Details of Illegal Donations Revealed : Inquiry: Authorities describe shipping firm’s elaborate scheme to funnel $170,000 to California politicians. Company was ordered to pay record fine.

With the approval Tuesday of a record $895,000 penalty for campaign violations by a major shipping firm, state and local investigators pulled the cover off what they describe as an elaborate scheme to funnel more than $170,000 in illegal donations to California politicians since 1989.

In one 10-month period in 1990-91, more than $50,000 was improperly channeled to Los Angeles City Council members and other local candidates, officials said. Tens of thousands more were secretly directed to state candidates, including Gov. Pete Wilson and his 1990 Democratic challenger Dianne Feinstein, now a U.S. senator.

Spokesmen for Wilson and Feinstein said the officials had no inkling of improper donations from Evergreen, although Wilson will return the $4,000 the firm directed to him, an aide said.

The settlement with Evergreen America Corp., the U.S. arm of a giant, Taiwan-based container ship operator, is the largest such fine in U.S. history. It stems from a series of campaign money-laundering investigations being conducted jointly by the state Fair Political Practices Commission and the Los Angeles City Ethics Commission.

Although officials have not alleged that politicians knew the donations were illegal, investigators and government ethics experts say money laundering corrodes the political process, both by exceeding legal contribution limits and by boosting the importance of lobbyists or other special interests who help bring in large numbers of campaign checks--both legal and illicit.

“The candidate doesn’t need to see anything wrong,” FPPC investigator Richard McSherry said. “The candidate sees the person who raised $10,000, the person with a Golden Rolodex” of campaign check writers “and is quite grateful.”

Investigators are not saying who they believe is the key “Golden Rolodex” figure in the Evergreen case.

But the case evidently is an offshoot of a complex, ongoing investigation centering on former Los Angeles Councilman Arthur K. Snyder, now a prominent City Hall lobbyist and fund-raiser.

FPPC and Ethics Commission officials stressed that their investigations are continuing, and all declined to comment on Snyder, who has not been charged with wrongdoing and denies any involvement in money laundering.

But records released by authorities Tuesday indicate that Snyder is listed in candidates’ campaign reports as an intermediary for about 20 of the contributions Evergreen acknowledges were laundered.

Also, William Wang, a local executive for Taiwan-based Evergreen, who records show figured prominently in the laundering scheme, is the brother-in-law of Snyder’s wife. Within Evergreen, it was Wang who authorized reimbursements for the contributions made by employees, relatives, friends and other associates, records show.

The Ethics Commission stated in documents that it has evidence that Snyder’s wife, Delia Wu Snyder, and other Snyder relatives and employees were involved in laundering Evergreen money.

Delia Snyder and her attorney could not be reached for comment Tuesday.

Blanche Wu, Delia’s sister, and Chi May Chen, the comptroller of Snyder’s law firm, were identified in documents Tuesday as alleged middlemen in the laundering scheme.

Wu’s attorney declined to comment. An attorney for Chen denied that her client had acted improperly.

Officials say the laundered contributions were made during a period when an Evergreen-related firm, Mangrove Estates, was seeking approvals for a massive commercial development in the Little Tokyo area.

Records show Snyder has represented Mangrove Estates at City Hall and the developer is a Netherlands corporation headed by William Wang. One map in the files refers to the project as “Evergreen L.A.”

The 2.7-million-square-foot project, now wending its way through the bureaucracy, would include offices, condominiums and shops a few blocks east of City Hall, at 1st and Alameda streets.

Wang and his attorney could not be reached for comment. The settlement indicate that Wang will not be the target of any further civil probe by the ethics commission or the FPPC.

Snyder’s attorney, Mark J. Geragos, said Tuesday that investigators “are trying to implicate (Snyder) by insinuation, but there is no evidence” he participated in any illegal conduct.

“They’ve been seeking Art all throughout the investigation; that’s no secret,” he said, adding that there is no connection between Snyder’s role in the Mangrove Estates project and the laundering activities by Evergreen.

“I’m denying that has anything to do with it,” Geragos said. “That’s only thrown in there so they can somehow make an attenuated connection to Snyder.

“It doesn’t make sense,” he said, adding that many of the laundered contributions went to state officials who have no authority over a city development.

As for the commission’s allegations that Snyder’s wife was involved in laundering, Geragos said he was not representing her and could not speak for her, but “we obviously are distressed that Delia and her family have been implicated in all of this.”

Mark Beck, an attorney for Evergreen, which received praise from state and local officials for its cooperation in the investigations, said employees of the firm were not seeking special political influence through the laundered funds.

“Mistakes in judgment were made years ago and were repeated many times,” he said. “My understanding is the company received bad advice” regarding state and local campaign laws and how best to participate in the political process.

He refused to identify who had offered the company that advice, saying he believed the continuing “investigation will answer that.”

He said an internal company investigation of the incident has been completed and disciplinary action is being considered against some employees, but he refused to elaborate. William Wang is on a leave of absence, he said.

Present and former city officials said Tuesday that they had no idea illegal money was being pumped into their coffers and denied that contributions influence their decisions.

Councilman Hal Bernson, who records show received $10,000 in laundered Evergreen funds in 1991, said: “If it occurred, it was without our knowledge.”

Bernson said that Snyder was on his finance committee in 1991. “I knew he was out raising money for us,” Bernson said. He said he understood that Evergreen had ties to Snyder, possibly as a client.

Former Councilman Joan Milke Flores, who records indicate received $17,500 in laundered Evergreen funds for her unsuccessful campaign for secretary of state, said she knew Snyder had at various times helped collect contributions from Evergreen.

Councilwoman Ruth Galanter, who is reported to have received $7,500 in laundered funds, said she had no way of knowing which contributions might be improper.

The FPPC and the city will each receive $447,500 of the settlement, the first sizable penalty recovered by the city’s 2-year-old ethics watchdog agency.

Ethics Commissioner William Mills Jr., a former City Council candidate, abstained from participating in the approval of the settlement. Records showed he had received a laundered $500 contribution from Evergreen to his campaign. Mills said he was unaware the contribution was tainted.

“This is a practice that is widespread and that we are trying to eradicate,” Ethics Commission President Dennis Curtis told reporters Tuesday.

FPPC Chairman Ben Davidian said: “Campaign money laundering . . . denies the voters vital information about the true source of campaign contributions and thereby undermines our political process.”

How the Scheme Worked The campaign money laundering settlement approved Tuesday by the Los Angeles Ethics Commission with Evergreen America is the largest penalty of its kind in U.S. history.

Altogether, Evergreen acknowledged improperly funneling more than $172,000 to more than 20 state and local candidates--inclduing $51,500 to city candidates since 1990, officials said.

Officials say the case, part of a series of on-going money laundering probes by state and local authorities in Los Angeles, shows how large contributors illegally seek to conceal the true source of political donations in violation of contribution limits and public disclosure laws.

Evergreen American Corp. Taiwan-based group of companies that includes world’s largest container shipping fleet with large facility in Port of Los Angeles and an international airlines operating from LAX. Also, an Evergreen-related firm has large hotel development planned in Little Tokyo.

PRIMARY “MIDDLEMEN:”

Allegedly took Evergreen campaign contribution funds and distributed directly to candidates, as well as through larger groups of Evergreen employees, friends and relatives.

Among primary middlemen were:

William Wang, vice chairman of Evergreen America.

Delia Wu Snyder, brother-in-law of William Wang and wife of former Councilman Arthur Snyder, lobbyist and fundraiser who is focus of on-going money laundering probe.

Blanche Wu, wife of William Wang and sister of Delia Wu Snyder.

Chi May Chen, comptroller of Snyder’s Los Angeles law firm.

Secondary middlemen Dozens of co-workers, friends and relatives allegedly recruited to make contributions to state and local candidates in their own names, who are then secretly reimbursed.

The Candidates Candidates may not realize funds are donated illegally, officials say, but money laundering corrupts the political process by hiding the true influence of special interests that help arrange and “bundle” contributions.

THE LAW:

In Los Angeles, no one may legally contribute more than $500 per election to a City Council candidate and more than $1,000 to a ctiywide candidates, such as mayor. State and local laws also require that true source of all donations be fully disclosed in public records. Violations can lead to civil penalties, and in some cases criminal prosecutions.