Los Angeles Mayor Antonio Villaraigosa and former City Councilman Jack… (Brian Vander Brug, Los Angeles…)
A campaign fundraiser for Los Angeles Mayor Antonio Villaraigosa has been charged with illegally funneling $26,000 in contributions to the mayor and former City Councilman Jack Weiss, according to a five-count grand jury indictment unsealed Friday.
Prosecutors with the Los Angeles County district attorney's office contend that Koreatown real estate developer Alexander Hugh, 62, worked with Annette Lee, 44, to have employees at Lee's escrow company give donations of $1,000 or more to the campaigns of Villaraigosa and Weiss.
Hugh reimbursed the employees with cash, an illegal practice known as campaign money laundering, said Deputy Dist. Atty. Max Huntsman of the Public Integrity Division.
Hugh was with Villaraigosa in South Korea as part of the mayor's Asia trade mission in 2006. He won approval of a controversial hotel project in 2007. And he co-hosted separate fundraisers in 2008 for Villaraigosa and Weiss, who was then running for city attorney.
Neither politician was aware of the scheme, Huntsman said.
Campaign fundraising violations often swirl around City Hall but only occasionally result in criminal prosecutions. The most recent concluded in 2009, when two Florida businessmen were fined $312,000 after participating in a scheme to reimburse contributors to Villaraigosa's 2005 election campaign. One of those men, Sean Anderson, began directing the money one day after dining with Villaraigosa.
In 2007, real estate developer Mark Abrams pleaded guilty to four misdemeanor counts in connection with contributions he directed to former Mayor James K. Hahn and two council members. And in 2004, an executive with Casden Properties pleaded no contest to participating in a money laundering scheme that generated contributions for four candidates, including Weiss.
By illegally funneling money to his chosen candidates, Hugh circumvented campaign contribution limits designed to level the playing field for the public, Huntsman said. He also gained direct access to City Hall decision-makers, the prosecutor added.
"He gets to talk to the mayor ... and have a big party with people of influence. That's his payoff," Huntsman said. "And how did he do it? Not by bringing together members of the community who had a common interest, but by having money come out of his own bank account."
Hugh and Lee pleaded not guilty Friday to one count of conspiracy to commit campaign money laundering, two counts of filing a false document, one count of forgery and one count of identity theft. Ken White, Hugh's lawyer, said he looked forward to "vigorously" defending his client.
"We're confident that we're going to be able to demonstrate that they made a mistake regarding Mr. Hugh," he said.
Hugh's company, CIC Group, hoped to construct 16- and 21-story hotel towers at 7th Street and Hobart Boulevard. The project was never built, even though council members gave Hugh a series of exceptions to the zoning code, including an increase in the number of allowable rooms and a reduction in the number of required parking spaces.
The Planning Commission opposed the proposal, known as the Emhurst Hotel, after a city planner said it was out of scale and would overwhelm the surrounding neighborhood. The council ignored that recommendation. And Villaraigosa sided with the council, not his planning appointees.
In November 2007, Villaraigosa appeared at the Emhurst's groundbreaking and said the project symbolized "the economic hope and promise of Koreatown." Hugh also met repeatedly with a Villaraigosa deputy the next year, before and after the Villaraigosa fundraiser, according to documents obtained by The Times.
Between June 2008 and July 2009, then-Villaraigosa Deputy Chief of Staff Jimmy Blackman scheduled at least five meetings with Hugh, including two dinners, according to his appointment calendar. Blackman is now chief of staff to Councilman Dennis Zine.
Neither Villaraigosa nor Weiss responded to requests for comment.
Hugh was released on $100,000 bail. Lee was released on her own recognizance.