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AEG goes after downtown L.A. stadium critic Antonovich

The developer reveals the supervisor's wife has been in a pay dispute with an AEG affiliate in China. Antonovich cancels a county board vote on opposing AEG's bid to curb environmental lawsuits.

August 30, 2011|By David Zahniser and Garrett Therolf, Los Angeles Times
  • L.A. County Supervisor Michael D. Antonovich, shown in 2007, says he was blindsided by AEGs conflict-of-interest allegation against his wife and disputed the notion that there was a connection between his proposal and her consulting work.
L.A. County Supervisor Michael D. Antonovich, shown in 2007, says he was… (Mark Boster / Los Angeles…)

Intensifying its push for an NFL stadium in downtown L.A., entertainment conglomerate Anschutz Entertainment Group launched an unusually direct and public attack on one of the most prominent critics of the proposal.

Supervisor Michael D. Antonovich had planned for the county board to take a position Tuesday opposing AEG's bid for special state protection against environmental lawsuits. But AEG revealed that his wife had been seeking hundreds of thousands of dollars in consulting fees from the company's affiliate in Shanghai, posing a potential conflict of interest.

Antonovich abruptly abandoned his proposal Tuesday, canceling the vote and handing AEG a victory.

The company has become increasingly aggressive in its arguments for the $1.2-billion stadium, putting pressure on state lawmakers to provide relief before their recess Sept. 9. Although the City Council gave a preliminary OK to the project's financing plan earlier this month, AEG threatened to abandon its stadium plan unless state lawmakers approve legislation that would limit the company's exposure to "frivolous" lawsuits.

AEG Chief Executive Tim Leiweke has also lashed out at Majestic Realty, a developer with plans for a City of Industry stadium that has been quietly trying to undermine the downtown plan in Sacramento and elsewhere.

Leiweke said Tuesday that his company's recent assertions, coming just days before the Legislature goes into recess, were an effort to respond to critics. "Everyone is taking free shots," he said in a statement. "Are we trying to set the record straight so that those that are questioning our intentions ... are called out? Yes."

The flap with Antonovich provided yet another glimpse of the extensive reach of AEG, which was formed in 1995 to build Staples Center and has grown into a $10-billion entertainment and real estate behemoth. Even before AEG disclosed the information on Antonovich's wife, the company was known for its prowess in bankrolling campaigns, influencing public policy and directing millions of dollars into local charities.

With an extensive retinue of lobbyists and community organizers, AEG sent hundreds of construction workers, high school football players and hospitality industry workers to state and local hearings on the stadium, which has a planned opening date of 2016. The company also has retained Martin Ludlow, a former Los Angeles city councilman convicted five years ago in a felony campaign finance case, to build support among neighborhoods and youth sports teams.

Working in the opposite direction last week was Antonovich, who proposed Friday that his colleagues oppose AEG's push in Sacramento. Antonovich argued that the company should not be allowed to shorten the period for environmental challenges to its project unless similar accommodations were made for public construction projects, such as schools, hospitals and libraries.

That drew a challenge from AEG's lawyer James R. Sutton, who sent county officials a letter saying Antonovich's wife, Christine Hu Antonovich, was negotiating a financial settlement with an AEG affiliate related to work she performed in 2008. Sutton told the county's lawyers that Antonovich should not vote on the matter until they determined whether a conflict existed.

"If you have a conflict, you can't introduce a motion that affects your personal financial situation," said Sutton, who forwarded his letter to the state Fair Political Practices Commission, which issues fines to politicians who violate conflict-of-interest rules.

Antonovich said he was "blindsided" by AEG's allegation and disputed the notion that there was a connection between his proposal and his wife's consulting work. "My wife was not involved in football. She was in the entertainment industry. She was a famous actress in China," he said. He said he had not informed his staff or county lawyers that his wife had a financial dispute with AEG.

Attorneys for both sides said Hu Antonovich introduced AEG Business Management Consulting, a Shanghai-based company focused on developing sports venues, to officials in China. Two years later, she informed the AEG affiliate that she was owed more than $200,000 for that work, a claim Sutton said came "out of the clear blue sky."

Mason Yost, Hu Antonovich's attorney, said AEG's Shanghai entity believed its chances of breaking into the Chinese market would be "enhanced by having her on board." Since then, the two sides have been in negotiations over her compensation, he said.

"She has never had anything to do with any company that has any projects in Los Angeles County," he said.

Robert Stern, president of the Center for Governmental Studies, said he was not certain whether Antonovich's actions ran afoul of state ethics laws. But he said Antonovich was not the best choice to lead the charge against AEG.

"I certainly would have advised him not to take the lead on this. It looks bad," Stern said. "It looks like there's another motive other than good government."

Sutton said AEG doesn't believe there was a binding agreement to pay Hu Antonovich, a U.S. citizen born in Dalian, China. Nevertheless, AEG has been talking to her about a settlement "just to put this matter behind them."

Whether Antonovich's motion would have passed is unclear. Supervisor Don Knabe said he "had some questions" about the proposal. Supervisor Gloria Molina said she would have voted to keep the state's environmental laws "intact," a sign that she was sympathetic to Antonovich's position.

Supervisor Mark Ridley-Thomas was absent and Supervisor Zev Yaroslavsky had no comment.

david.zahniser@latimes.com

garrett.therolf@latimes.com

Times staff writer Abby Sewell contributed to this report.

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