2001 Hahn Donor Gets $270,000 Ethics Fine
The Los Angeles Ethics Commission on Tuesday imposed a record $270,000 fine against Westside developer Mark Alan Abrams after the panel concluded that he hatched a scheme to launder political contributions to benefit James K. Hahn’s 2001 mayoral campaign and the campaigns of two Hahn allies.
The fine is the largest penalty assessed against an individual by the ethics panel in its 15-year history.
“The actions of Mr. Abrams here really strike at the heart of democracy,” said Gil Garcetti, president of the Ethics Commission. “It’s simply not right.”
No one has said that Hahn knew the contributions were tainted, but the case drew new criticism from his opponents four weeks before he stands for reelection.
The panel found that Abrams committed 48 violations of campaign finance laws involving $90,000 in political contributions, many of them to campaign committees for Hahn, City Councilman Tony Cardenas and former Councilman Nick Pacheco.
The violations included charges that Abrams reimbursed $28,500 in contributions made in the names of employees, associates and others, a practice known as political money laundering. Many of the checks also exceeded the city’s limit on contributions.
Some commissioners voiced frustration that Tuesday’s action failed to answer whether Abrams received anything from Hahn in return for raising money for his campaign.
“The one piece that is missing in all of this that we don’t know is what did Mr. Abrams receive in return for his investment,” Commissioner Sean Treglia said. “It’s not germane to this hearing, but I can guess, and I can guess that further hurt the public’s interest because it created an unfair playing field.”
The Times has reported that Hahn visited Abrams’ office twice, and the mayor’s staff helped Abrams receive high-level City Hall access on a troubled multimillion-dollar development near Bel-Air.
Kam Kuwata, a campaign spokesman for the mayor, said Tuesday that Abrams received no special treatment and that the mayor was not aware any of the contributions were laundered.
“The mayor had no knowledge of it and he believes that if anyone did anything illegal they should be punished,” he said.
However, Ace Smith, a spokesman for mayoral challenger Antonio Villaraigosa, said the case is troubling. “This is just one more indication of how deep-seated corruption is in the Hahn administration,” Smith said.
Commissioner Dale Bonner, who voted for the penalty, questioned whether the fines were excessive compared to what the panel has fined elected officials. “On the surface, it sounds like an exorbitant amount to me,” he said.
The largest Ethics Commission fine against an elected official was $79,000 levied in 2002 against Council President Alex Padilla for campaign finance violations. The largest fine ever imposed by the panel was a $400,000 penalty against the shipping firm Evergreen America in 1993 for political money laundering.
Nathan J. Hochman, an attorney for Abrams, argued Tuesday for a fine of $90,000. Hochman questioned the panel’s 4-0 decision “to basically set the equivalent of the world record in this case with a $270,000 maximum fine.”
In addition to money laundering, the panel found that Abrams solicited and received a $25,000 contribution from an associate for an independent expenditure campaign supporting Hahn, in violation of the $500 limit on such contributions.
That money went to a mailer criticizing Hahn opponent Antonio Villaraigosa as an “East Los Angeles liberal-fringe Democrat” who was soft on gang murderers.
It is uncertain whether the city will be able to collect on the fine. Hochman said some of Abrams’ finances are controlled by a court-appointed receiver. Abrams and a partner, Charles Elliott Fitzgerald, are key figures in a federal investigation of alleged mortgage fraud, and the district attorney’s office is also reviewing Abrams’ fundraising for possible criminal violations.
Abrams did not attend Tuesday’s hearing.
Instead, he filed a waiver in which he consented to the commission taking action based on testimony of employees and associates. He did not contest the allegations, but did not admit them, either. An admission of guilt could potentially be used in a criminal prosecution.
At the hearing, Commissioner Bill Boyarsky, a former Times city editor, asked investigators to elaborate on Hahn’s meetings with Abrams, but the investigators declined to provide more details.
He also noted that the investigators’ report said a woman who worked for Abrams told them that her boss and a top official in Hahn’s 2001 campaign, Troy Edwards, appeared to have discussed the attack mailers aimed at Hahn’s opponent. Under the law, groups paying for independent expenditures cannot coordinate their efforts with political campaigns.
“Did you pursue that?” Boyarsky asked investigator Dominic Berbeo. “Were you able to find out whether Mr. Edwards coordinated this effort?”
“That would be something that we would pursue,” Berbeo said. “But I don’t think we are allowed to discuss that in the context of this particular hearing.”
Hahn said last Friday that his campaign did not coordinate with Abrams on the independent expenditure.
Meanwhile, the Ethics Commission voted Tuesday to approve $8,250 in fines against six Abrams associates who admitted being reimbursed by Abrams for contributions.
And in a separate case, the panel voted Tuesday to levy $79,000 in fines against subcontractors and associates of Casden Properties for their involvement in another political money laundering scheme.