A Los Angeles company owned by a real estate developer faces a proposed fine of $71,000 for reimbursing donors to a City Council candidate, hiding the true source of the money and exceeding city limits on campaign contributions.
Five years ago, real estate developer Bruce Makowsky gave $700 — the maximum donation allowed at the time — to support candidate Joan Pelico. Makowsky then asked his assistant to seek more contributions for Pelico from his employees and associates and tell them they would be reimbursed for their donations, Ethics Commission investigators found.
Ten people linked to a company that Makowsky owns, 1181 N. Hillcrest Road LLC, gave to the Pelico campaign and were reimbursed by the company, according to investigators. Under city law, campaign donors are barred from giving in the name of someone else, a practice that can be used to sidestep limits on how much each person can contribute.
In a report, Ethics Commission staffers recommended a penalty of $71,000 for the company — the maximum it could have been fined — because reimbursing donors is “an extremely serious violation,” they wrote in a report .
The company has already agreed to pay the proposed fine if it is approved by the Ethics Commission, which will vote on it next week.
Makowsky’s company “accepted responsibility and is gladly paying the agreed-upon amount to help the city root out corruption and improper influence, none of which was present here,” said its attorney Ronald Richards.
Richards emphasized that the fine is being imposed on the company, not Makowsky personally, who “was not a party to this resolution nor is he liable.”
Makowsky signed the document agreeing for the company to pay the fine, listing himself as its president, and city investigators said in their report that he “controls the contribution activity” of the company.
Pelico, who has long served as chief of staff to City Councilman Paul Koretz, was running to represent a council district that stretches from Sherman Oaks to Miracle Mile. She said she took an unpaid leave from her City Hall position while she was campaigning for the seat, which was ultimately won four years ago by Councilman David Ryu.
City investigators initially stated in their report that Makowsky had formed his company for a development project in the Westside district that Koretz represents, but later revised the document to note that the Hillcrest Road address is in Beverly Hills.
Makowsky was the developer behind a lavish home at 1181 N. Hillcrest Road that was eyed by Jay-Z and Beyonce before being purchased five years ago by the billionaire creator of the video game “Minecraft.”
Ethics Commission investigators said they found no evidence that Pelico knew that the donations were improper. Pelico said Friday that when investigators first brought the issue to her attention, she was “pretty pissed off.”
“It goes against everything I stand for and believe in,” said Pelico.
Pelico said she did not know Makowsky well, but had met him at a holiday party and asked him to donate to her campaign and encourage others to do so. At one point, Pelico said, Makowsky contacted her because he wanted to get a street resurfaced in another council district at his own expense, and she called the Bureau of Street Services to let them know about the request.
Pelico also said she was unfamiliar with the company that is now facing the fine.