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Donor fined for laundering L.A. campaign contributions

Peter Barker, the head of a property management firm, admits to laundering donations to several city campaigns, including three current mayoral bids. He says he was part of a larger scheme.

February 14, 2013|By David Zahniser and Laura J. Nelson, Los Angeles Times
  • Candidates for Los Angeles mayor, from left, Jan Perry, Kevin James, Eric Garcetti, Wendy Greuel and Emanuel Pleitez, square off in a debate.
Candidates for Los Angeles mayor, from left, Jan Perry, Kevin James, Eric… (Robert Gauthier, Los Angeles…)

A donor to the mayoral campaigns of City Controller Wendy Greuel and council members Eric Garcetti and Jan Perry was fined $170,000 on Thursday by the Los Angeles Ethics Commission for laundering dozens of campaign contributions.

Peter Barker, president of Orange County-based Barker Management, admitted he had reimbursed employees or their spouses for 68 contributions given to an array of city campaigns over 12 years, including the mayoral bids of Greuel, Garcetti and Perry. The practice, known as campaign money laundering, enabled him to bypass city contribution limits.

Barker Management provided building maintenance services for Advanced Development & Investment, a company that has received $29 million in city funding to develop apartment buildings for low-income residents. Barker told investigators that an ADI representative threatened to cut his company out of future contracts if he did not assist ADI's campaign fundraising activities, according to a report submitted to the commission.

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City officials said they found no evidence of wrongdoing by the recipients of the contributions, which included an assortment of L.A. politicians including council members and council candidates. Representatives of Greuel, Garcetti and Perry said the candidates complied with the law and already had turned over the laundered money given to their mayoral campaigns to the city's general fund.

Mayoral candidate Kevin James questioned whether the three city officials running for mayor did enough to vet their donors. The situation surrounding Barker and ADI, he said, shows there is a "culture of corruption" at City Hall.

A Times investigation in 2010 found that ADI and its subcontractors contributed at least $165,000 to city politicians. Four subcontractors told The Times they had been pressured by the company to make campaign contributions.

The L.A. Ethics Commission later opened an investigation. Federal investigators have been pursuing allegations that ADI defrauded taxpayers by illegally inflating invoices on its apartment projects.

Barker laundered a total of nearly $42,000 in campaign donations, investigators said. Greuel received nine of the contributions over six years. Four went to Perry and two to Garcetti. Even after ADI's legal troubles became public, Barker continued to reimburse employee contributions, according to a commission report.

ADI built about 40 affordable housing complexes across the city, in neighborhoods such as Echo Park, Lincoln Heights, Westlake and South Los Angeles. An outside assessment by a court-appointed receiver found "improper construction techniques" and "poor quality of construction materials" at multiple ADI properties.

In a related case, the Ethics Commission fined another ADI subcontractor $15,000 on Thursday. American General Corp., a construction company, admitted to reimbursing employees and relatives for six $500 contributions made to Perry from November 2008 to January 2009, before she launched her mayoral bid.

American General representatives told investigators that they too had been pressured by ADI to "satisfy specific political fundraising requests," according to the commission's report.

"They told us that unless we made political contributions, we weren't going to get paid for our work," said Andre Hurst, who works for American General.

Other recipients of Barker's laundered contributions included council President Herb Wesson, Councilmen Bernard C. Parks and Ed Reyes and council candidate Jose Gardea, who is running to replace Reyes.

Barker's attorney, Stephen Kaufman, said his client had cooperated with investigators. "He is relieved to have this matter behind him," said Kaufman, who represented Perry, Greuel and Garcetti in prior campaigns.

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