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A $72-million apartment project. Top politicians. Unlikely donors. Who wrote the checks?

Site of the $72-million Sea Breeze apartment complex
An overview of the Sea Breeze construction site.
(Travis Geske / For The Times and Eben McCue / Los Angeles Times)

No one is registered to vote at the run-down house on 223rd Street. The living room window has been broken for months. A grit-covered pickup sits in the dirt front yard with a flat tire.

Yet dozens of donations to local politicians — totaling more than $40,000 — have come from four of the people who have lived there over the last eight years.

Victor Blanco, a repairman originally from El Salvador, gave the most: 22 donations totaling $20,300 since 2008, according to contribution reports. More than half that money went to U.S. Rep. Janice Hahn (D-Los Angeles) while she was pursuing local, state and federal office, according to contribution reports.

Asked about those donations, Blanco could not explain why he gave Hahn so much money.

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“I do not remember,” he said, standing in the driveway of the home, located in West Carson.

Blanco is among more than 100 campaign contributors with a direct or indirect connection to Samuel Leung, a Torrance-based developer who was lobbying public officials to approve a 352-unit apartment complex, a Times investigation has found.

Those donors gave more than $600,000 to support Hahn, Mayor Eric Garcetti and other L.A.-area politicians between 2008 and 2015, as Leung was seeking city approval for the $72-million development in L.A.’s Harbor Gateway neighborhood, north of the Port of Los Angeles, The Times found.

The fundraising effort is a case study in the myriad ways money can flow to City Hall when developers seek changes to local planning rules. The pattern of donations from unlikely sources, some of whom profess to have no knowledge of contributions made in their name, suggests an effort to bypass campaign finance laws designed to make political giving transparent to the public.

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At one critical point, Garcetti invoked a mayoral prerogative — which he has used only twice — to reduce the number of council votes required to approve the project. In several cases, elected officials received the money as they were poised to make key decisions about the development, known as Sea Breeze.

Many of the contributions were reported on the same day, in the same amounts, for the same politician, contribution records show. They came from the handymen who fixed Leung’s buildings; the landscaper who tended his gardens; the chef who prepared meals in a hotel run by his company.

Blanco, for instance, has worked at several Leung properties; the house where he lives is owned by one of Leung’s companies.

By the time the contributions stopped, Leung had overcome stiff opposition from city planners, winning approval of a project that had divided neighborhood businesses and residents. His victory came as City Hall faced mounting criticism that campaign cash drives such decisions.

The Times uncovered the fundraising efforts by examining public campaign contribution reports, property records, business filings and court records, and in interviews with dozens of donors.

Among the donors contacted by The Times, 11 denied making contributions or said they didn’t remember giving. Several others were unable to provide basic details about their donations, such as why they gave, to whom and how many times. One donor said she had been reimbursed for at least one contribution by a relative.

Dozens of other contributors refused to comment or did not respond to interview requests.

That some contributors denied giving, or didn’t remember making donations, raises questions about whether someone else was the source of the money, according to several campaign finance experts. That practice is not permitted under campaign finance laws.

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“A person of normal means — i.e. not a millionaire — would remember checks of this size,” said Richard Skinner, a policy analyst on campaign finance for the Washington, D.C.-based Sunlight Foundation, a nonprofit group that focuses on government transparency. “That’s not the sort of expense one usually makes casually and then forgets.”

Leung and his representatives declined requests from The Times to discuss his development and campaign contributions. Approached by reporters at the Department of Building and Safety, Leung said he did not reimburse any donors but refused further comment.

A hard sell: apartments in an industrial zone 

Leung, 66, was born in China and lives in Palos Verdes Estates, on a street with commanding ocean views. He has been in the real estate business for at least three decades, constructing new apartments, buying and leasing single-family homes, and building or running hotels across Los Angeles County.

In Harbor Gateway, he and one of his companies, A&M Properties, sought approval to build hundreds of new apartments in an area zoned for industrial rather than residential uses. Their argument: The area was in dire need of housing.

The Department of City Planning opposed the plan and, in March 2014, the nine-member Planning Commission — composed of Garcetti appointees — rejected the proposal, saying new homes should not be built so close to properties zoned for heavy industry.

But Garcetti and the council overruled the Planning Commission in February 2015, changing the zoning for the site.

Neighborhood activists who favor limits on development charge that Garcetti and the council are too quick to rewrite city rules in ways that benefit politically connected developers, especially those that provide campaign cash.

As the project was under review, donors tied to Leung contributed at least $94,700 to Councilman Joe Buscaino, who represents Harbor Gateway and was an enthusiastic supporter of the project. That was nearly 10% of the money raised by Buscaino during the period examined by The Times.

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More than $30,000 went to Councilman Jose Huizar, who heads the powerful council committee that reversed the Planning Commission’s decision and approved Leung’s project. At least $65,800 went to Councilman Mitch Englander, who sits on that committee with Huizar.

Donors with some connection to Leung also provided $60,000 to a campaign group that supported Garcetti’s 2013 mayoral bid. And more than $200,000 went to Hahn, who wrote a letter favorable to Sea Breeze before she left the council.

Hahn, Garcetti and several other politicians contacted by The Times said the donations played no role in their positions on Sea Breeze. Buscaino said the development would bring new homes to a property that had long sat vacant “at a time when people are thirsting for workforce housing.”

“If I didn’t get one penny for this project, I’d still support it,” he said in an interview.

Some unlikely political donors 

The political contributions came from across Southern California. Among the donors were affluent professionals living on winding hillside streets in Granada Hills and Palos Verdes Estates. But others were working-class laborers renting modest apartments in Koreatown, South Los Angeles and North Hollywood.

The donors included Leung’s relatives, his employees and their relatives. Leung’s business associates also made contributions, as did their family members, their companies, their co-workers and their own business associates. Relatives and co-workers of some of those donors also gave.

Some contributors said they had no interest in local politics, even though records identify them as giving hundreds — sometimes thousands — of dollars to the L.A. politicians. Many also lived far outside the districts of the candidates to whom they gave money.

One of Hahn’s donors, construction worker Johnny Ruiz, was living in Reseda, about 25 miles from Hahn’s Watts-to-San Pedro council district, according to campaign contribution records. He said he is the brother-in-law of Hector Molina, whose construction company has worked on several of Leung’s buildings. And he previously was employed by Seems Plumbing, a company that was hired on a Leung project in 2008.

Interviewed at a Torrance construction site, Ruiz said he did not know who Hahn was and did not recall giving her political contributions. Yet Ethics Commission records show he gave her two $500 contributions in 2009 while she was on the City Council and representing the district that included the Sea Breeze site.

“I’ve given donations to a lot of things, like Goodwill,” Ruiz said in Spanish. “But not to politicians.”

Molina did not respond to several requests for comment.

Political donors are legally required to give their names and other details, and that information is publicly reported by the campaigns.

Federal, state and city laws prohibit contributors from reimbursing other donors — a practice sometimes called campaign money laundering — to prevent such “straw donors” from circumventing legal limits on political giving. In City Council races, that limit is currently $700.

Violations of those laws can result in serious consequences. Two months ago, the father of U.S. Rep. Ami Bera (D-Elk Grove) was sentenced to a year and a day in prison for organizing a money-laundering scheme that helped fund his son’s campaigns.

Hahn, who is running for a seat on the Los Angeles County Board of Supervisors, said in an interview that she had no knowledge of any donors being reimbursed. If that occurred, she said, “that’s illegal.” She said that she was troubled by that possibility and takes campaign finance law “very seriously.”

“All my committees were audited. I have a lawyer, a treasurer who looked at all my campaign donations. There was never any indication that anybody got reimbursed for a donation to me,” Hahn said.

Some donors readily acknowledged making contributions.

“I give to the symphony. I give to the opera. We give to who we believe in,” said Lorraine New, who was identified in court documents in 2013 as executive vice president of A&M Properties, which pushed for approval of Sea Breeze.

New gave more than $46,000 to local politicians between 2008 and 2015, according to campaign contribution records.

A burst of donations

When Sea Breeze was first proposed, some critics saw the site as a less-than-ideal spot for a six-story apartment complex.

At one neighboring business, construction crews frequently work outdoors, building stages and scenery for music festivals. Nearby, trucks at a Los Angeles Times distribution facility load up for early-morning deliveries.

The area north of Sepulveda Boulevard was designated by the city for heavy manufacturing. Under the zoning rules, homes were not allowed and any new structure could be no taller than 45 feet.

But like many other developers in Los Angeles, Leung set out to persuade the planning department, and then the City Council, to change the rules for the site.

Five weeks before Leung filed his application for the Sea Breeze project, a burst of donations came in for the reelection bid of Hahn, who represented the area. On Dec. 29, 2008, she reported receiving 22 separate donations, for a total of $11,000. Each was $500, the maximum allowed under city rules at the time.

At least 21 of the 22 contributions came from donors connected to Leung, including family members, business associates and family members of those business associates, according to interviews and public records.

The money arrived from workers at Best Western Golden Sails Hotel in Long Beach, where Leung was president, according to court documents; Park Parthenia, a collection of apartment buildings in Northridge where Leung was CEO; Harbor Court apartments, a 44-unit building in Harbor Gateway developed by Leung; and Seaport Homes, an apartment complex in San Pedro developed by one of Leung’s companies.

Because Harbor Gateway was in her district, Hahn’s support was critical. At City Hall, council members have a longstanding practice of deferring to their colleagues on development decisions in their districts.

Hahn handily won her 2009 reelection campaign. Three days later, she took in more Leung-related donations. Each contribution was reported on the same day and in the same amount. Hahn received at least $15,500 from 31 donors with ties to Leung and his properties the week of her reelection, records show.

Hahn reported a $500 donation from Pamela Rojas, a Panorama City homemaker. In an interview, Rojas said she was a friend of Johnny Ruiz, the construction worker who worked at Leung properties. Like Ruiz, she said she doesn’t remember giving Hahn any money.

Rojas’ ex-husband also was listed as a $500 donor. He told The Times in a separate interview that he does not remember contributing to Hahn either.

Donors also gave to Hahn’s officeholder account, which council members are allowed to use for meals, travel and other expenses.

During 2008 and part of 2009, the go-between for most of those donations was the lobbying firm Rose & Kindel, according to Ethics Commission reports. The firm represented A&M Properties for roughly a year on the Sea Breeze project.

At the end of 2009, Hahn launched a bid for lieutenant governor, a contest with much higher contribution limits. Leung’s associates, their companies and their family members gave $103,000 to her statewide campaign — nearly 10% of the total collected.

Blanco, the repairman, contributed $6,500 — the maximum allowed under state law. So did Francisco Matamoros, an employee of Molina Construction, which worked on at least four Leung properties, according to city building records.

Between 2010 and 2012, Matamoros and a family member gave more than $12,000 to politicians who represented, or were campaigning to represent, the San Pedro area, according to donation forms.

Times reporters met with Matamoros at his apartment in North Hills and, sitting at the family’s desktop computer, showed him the Ethics Commission website that lists contributions made in his name. He denied giving contributions to Hahn or the other candidates for her seat.

“We don’t insert ourselves in politics,” he said in Spanish.

Hahn lost her bid for statewide office. A few months later, she turned her sights on another prize: a congressional seat that covered much of the South Bay.

Within months, her campaign picked up $52,500 in donations from Leung’s network of associates. Each donor gave $2,500, the maximum allowed under federal election law at the time, according to donation records.

One $2,500 donor was Jesus Galguera-Garcia, a construction worker who lives in South Los Angeles. At the time, he was doing carpentry and other construction jobs for Molina Construction, a company that worked at Leung properties.

Galguera-Garcia described the contribution as being equal to about 20 days of his pay. Like Matamoros, he said he is not interested in politics.

Hahn won her race for Congress. In one of her last acts as a council member, she sent a letter to a representative for A&M Properties, offering her “conditional support” for the Sea Breeze project. She said it would provide “new housing units in an area that has had little if any significant development in recent years.”

Hahn said it was important for A&M to work “in good faith with the Harbor City Neighborhood Council” and address traffic, parks and design issues.

That letter became a key selling point over the next five years, with Buscaino and other Sea Breeze backers describing Hahn as a supporter of the project. Hahn later disputed that portrayal.

“I wouldn’t consider my letter a support letter,” she told The Times.

Contributions for three contenders

With Hahn heading to Washington, D.C., in 2011, and the fate of Sea Breeze still undecided, people with ties to Leung began sending contributions to three men running to replace her.

The contributors first gave to former Councilman Rudy Svorinich, who had served on the council from 1993 to 2001 and was running again. Weeks later, they sent contributions to one of his rivals: then-Assemblyman Warren Furutani, who also was campaigning for Hahn’s seat.

Among those donors was Chin-Lung Lee, who is listed in campaign records as giving to both Svorinich and Furutani. The Chatsworth resident also had made an earlier donation to Hahn.

In an interview at her home, Lee said her sister-in-law Diane Lee had paid her back for at least one of those contributions but declined to provide details.

“She already told me not to tell anything about it,” Chin-Lung Lee said. She declined to answer further questions about the donations.

Diane Lee, also known as Peiann, works at the Park Parthenia apartment complex, where Leung has served as CEO, according to county business filings. She did not respond to messages seeking comment.

Furutani said he knew nothing about any reimbursed contributions. Svorinich did not respond to messages seeking comment.

At the time that Chin-Lung Lee and other donors were giving to Svorinich and Furutani, both men seemed to be strong contenders for Hahn’s seat. But in the November 2011 primary election, the top vote getter was a political newcomer — LAPD Officer Joe Buscaino.

Soon, money began pouring into Buscaino’s campaign from donors affiliated with Leung and his real estate holdings.

By the end of March 2012, some of the donors connected to Leung had given as many as six times to three of the contenders to replace Hahn. Buscaino won the race.

The following year, Buscaino raised money for a committee to support Garcetti’s mayoral bid. Because it was run independently from Garcetti’s campaign, the committee could accept donations of any size.

The pro-Garcetti group reported receiving $60,000 from six donors linked to Leung on April 1, 2013. A day later, Buscaino met in San Pedro with Nancy Bush, Leung’s representative, and discussed the Sea Breeze project.

Gearing up for a zoning fight

By 2014, local opposition to Sea Breeze had begun to emerge. The Harbor City Neighborhood Council, which represents homes on the south side of Sepulveda, came out against the development.

So did L&B Realty, which owns industrial buildings just north of the Sea Breeze site. L&B argued that noise from its business tenants would lead to complaints from future residents and demands for limits on company operations.

In correspondence with the city, Leung’s attorneys countered that new homes and shopping centers already were changing the face of the area.

Buscaino endorsed the project, as did the Harbor Gateway South Neighborhood Council, which represents properties on the north side of Sepulveda. Adrienne O’Niell, the group’s former president, said Sea Breeze would provide much-needed “workforce housing,” the kind that serves lower-income families.

Business representatives for The Times also raised questions, pointing out that the homes would be built next to a distribution center that operates late at night. However, the company ultimately took no position, a spokeswoman said.

To get approval for Sea Breeze, Leung needed to navigate a lengthy review process. First, the project would be considered by the Planning Commission, which is made up of Garcetti appointees. Then it would face a City Council committee on development. Finally, it would need a vote from the full council and the blessing of the mayor.

Garcetti’s planning commissioners took up the proposal in March 2014. The commission, acting on the recommendation of city planners, voted 7 to 0 to reject the project.

Commissioners said the city needed to preserve manufacturing sites and the well-paying jobs that come with them. They also argued it was a mistake to put apartments so close to industrial businesses.

The outright rejection of Sea Breeze was unusual. In the vast majority of cases, the commission approves real estate projects, though it does sometimes insist on alterations to development proposals.

The Sea Breeze proposal headed to the council’s three-member Planning and Land Use Management Committee with two strikes against it: a negative recommendation from the city’s planning department, and a rejection by the Planning Commission.

At that point, Garcetti stepped in and used a rarely exercised power, granted to him under the City Charter, to smooth the path. He backed the change in city rules sought by Leung, reducing the number of votes needed for the City Council to approve it from 12 to 10.

Asked why he took that unusual step, Garcetti issued a statement saying that he supported the Sea Breeze project because it would help meet his goal of building 100,000 housing units across the city by 2021. He also noted that both Buscaino and key community groups supported the project.

Garcetti declined an interview request. His spokeswoman, Connie Llanos, said that the donations played no role in the mayor’s decision and that he had “no involvement whatsoever” with the group that took in the money. She added that Garcetti was unaware of the contributions.

A focus on fundraising 

With Sea Breeze heading for a vote, the contributors with ties to Leung focused their fundraising efforts on the three members of the City Council’s planning committee — Englander, Huizar and Councilman Gil Cedillo.

Within six months, Buscaino and the committee’s three members had received at least $70,200 from contributors tied to Leung. The committee ultimately voted to endorse the Sea Breeze development.

In the run-up to the final council vote, donors linked to Leung also gave money to support candidates backed by Buscaino. One of the biggest beneficiaries was an independent committee to support former Santa Monica City Councilman Bobby Shriver, who was running for a seat on the Los Angeles County Board of Supervisors.

Buscaino, the honorary chairman of a Shriver fundraising committee, went to the Sea Breeze site to meet with Leung’s representative on Aug. 12, 2014. Two days later, that pro-Shriver campaign committee reported $120,000 in contributions from donors affiliated with Leung.

Buscaino said there was no connection between his Sea Breeze meeting and the fundraising for Shriver. “You can’t put two and two together,” he said.

Sea Breeze was outside the district where Shriver was running; he said he did not know Leung and had never heard of the project.

In the final weeks before the City Council vote, Buscaino co-hosted a fundraiser in San Pedro for the reelection campaign of Councilwoman Nury Martinez. Within three days, Martinez reported receiving at least $7,700 in donations connected to Leung.

Victor Blanco, the repairman living in the house on 223rd Street, was one of those donors. So was one of his longtime housemates. Two others who had worked at Leung properties also gave.

All four of their checks had the same date and what appears to be the same handwriting. The city’s Ethics Commission, which turned over copies of the checks in response to a public records request, blacked out the signatures.

Two weeks after the Martinez fundraiser, the council approved Sea Breeze unanimously, without discussion. A spokesman for Martinez said that she had never met Leung or his representatives — and that the contributions played no role in her support.

The Leung-affiliated donors kept giving for a few more months, providing funds to Englander’s bid to replace Los Angeles County Supervisor Mike Antonovich and Buscaino’s officeholder account.

Buscaino tapped that account in July to help pay for an official city trip to Italy.

Construction recently began on the Sea Breeze site along Sepulveda Boulevard, seven years after it was first proposed.

On an August afternoon, a lone man in a hard hat and orange vest was working on the site, loading items into a pickup. It was Victor Blanco, the repairman from the house on 223rd Street, whose residents gave more than $40,000 in political donations, according to contribution records.

When reporters attempted to ask him again about the contributions made by him and his housemates, Blanco told them to go away.

“I’m not opening my mouth,” he said.

Times staff writers Frank Shyong, Cindy Chang, Brittny Mejia and Ruben Vives contributed to this report.


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