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2 Hahn Events Test Ethics Law

His commissioners were hosts of fundraisers that drew companies holding or seeking city contracts.

September 10, 2004|Noam N. Levey and Patrick McGreevy | Times Staff Writers

Los Angeles Mayor James K. Hahn was just getting his reelection campaign started last summer when he went to suburban Rolling Hills to raise money.

At an estate overlooking the Pacific, executives with companies that did business at the nearby Port of Los Angeles -- including a few that were in the middle of negotiating new leases there -- paid $1,000 to eat a catered poolside dinner and chat with the mayor.

And there to welcome them was Nick Tonsich, the fundraiser's co-host and president of the harbor commission, which oversees millions of dollars' worth of contracts and leases at the sprawling port.

It was not the only time one of Hahn's commissioners helped raise money from companies that depended on the commissioner to get city contracts.

Nine months earlier, Ted Stein, then president of the airport commission, had opened his Encino mansion to support Hahn's campaign against San Fernando Valley secession and played host to firms that had recently won contracts from his commission.

Tonsich and Stein -- two of Hahn's most powerful appointed commissioners until Stein resigned in April amid controversy over his fundraising -- together helped raise at least $80,000 from companies that had recently come before their commissions.

Hahn's fundraising has come under increasing scrutiny in recent months as federal and local prosecutors investigate potential links between campaign contributions and city contracts, particularly at the harbor and airport. It is not known what specific acts prosecutors are investigating.

Civic leaders tried to separate fundraising from city business when they wrote Los Angeles' trailblazing ethics law 14 years ago. The law states that officials shall not "solicit" from companies with recent or pending business before them.

Hahn maintains the two commissioners did not break the city ethics law because they did not specifically "solicit" donations.

"If someone has a fundraising event at their house, it doesn't mean they are soliciting the contributions," the mayor said. In a later interview, Hahn added, "Fundraising means asking somebody for money."

But a review of contracts, campaign reports and commission minutes, as well as interviews with more than 45 donors and lobbyists, indicates that Tonsich and Stein played key roles in the mayor's efforts to raise money from people with business at their commissions -- the very scenario that the law was written to prevent.

Tonsich paid for the invitations to his fundraiser, put his name on them as a co-host and directed donors to send checks to his San Pedro law office. Stein opened up his home, paid for cocktails for guests and introduced the mayor when Hahn spoke to donors assembled in the backyard.

Tonsich played host to at least five Hahn donors who had either recently won harbor contracts or were still in negotiations to lease property at the port. Stein played host to at least four donors who had recently won contracts or leases from the airport commission.

And both men took advantage of a fundraising environment in which at least some companies that depended on the commissioners for contracts and leases believed that making a donation was part of doing business with the city of Los Angeles.

Robert Curry, president of California Cartage Co., who paid $1,000 to attend Tonsich's fundraiser, was among several businessmen who said they felt they should not turn down an invitation to a mayoral fundraiser.

"I don't think the mayor has done anything for or against me," said Curry, who said he doesn't pay attention to local politics. "I heard everybody in the industry is going to be there, so I thought I would be conspicuous by my absence. It seemed like the smart thing to do."

It was scandal over mixing personal business with official duties in the late years of Mayor Tom Bradley's administration that prompted Los Angeles voters to adopt tougher campaign finance laws in 1990.

The law's authors wanted to prevent companies from winning city contracts by making political contributions.

But they also meant to eliminate the possibility that contractors would feel they could not compete for city business unless they contributed, said Geoffrey Cowan, now dean of the USC Annenberg School for Communication, who chaired the special commission that wrote the laws.

Their solution was to restrict the fundraising activities of city commissioners, the citizen volunteers appointed by the mayor to oversee city departments.

The ethics law states that a commissioner shall not "solicit, direct or receive any contribution" for city campaigns from anyone with an "administrative action" pending before him or her or anyone who has had an "administrative action" before him or her in the preceding 12 months.

Violations can be prosecuted by the city attorney as misdemeanors.

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