Ethics Probes Focus on Campaign Fund Raising : Inquiry: Former Councilman Snyder, L.A. Marathon employees apparently are targets of investigations.

State and local agencies are investigating two suspected campaign money-laundering networks in Los Angeles that may have illegally funneled tens of thousands of dollars to state and local politicians, The Times has learned.

The inquiries appear to focus on former City Councilman Arthur K. Snyder, now a leading City Hall lobbyist, and on employees at a politically connected firm with a multimillion-dollar city contract to stage the annual Los Angeles Marathon, court records show.

Court documents allege that a onetime top official of the marathon persuaded at least two people to contribute to political candidates and reimbursed them for their contributions--a practice prohibited by state and city laws. An attorney for Snyder said his client “apparently . . . is a target” in a similar money-laundering investigation.

The full dimensions of the money-laundering investigations by the state Fair Political Practices Commission and the Los Angeles City Ethics Commission are not clear. But court records and more than a dozen subpoenas issued in recent weeks hint at an ambitious investigation that seeks to penetrate the innermost workings of political fund raising in the city.

Snyder’s attorney said his client has done nothing wrong and knows no details of the investigations.

William A. Burke, president of the Los Angeles Marathon, said he believes the investigation involves one of his former assistants. He dismissed it as “typical bureaucratic stuff with no real basis in fact.”

According to court documents, records are being sought that involve dozens of individuals and corporations that have poured hundreds of thousands of dollars into the campaigns of state and local candidates in the last several years. One subpoena issued to Snyder’s law firm seeks documents relating to contributions from his firm and others to 19 state and local candidates.

In court documents related to employees of the Los Angeles Marathon, the FPPC said, “Suspected laundered contributions went to numerous candidates for elective office, including seven candidates for Los Angeles City Council, the mayor of Los Angeles and the mayor of Oakland.”

Aside from Mayor Tom Bradley and Oakland Mayor Elihu Harris, the documents name as recipients of the allegedly laundered contributions City Council members Richard Alatorre, Rita Walters, Nate Holden and Ruth Galanter and several unsuccessful council candidates. State Controller Gray Davis also was named as a recipient of the funds.

There is no indication in the documents that elected officials knew they were receiving allegedly illegal contributions.

FPPC spokeswoman Carol Thorpe declined to discuss the inquiries, which began last spring and seek records dating back three years. Benjamin Bycel, executive director of the city Ethics Commission, said he could not comment “on the specifics of any investigation.” But he added: “The Ethics Commission and the FPPC have for a number of months been conducting an investigation into alleged campaign money-laundering schemes in the city of Los Angeles.”

Political money-laundering involves efforts to sidestep campaign reform laws or contribution limits by concealing the true source of a donations to a candidate. Typically, a large donor or fund-raiser enlists employees, associates or relatives to make contributions to favored candidates and reimburses the contributors.

Although the recipients may not know the true source of the money, they often are aware that the fund-raiser was responsible for soliciting a large number of contributions. Many believe this can boost the fund-raiser’s political influence.

The practice, punishable by fines or criminal charges, has been on the rise, campaign experts say. That is in part because strict new contribution limits in many jurisdictions have made it more difficult for big donors to contribute large sums to politicians. Los Angeles, for example, limits contributions from a single source to $500 to each candidate in City Council races and $1,000 for mayoral and other citywide contests.

“We are seeing more and bigger money-laundering cases,” Thorpe said. She cited a recent criminal prosecution in a large Riverside case and a $187,000 fine levied two years ago against Ken Orduna, an unsuccessful Los Angeles City Council candidate.

The Los Angeles investigations came to light in lawsuits that seek to quash or limit FPPC subpoenas for financial records. The suits were filed by Snyder, his wife and several associates, as well as a former top official with the Los Angeles Marathon. The suits charge that the subpoenas seek too much information and are an invasion of privacy.

Snyder, a colorful and often controversial fixture at City Hall, has built a premier local lobbying business since 1985, when he left the City Council after representing the Eastside for 18 years. A consummate insider, he is regularly seen navigating City Hall’s marble hallways, buttonholing council members, chatting up bureaucrats and pitching his clients’ needs at public hearings. He has represented a wide variety of clients, ranging from major developers to a cab company and a police tow truck operator.

Information on the investigation involving Snyder’s firm is sketchy, although documents filed by Snyder’s attorney state that it involves “an investigation of possible laundering of political contributions.”

One subpoena served on Snyder’s law firm seeks records involving payments from the firm to 25 individuals and three corporations. Those individuals and corporations have made tens of thousands of dollars in contributions to state and local elected officials in recent years, records show.

The records indicate that some of those identified in the subpoena are present or former employees or clients of Snyder’s law firm. Several other subpoenas seek bank records involving Snyder’s companies or checking accounts for his employees or associates.

Several of the other contributors identified in the subpoena have employers or home addresses in common, campaign contribution records show.

In an interview, Snyder’s attorney, James R. Sutton, said some of those named are relatives of Snyder’s wife. Sutton said he had been told by the FPPC that the investigation involved suspected money laundering, but added, “We have no idea what they are after.

“Certainly, Art Snyder and his relatives and colleagues have done nothing wrong,” he said.

Snyder has been a fund-raiser who helps fill tables at political dinners, Sutton said. “That’s what Art does,” he said. But Sutton scoffed at the notion that Snyder would need to launder money to gain influence at City Hall.

“The man was a colleague of these people,” he said. “He’s personal friends with several of them. Why in the world would he be worried about increasing his access to them?”

In the inquiry related to Los Angeles Marathon employees, investigators have taken sworn statements from two workers, Patricia Harris and Lauren Sokoloff, who allege that Burke’s former assistant, George A. Beasley, had used them since 1989 to launder as many as 42 campaign contributions totaling about $21,000, records show.

Harris, the marathon’s promotions director, and Sokoloff, executive assistant to marathon President Burke, told investigators that Beasley repeatedly asked them to write contribution checks to various candidates and reimbursed them from a personal account or an account for his firm, Beasley Business Inc., records show.

Harris and Sokoloff declined to comment. Beasley also declined to comment and referred questions to his attorney, who could not be reached.

Burke said Beasley left the marathon two or three years ago but still has contracts with the marathon and is “in and out of the office all the time.”

Burke said it does not appear that he or the Los Angeles Marathon is under investigation, but he added, “I assume I’m part of the target. . . . I can only speak for myself. I have not reimbursed anybody (for campaign contributions), nor have I caused anybody to be reimbursed.”

Harris and Sokoloff told investigators that they believed other employees also wrote political contribution checks at Beasley’s request, and they alleged that they were told to lie to FPPC investigators to cover up the money laundering.

The cover-up was urged by someone identified in court papers only as “an individual at Los Angeles Marathon,” records show.

The individual told the employees to deny that they were reimbursed for the contributions, records show, and instead maintain that they received payments from Beasley for outside work. The individual allegedly assured Harris and Sokoloff that investigators would never “link the reimbursements” if they stuck with the story.

Sokoloff told investigators she “stupidly” went along with the cover-up scheme at first but later agreed, with Harris, to tell the truth.

“We would look like idiots trying to say something like that when it doesn’t make sense,” Harris told investigators.

Burke said he has no idea who allegedly told the two employees to lie to investigators. He said he talked to Harris and Sokoloff after they received subpoenas, but told them to tell the truth.

Questions of special political influence have surrounded the multimillion-dollar Los Angeles Marathon since Burke’s firm won the contract in 1986. Competitors said that he landed the deal, after being ranked behind two other bidders, because of his political contacts.

There is nothing in the court documents that ties the contract to the allegations of money laundering.

Burke, a friend of many at City Hall, once worked in the state Legislature under Assembly Speaker Jesse Unruh and later moved to Los Angeles as a deputy to former Councilman Billy Mills.

He is married to former U.S. Rep. Yvonne Brathwaite Burke, who is a candidate for Los Angeles County supervisor.

William Burke is credited with building the marathon into a marketing marvel that has attracted major corporate sponsors including Mercedes-Benz, AT&T; and the Los Angeles Times, even as some runners’ groups have bemoaned the commercialism.

Burke said the current investigation is “probably politically inspired,” but declined to elaborate. He noted that he had been investigated on various allegations before, “none of which have ever resulted in even a fine.”

He said the current investigation will go “the same place all the others went.”

How Campaign Money Is Laundered

State and local investigators are probing alleged campaign money-laundering schemes in Los Angeles. Here is how a typical network operates, according to investigators and campaign law experts. Source of funds:

The actual source of campaign contributions is often a contractor, developer or special interest group, or their representatives. The launderer builds access to elected officials and gains influence by bringing in large sums to campaigns. Go-between donors:

Multiple contributors--employees, friends, relatives--are enlisted to make donations to favored candidates. These contributors are then reimbursed by the actual source in cash or payments disguised as bonuses, expenses or commissions. This step avoids legal contribution limits, such as the $500 limit in Los Angeles City Council races. Also, spreading money around minimizes the appearance of special-interest money in a campaign. Candidate:

The candidate publicly reports the go-betweens as the contributors, and the actual source of the money is never disclosed. The candidate may not be aware laundering is occurring, but probably knows the actual source is an important fund raising player who helped fill the candidate’s campaign coffers.

Suspect Contributions

Patricia Harris and Lauren Sokoloff, two employees of a firm with a multimillion-dollar city contract to stage the Los Angeles Marathon, told investigators in sworn statements that they had been used more than 40 times since 1989 to launder nearly $21,000 in contributions, records show. No evidence has has been made public that candidates knew the donations were illegal.

Here is a look at some of the allegedly laundered donations: Patricia Harris, director of promotions for the Los Angeles Marathon

2/21/91 Council candidate Brad Pye: $500

2/28/91 Councilman Richard Alatorre: $500

5/13/91 Council candidate Bob Gay: $500

5/14/91 Councilwoman Rita Walters: $500

5/31/91 Council candidate Sharon Lowe: $500

6/18/91 Councilman Nate Holden: $500

8/2/91 Council candidate Sharon Lowe: $500 Lauren Sokoloff, executive assistant to marathon president.

2/1/91 Council candidate Brad Pye: $500

2/28/91 Councilman Richard Alatorre: $500

4/1/91 Councilwoman Ruth Galanter: $500

5/13/91 Council candidate Robert Gay: $500

5/14/91 Councilwoman Rita Walters: $500

5/31/91 Council candidate Sharon Lowe: $500

6/18/91 Councilman Nate Holden: $500

8/2/91 Council candidate Sharon Lowe: $500