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City Funds Flow to Check-Bouncing Developer

Mayor, others say the parks commissioner's projects are vital to the revival of South L.A.

June 14, 2004|Ted Rohrlich and Ralph Frammolino | Times Staff Writers

The owner sued him in 2001. Hammond acknowledged the debt in 2002, paid part of it, and in 2003 settled the case out of court. He had a lawyer hand-deliver a check for $15,714. It was no good.

Joseph Kerendian, the lawyer for the store owner, said he was "completely surprised.... I have never had a case where the defendant settles a case and the check bounces."

Kerendian, who has handled dozens of cases involving unpaid debts, said his client was still trying to collect.

Environmental consultant Terry Hayes sued Hammond after the developer failed to pay him $43,000 for an early assessment on the impact of the Santa Barbara Plaza project. Hayes won a court judgment against Hammond in 2002.

He said Hammond did not pay up until a judge threatened to question him about his finances under oath, a proceeding called a debtor's exam, or throw him in jail.

Hayes said Hammond explained that he always pays, eventually. " 'I'm not no-pay. I'm slow-pay,' " he quoted the developer as having said. Hammond denied making that remark.

Gould, the campaign treasurer, said it's the same story with Hammond and his political donations. "If the person perseveres," he said, Hammond will eventually make a bad check good -- sometimes by getting someone else to write a new one.

Not everyone is willing to wait. "I wanted to strangle him," said George Bernharth, a civil engineer who sued Hammond to collect $20,000 for work he did on Santa Barbara Plaza and another project.

Bernharth won a court judgment but said he gave up hope of collecting after an investigator he had hired discovered that banks were taking steps to foreclose on Hammond's two houses and that some of the developer's bank accounts were empty. (The threatened foreclosures predated Hammond's current mortgage defaults.) Then last year, he said, Hammond surprised him by paying "out of the blue."

Hammond, who has a charming and highly polished manner, said most of his troubles came when he got overextended amassing land for commercial ventures and building too many affordable-housing projects at the same time.

Hammond said his behavior is par for the course for successful developers who are often forced to go deep into debt while financing their projects.

Intentionally bouncing checks is a crime thought to be widespread but rarely prosecuted in Los Angeles. The district attorney's and city attorney's offices combined prosecuted about 200 people for it last year. A spot check of these cases showed they involved obvious criminality -- such as passing stolen checks -- not present with Hammond.

Records show that Hammond bounced campaign checks in 2000 and 2001 for $1,000 apiece to Rocky Delgadillo, who became city attorney shortly after the second check was returned for insufficient funds.

As city attorney, Delgadillo prosecutes misdemeanors in Los Angeles. He said he did not consider pursuing charges against Hammond for bouncing checks because police did not bring a complaint to him.

Hammond, who grew up in Claremont, has deep political roots, working on his first political campaign while attending UCLA Law School in 1987.

During that campaign, he met Maxine Waters, now a congresswoman from Los Angeles, and she recruited him to join the 1988 presidential bid of the Rev. Jesse Jackson. The next year, he served as deputy campaign manager for then-Mayor Tom Bradley.

Later, he went to work for church groups seeking to build affordable housing and eventually became a developer.

He made his first foray into commercial development a few years ago at Chesterfield Square, the Home Depot-anchored shopping center.

Part of the financing was a $15-million loan from the Los Angeles Community Development Bank, an experimental institution aimed at funding projects in areas hard-hit by the 1992 Los Angeles riots. Hammond had been a board member of the bank, but stepped down so he could get the loan without facing a conflict of interest.

He then brought in a more experienced developer to build the shopping center.

The $53-million project also received a $7-million city subsidy. It was hailed by community leaders when it opened in 2001 as the largest commercial development in South Los Angeles since the riots.

Hammond, meanwhile, had become one of a relatively few African American business people who regularly raised money for local politicians, tapping a network of employees and business associates, among others.

His fundraising prowess, he said, explains why politicians didn't much care when his own checks bounced. "None of these elected officials were angry with me," he explained, "because I raised money for them." He added that he and his wife raised $30,000 for Mayor James K. Hahn's current reelection campaign.

Hammond's wife, Ayahlushim, is also politically active. She is known for providing informal advice to candidates and was employed part-time as appointments secretary to Assemblyman Herb J. Wesson Jr. (D-Culver City) until he stepped aside as speaker earlier this year.

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