A Sharp Eye for City Hall : L.A. ethics panel, with state agency, unearths campaign money laundering

City and state political watchdog agencies joined forces in an investigation that led to a record $895,000 fine for campaign money laundering, the largest penalty of its kind in U.S. history. While California and Los Angeles can hardly be proud that its politicians--however unknowingly--were the recipients of such donations, the state and the city can be proud that the state Fair Political Practices Commission and the Los Angeles City Ethics Commission exposed the intricate scam.

Fined was Evergreen America Corp., the U.S. arm of a Taiwan-based company that operates the world’s largest container shipping fleet and a large facility in the Port of Los Angeles. It admitted in a civil settlement that it had improperly laundered more than $170,000 given to more than 20 state and local candidates, including Gov. Pete Wilson, Atty. Gen. Dan Lungren, Sen. Dianne Feinstein (when she ran for governor) and Secretary of State March Fong Eu. In 1990-91 more than $50,000 went to Los Angeles city candidates, including members of the City Council. No evidence has surfaced that politicians knew they were receiving allegedly illegal contributions.

Still, this case shows how large contributors can seek to conceal the true source of donations in violation of contribution limits and public disclosure laws. It appears to be related to a larger, ongoing probe that centers on former Los Angeles City Councilman Arthur K. Snyder, one of City Hall’s most prominent lobbyists and fund-raisers. Among those alleged to be key middlemen in the Evergreen contributions are William Wang, a company executive and the brother-in-law of Snyder’s wife; Snyder’s wife; his sister-in-law, and the comptroller of his L.A. law firm. Snyder’s attorney says that nothing disclosed has implicated Snyder in wrongdoing.

Investigations are continuing, and Ethics Commission President Dennis Curtis said one thing already is clear: Political money laundering “is a practice that is widespread.” This is one reason Los Angeles voters strongly supported ethics reform in 1990. In recovering its first major penalty, the Ethics Commission has brought a much-needed pair of eagle eyes to City Hall.