Alan Casden, one of the most successful real estate developers in Southern California, is the target of an investigation into the alleged laundering of campaign contributions to four politicians, including the Los Angeles city attorney and two members of the City Council, Dist. Atty. Steve Cooley said Monday.
Cooley named the developer as a target after a Los Angeles County Grand Jury indicted an executive in Casden's company and 13 of his subcontractors on charges of conspiring to hand out illegal campaign donations.
The district attorney described the indictment as part of a wider investigation into illegal campaign funding in Los Angeles.
The indictment, returned Friday but not announced publicly until Monday, had immediate political repercussions: Councilman Jack Weiss, one of the candidates who received the allegedly tainted contributions, announced that he would oppose Casden's plans to build a controversial, $100-million residential and commercial development in Westwood. Weiss, who represents the area, cited the indictments as a factor in his decision.
Casden, who denied any wrongdoing, fought back by charging, through a spokeswoman, that Cooley had "repeatedly asked" for campaign contributions from his company. Cooley said that was not true.
The contributions at the heart of the investigation went to Weiss, fellow council member Wendy Greuel, City Atty. Rocky Delgadillo and 2001 mayoral candidate Kathleen Connell. None of the four has been charged with any crimes, and Cooley said they are not considered targets of the investigation.
Those reached by The Times denied any wrongdoing.
The 14 defendants, who were arraigned Monday, all worked, directly or indirectly, for Casden, a politically connected developer who is on the Forbes 400 list of the wealthiest Americans, and was an unsuccessful bidder for the Los Angeles Dodgers earlier this year. They are accused of trying to get around campaign finance limits and hiding the true source of campaign money by soliciting dozens of relatively small contributions from people who would then be reimbursed for the donations.
Officials did not disclose the total amount of the contributions, but lumped together they exceeded the $1,000 campaign finance limit for individual contributions in citywide races to a candidate or campaign, or $500 in a City Council race.
The indictment charges that John Archibald, a vice president of Casden Properties, organized the efforts to raise illegal campaign contributions in 2000 and 2001. It also alleges that Archibald's actions were intended to curry favor with the officials on behalf of Casden Properties, LLC.
"Mr. Archibald is completely innocent of these charges and denies doing anything wrong with respect to any city election," said Robert Corbin, Archibald's lawyer.
Archibald, 54, and his co-defendants pleaded not guilty in a downtown courtroom before they were booked and released on their own recognizance. Los Angeles County Superior Court Judge Terry Green ordered them back to court on Jan. 7.
In a telephone interview late Monday from his reelection campaign headquarters, Cooley said Casden "and/or his corporation are certainly considered targets in this ongoing investigation."
He said Casden had been invited to appear before the grand jury, but did not. "This is a person used to manipulating the system," Cooley said. "What he's not used to is a tough D.A. enforcing the laws."
Casden, who has denied violating campaign finance limits in the past, issued a statement Monday saying: "We believe the indictment of one of our company's middle-management employees is unwarranted and that he will be proven innocent when all the facts are known."
Through a spokeswoman, he also charged that Cooley had repeatedly asked Casden Properties to raise money for his last election campaign. The spokeswoman said the company had turned down the requests. Casden did not return repeated telephone calls seeking further comment.
Cooley denied Casden's accusation, saying he had not asked the developer to contribute to his 2000 election campaign, and Casden had not contributed.
"I have never spoken to the man," he said. "I have never seen the man. I didn't know anything about the man til we commenced our investigation in this case."
Since taking office three years ago, Cooley has focused on political corruption as one of his top priorities. He created a new unit to target illegal actions by politicians and government officials and to enforce campaign, election and open meeting laws. The unit has won convictions against several politicians.
Cooley has been criticized for failing to take on big players and high-profile cases. Nonetheless, he faces what is expected to be an easy reelection bid in March.
In a written statement issued Monday, he called the indictment of Archibald and the subcontractors "another major step in our effort to assure the integrity of the elective process for public officials in the city of Los Angeles."
Casden is a major local political contributor who has developed or acquired about 90,000 apartment units, mostly in Southern California. Among his recent projects was a 1,300-unit luxury apartment complex in the Park La Brea area. Casden's company has been locked in a political battle over the $100-million Palazzo Westwood project, which is still awaiting city approval.
The project, involving 350 luxury apartments and more than 115,000 square feet of stores and restaurants on Weyburn Avenue, has drawn strong opposition from neighborhood groups. Many opponents have installed lawn signs urging Weiss to take a stand opposing the Casden project, which is in his district. They have charged that the development would worsen traffic and other problems.
In announcing his opposition to Palazzo Westwood on Monday, Weiss cited "insufficient community outreach" by the developer. In a statement issued by his office, he also said it would be "bad public policy for the city to continue consideration of the project in light of the indictment of an official of the development firm."
Weiss' announcement, after months of not taking a position, is a serious blow to the project because the full City Council rarely votes against council members on projects in their districts.
Prosecutors began presenting evidence to the grand jury in the case on Nov. 10. Grand jurors heard testimony from 51 witnesses over eight days, and returned an indictment on Friday. The defendants were told Friday afternoon that they should appear in Los Angeles County Superior Court for arraignment on Monday morning. They were charged with felony conspiracy and could face a maximum of three years in prison if convicted.
Those indicted include Anthony Boozel of the concrete company TBCI, Brian Larrabure of framing company BLF, Laszlo Furdek of Cal State Steel, Jerry Hein of Desert Roofing, Bruce Shaffer of Starlight Showers and Doors, James Gates of Capital Drywall, Randall Carpenter of Design Masonry, Gerard Lundgren of Freedom Paint, David Mercer of HMK Engineering, William Isaac of Isaac Construction, Ed Hutcherson of Seems Plumbing, Simon Rubin of Simon's Electric and Isaac Zaharoni of Zaharoni Industries.
The defendants have contracts with Casden Properties ranging from $500,000 to $9 million, according to Deputy Dist. Atty. Richard Ceballos.
Prosecutors said most of the contractors worked on the Park La Brea-area project.
From Sept. 1, 2000, to May 10, 2001, the indictment alleges, Archibald met with the subcontractors and tried to solicit illegal contributions for the Nov. 6, 2001, city elections. Archibald allegedly collected donation checks from employees, family members and friends of the subcontractors; the donors were then illegally reimbursed for their contributions, prosecutors said.
The subcontractors paid the donors back in either the exact amount or a slightly higher or lower amount to "fraudulently conceal the criminal reimbursement of campaign contributions," the indictment charges.
Archibald did, however, let the candidates know that Casden's firm was the actual source of the campaign contributions by marking "Casden" on the bottom of campaign donor cards, according to the indictment. The cards are information sheets that provide the campaign with information that must be included in campaign finance statements.
Deena Ghaly, director of enforcement for the city Ethics Commission, declined to speak specifically about the indictment, but said generally when people include a name at the bottom of a donor card it does not necessarily mean money was laundered.
Ghaly said names often are included on donor cards to let the candidate know that the named person hosted a fund-raiser or collected contributions.
Although Ghaly attended the court hearing Monday, she said she cannot confirm or deny whether the Ethics Commission is also looking at the money-laundering charges.
Many of the contractors named in the indictment, however, said they have been cooperating with an Ethics Commission investigation of the case.
Boozel, the concrete contractor, "is disappointed that a matter that should have been handled at the Ethics Commission level has been catapulted to felony status," said his attorney, Dana Cole.
An attorney for Isaac described the construction contractor as an 88-year-old who was a decorated fighter pilot in World War II. "He is obviously very upset about this and feels it is blown completely out of proportion," said Richard Hirsch, his attorney.
In the past, the Ethics Commission has fined elected city officials for receiving excess political contributions, but it has never found that a city candidate knowingly accepted laundered contributions.
Casden and his firm have contributed $213,000 in the last four years to candidates for Los Angeles city offices and to ballot measure committees.
Chad Hummel, an attorney who represents Casden Properties, said the grand jury was looking at the conduct of Casden Properties and made a decision not to indict the company itself. He said that was "the right decision."
"There is absolutely no evidence of any wrongdoing by Mr. Casden, and we think the same is true for Mr. Archibald," Hummel said.
Weiss, whose campaign committee received 11 contributions totaling $7,500 from indicted contractors, their firms and their family members, declined to be interviewed, but issued a statement that denied any wrongdoing.
"It should be clear that at no time did I have reason to believe that any contributions to my campaign were questionable," said Weiss, a former federal prosecutor specializing in public corruption.
Connell's 2001 mayoral campaign received 72 contributions totaling $72,000 from indicted contractors, their companies and relatives, as well as Archibald and other Casden employees. Connell, who is the former state controller, did not return phone calls.
Greuel's campaign committee reported 29 contributions totaling $14,500 from indicted contractors, their relatives and their firms. Greuel said she was unaware of any improper contributions made to her campaign.
"If these allegations are true, it is my hope that the district attorney prosecutes these claims to the fullest extent of the law," she said.
Delgadillo received $5,000 in contributions from relatives and firms of indicted contractors. He did not return calls for comment, but instead referred them to his campaign attorney, Tom Hiltachk.
Delgadillo, the attorney said, "clearly had no knowledge of this activity."
Hiltachk did not know whether Delgadillo was aware of fund-raising done by Archibald, but said the city attorney does not have any information about political money laundering.
"He had no personal knowledge. Nor did his campaign staff," Hiltachk said.
Cooley agreed that the four officials "could have very well been unwitting beneficiaries of Casden's friends' generosity in violation of city contribution limits."
He said there "is nothing to indicate that they shared the guilty knowledge that is required in this type of crime."
Times staff writers Mitchell Landsberg and Roger Vincent contributed to this report.