Ethics Panel Plans Heavy Penalties

Capping investigations into two unrelated schemes to illegally influence city elections, the Los Angeles Ethics Commission’s director released agreements Tuesday for a combined $252,000 in fines against former City Councilman Martin Ludlow and prominent attorney Pierce O’Donnell.

The $147,000 fine against O’Donnell and $105,271 fine against Ludlow represent the second- and fourth-highest penalties levied against individuals in commission history.

The commission is expected to approve the agreements at its meeting next Tuesday.

The cases go to the core issue of public trust in the integrity of elections, officials said Tuesday.

“It is so critical for the public to have faith in the election process and the fairness of elections. And when anyone impugns the integrity of the election process, we must take action,” said commission President Gil Garcetti. “These case are egregious examples of that.”

Ludlow has signed an agreement with the commission in which he admits that during his successful 2003 run for City Council he played a role in getting the Service Employees International Union Local 99 to secretly provide $35,090. The money was used to hire six employees for the union who instead worked on Ludlow’s campaign and to provide the campaign with trucks, sound equipment and a cellphone.

He “took deliberate action to circumvent city contributions limits and attempted to conceal that illegal activity,” the settlement agreement says.

“Such violations are extremely serious, because they deprive the public of information about the true source of campaign funds and may allow the excess contributor an inordinate amount of influence over the outcome of a city campaign,” the agreement says.

Ludlow, who recently resigned as head of the Los Angeles County Federation of Labor, admitted nine violations of city campaign finance law. He also agreed to plead guilty to state and federal felony charges that resulted from the yearlong investigation into Local 99 and to pay $65,000 in fines and restitution in those cases.

The $105,271 in city Ethics Commission fines represents the maximum penalty for the violations, equal to three times the amount of money improperly put into the campaign. Ludlow must pay the fines by July 1.

However, state law permits a former candidate to reactivate an old campaign committee and to raise contributions from supporters to pay fines.

Ludlow already has taken steps to do so.

Commissioner Sean Treglia said he would have preferred that the commission require Ludlow to pay the fines from his own pocket.

“If a candidate intentionally violates the law, they should be personally accountable for the fines,” Treglia said.

Once approved by the commission, the settlement will resolve administrative charges that Ludlow violated city campaign finance laws, leaving only the formal plea and sentencing in the state and federal cases pending.

O’Donnell, who has not held elected office, does not have the option of paying his fines from a political account.

The attorney, whose clients have included major corporations, cities and Hollywood figures, signed an agreement admitting to 74 counts of violating city campaign laws.

O’Donnell admitted making 26 contributions under assumed names to the campaign of former Mayor James K. Hahn in 2001 by using $25,500 of his personal funds to reimburse employees and associates for donations they made to Hahn’s campaign, according to the settlement agreement.

Not only did he hide the true identity of the contributors, but O’Donnell also exceeded the $1,000 limit on contributions from individuals to mayoral candidates, the agreement said.

O’Donnell, whose attorney declined to comment, also admitted that he was late in notifying the Ethics Commission of a $25,000 independent expenditure that paid for a mailer opposing Antonio Villaraigosa and supporting Hahn for mayor.

His actions reimbursing others “deprived the public of timely disclosure of the true source of the contributions,” the agreement said.

The settlement comes just a month after O’Donnell pleaded no contest to five misdemeanor criminal counts stemming from the scheme and agreed to pay $155,000 in fines and penalties to settle the criminal case.

Kathay Feng of California Common Cause said both cases are troubling.

“The laws were set up to improve disclosure and set limits on what can be contributed, and the laws were clearly” flouted by both parties, Feng said.