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Key Hahn Supporter Is Accused of Scam

Real estate fraud suspect Mark Abrams helped funnel $300,000 to the mayor's campaigns. The developer got prime City Hall access on a permit.

October 31, 2004|Rich Connell and Robert J. Lopez | Times Staff Writers

James K. Hahn was having lunch in a Beverly Hills restaurant four years ago when a developer walked up and introduced himself. Mark Alan Abrams said he wanted to help Hahn, then Los Angeles city attorney, become the next mayor.

Soon, the developer was among Hahn's biggest fundraisers. He helped funnel more than $300,000 to the mayor and his political campaigns through an array of associates and businesses. Some of the cash financed last-minute mailers attacking Hahn's opponent, Antonio Villaraigosa, in the 2001 mayoral runoff race as an "East Los Angeles liberal-fringe Democrat" soft on gang murderers and sexual predators.

Hahn said Abrams "seemed like a nice man." He said he saw no reason to check his background.

Had he done even a routine search of Southland newspaper articles, the mayor would have found red flags: a previous political controversy and allegations of real estate fraud.

As Abrams angled his way into the upper reaches of Hahn's political operation, the developer was allegedly masterminding a massive mortgage scam in some of the city's wealthiest neighborhoods, according to federal court records. Most of the political money came from individuals and companies allegedly involved in the scheme.

The campaign cash cemented a political relationship between Abrams and Hahn, with the developer awarded a seat on Hahn's "executive committee," a group of fundraisers who brought in $25,000 or more.

At Abrams' behest, Hahn appointed the developer's real estate attorney to a coveted seat on the city Planning Commission, which sets zoning and land use policy in Los Angeles.

When Abrams and his partner, Charles Elliott Fitzgerald, wanted to build two multimillion-dollar homes high in the hills near Bel-Air, the mayor's office pressed city officials to help the developer get a crucial permit, records show. A department head assigned Abrams' project to a unit for selected developers. The unit helped shepherd it through the bureaucracy.

Whether this special access influenced the outcome of the permitting process is not clear. City engineers stood their ground and made Abrams provide extensive geological studies of the site, but the developer was able to make his case to officials at the highest levels of City Hall, records show.

While one mayoral aide referred to the planned homes near Bel-Air as a "rather challenged proposed development" early in the process, Abrams ultimately obtained the necessary permit to proceed.

Hahn's reelection campaign spokeswoman, Julie Wong, said that Abrams' case was handled in a routine manner and that the developer received no special treatment.

Still, the ease with which Abrams moved into Hahn's inner circle raises new questions about the influence of campaign cash on an administration already under scrutiny in a "pay to play" criminal probe. That investigation by federal and county prosecutors focuses on alleged links between contributions and contracts at city agencies.

In retrospect, Hahn said in an interview, it was "very disappointing" when he learned last year of his fundraiser's alleged involvement in a real estate scam.

"I've been raising money and running for office for over 20 years," Hahn said. "This is kind of a unique situation here."

Abrams' attorney, Nathan J. Hochman, declined to comment on the political fundraising activities, any pending investigations or his client's alleged role in the mortgage scam.

But he said that "the mastermind behind the real estate fraud was Charles Elliott Fitzgerald" -- Abrams' partner and another principal in the case.

Hochman said Abrams' previous legal problems should not overshadow years of civic contributions, including serving as one of the youngest elected school board members in the country.

"While Mr. Abrams has made certain mistakes in the past," Hochman said, "he has successfully developed hundreds of millions of dollars of real estate."

Fitzgerald, who has fled the country, could not be located for comment. His last attorney of record in the mortgage fraud case said he no longer represented Fitzgerald and could not comment on his behalf. A court filing indicates that Fitzgerald told relatives he was not guilty and left the U.S. to avoid being jailed for his association with Abrams.

Abrams, 43, is a chief target in a criminal investigation by the U.S. attorney and the FBI for his alleged role in the mortgage scam, court records show. Federal prosecutors also have collected information on Fitzgerald, 44, who at a minimum faces contempt charges for failing to comply with civil court orders to turn over money and other valuables gained from the fraud, records show.

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