Padilla Will Pay Penalty for Breaches

In a record settlement, Los Angeles City Council President Alex Padilla has agreed to pay $2,500 in fines and repay the city $76,821 in matching funds after the city Ethics Commission found he exceeded spending and contribution limits in his 1999 election, officials said Monday.

Padilla issued an apology to his colleagues and constituents Monday.

His campaign committee received the city matching funds in exchange for agreeing to limit spending to $275,000 in the June 1999 runoff election, but a commission audit found he exceeded the limit by $54,738.

Padilla knew at some point that he was exceeding the spending limits by choosing to pay campaign-related bills that came in after the runoff election, according to David Gershwin, one of his aides. Gershwin said Padilla faced the dilemma of making good on paying the bills and exceeding the spending limit or staying within the limit and “stiffing vendors.”

This is the third time the Ethics Commission has levied fines involving Padilla’s 1999 election. In 1999, the commission fined the political arm of the Los Angeles County Federation of Labor $2,000 for failing to properly disclose $31,000 it spent on an independent campaign supporting Padilla’s election. In 2000, the commission fined cable firm MediaOne for excessive campaign contributions to candidates, including Padilla, in the election the year before.

LeeAnn Pelham, executive director of the ethics panel, said that if it is approved by the commission Thursday, the agreement with Padilla would be the largest payment made in a settlement since the commission was created.

Pelham and Padilla signed the proposed stipulated agreement, which stated that his campaign “significantly exceeded” the spending limit and has agreed to pay back all $76,821 in city matching funds.

The $2,500 fine is for accepting two campaign contributions in excess of a $500 limit. The commission cited contributions from Kam Hekmat and his company, a commercial building management firm called Indivest, and city parks Commissioner Christopher Pak and his firm, Archeon International Group, an architectural firm.

Padilla can pay the fines and restitution by raising political contributions, said Pelham, who declined to comment further until the commission votes on the stipulation.

Padilla said invoices for services that were submitted after the election pushed his campaign over the spending limits.

“It was not my intent or the intent of my campaign to exceed the spending cap,” he said Monday. “Exceeding the spending cap . . . was a mistake on my part and on the part of my 1999 campaign committee.”

An attorney for Padilla, Fred Woocher, said he believes the amount of excessive spending is closer to $27,000 because some spending identified by the Ethics Commission was for noncampaign expenses such as his inauguration and setting up his council office.

Padilla won the 1999 runoff election with 67% of the vote against health agency administrator Corinne Sanchez, who spent $126,574 in the race.

If Padilla had exceeded the spending limit before the election, the cap would have been lifted for Sanchez, potentially lessening the advantage Padilla enjoyed.

Sanchez welcomed the enforcement but said she did not believe the excessive spending altered the outcome of her race.

Steve Gray-Barkan, her campaign manager in 1999, agreed.

“It was not a close election, so I don’t think it had an effect on the outcome of who won,” Gray-Barkan said of Padilla’s excessive spending. “But the spending limits are certainly set up for a reason, to ensure a level playing field, and they should be enforced by the Ethics Commission.”