Donnell & Shaeffer would work with Engstrom Lipscomb & Lack and three other firms to represent Los Angeles and the other plaintiffs and ultimately share in any settlement.

And when the portion of the case against El Paso was settled in 2003 for more than $1 billion, O’Donnell & Shaeffer was among five firms that earned millions of dollars for their work on the case.