Developer indicted in connection with alleged illegal campaign contributions to Villaraigosa, ex-councilman

The developer of a controversial Koreatown hotel has been charged with illegally funneling $26,000 in contributions to the campaigns of Los Angeles Mayor Antonio Villaraigosa and former Councilman Jack Weiss, according to a five-count grand jury indictment unsealed Friday.

Prosecutors for Los Angeles County Dist. Atty. Steve Cooley contend that 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, who was then running for city attorney. Hugh then reimbursed the employees with cash, an illegal practice known as “campaign money laundering,” the indictment said.

Both Hugh and Lee pleaded not guilty to one count of conspiracy to commit campaign money laundering, two counts of filing a false instrument, one count of forgery and one count of identity theft, said Deputy Dist. Atty. Max Huntsman with the Public Integrity Division.
 
Neither Villaraigosa's nor Weiss' campaign was aware of the scheme, Hunstman said. Hugh provided phony documentation to each campaign, including false signatures and one instance of identify theft, prosecutors said.

"We're confident that we're going to be able to demonstrate that they made a mistake regarding Mr. Hugh and we look forward to defending him vigorously," said Hugh's lawyer, Ken White.

Hugh’s company, CIC Group, won City Council approval to develop the Emhurst Hotel in 2007. The Planning Commission had recommended that the council reject the proposal after a city planner warned that the project’s 16- and 21-story towers were so large that they would overwhelm the surrounding neighborhood. But the council ignored that recommendation and Villaraigosa backed the council, not his appointees on the planning commission.

Months later, Hugh co-hosted a June 2008 fundraiser for Villaraigosa’s reelection campaign. In November of that year, the mayor went to the groundbreaking for the Emhurst, saying the project “symbolizes the economic hope and promise of Koreatown.”

Hugh spoke repeatedly with Villaraigosa aides before and after that fundraiser, according to documents obtained by The Times. Former Villaraigosa Deputy Chief of Staff Jimmy Blackman scheduled at least five meetings with Hugh between June 2008 and July 2009, according to his appointment calendar. Blackman is now chief of staff to Councilman Dennis Zine.

The city allowed Hugh’s company to have 242 rooms instead of the 173 normally permitted by city regulations and 260 parking spaces instead of the 355 required, according to reports prepared on the project. However, the project was never built, said Ben Reznik, who served as CIC Group's lawyer and lobbyist at City Hall.

Hugh was released on $100,000 bail. Lee was released on her own recognizance.

ALSO:

Villaraigosa orders 42 furlough days for workers who rejected labor deal

Mayor unveils $6.9-billion budget

-- David Zahniser at Los Angeles City Hall

Photo: Antonio Villaraigosa. Credit: L.A. Times

Comments

[Duane]

And Tony Villar knew nothing about this? Puhleeze! There is absolutely no sense in a developer giving campaign money to a candidate unless the candidate knows where it came from.

[James McCuen]

Interesting. They go after the 'small fry' but hands off CIM Group, AEG, and even a slightly 'larger fry' Pacifica Ventures in Eric Garcetti's district. All of these companies and their interaction with elected officals merit investigation. And Cooley could do it since he is a lame duck that is going to retire.

Mr. Cooley, why don't you grow a backbone and show some leadership and honor?

[DoneWithTheMan]

If you actually believe that Villaraigosa didn't know about any of this; I have a really big bridge in New York or some lovely vacation property in Florida I'd be happy to sell you.

[Sam]

You wanna know what's really wrong with our city? This:
"The Planning Commission had recommended that the council reject the proposal after a city planner warned that the project’s 16- and 21-story towers were so large that they would overwhelm the surrounding neighborhood."
- If we can't build a 21-story tower in Koreatown, where can we build one? The effective ban on towers is absurd.

[Leilani24]

It's bad enough the things he admits doing - like helping illegals who ARE NOT US CITIZENS.

[kuruc]

LA=BELLx100million.

[Luis Alvarado]

Villaregosa, the product of L.A. Unions and Democrats. L.A. Voters belived their lies and this is the final result. "Alleged" corruption, secret deals and the people of L.A. lose.

I'm not saying vote Republican, all I'm saying is let's consider ALL candidates for their ability to lead and stay clean. Regardless of party. In the next election we should open our eyes before we vote.

[Public Servant54]

I hate living in this corrupt city!

[Look in the Mirror]

It's amazing how Villaraigosa's consultant always painted his opponents as corrupt with indictments or jail right around the corner. He did this to Hahn and to Pacheco - yet neither of them were ever found guilty of any campaign wrong doing. Villaraigosa, on the other hand, has received record fines and continues to be exposed. It is a lie if Antonio says he knew nothing - Skelton and Villaraigosa knew exactly what was going on. Skelton didn't say anything because that is how he gets paid - by illegal money laundering. As for Antonio lying, this has become his MO - in private and public life.

[Jean Clelland-Morin]

The "small fry" comment by James McCuen, was my thought when logging on. Our prisons are stuffed with the vulnerable while the real criminals breath freely. There are a lot more Bernie Madoffs out there. // Jean Clelland-Morin

[Care]

And you will vote for Villaraigosa's latest school board candidate Luis Sanchez? He's had the same campaign contributions from developers, and is out to privatize public schools - including handing over the tax payer/eminent domain funded new constructed school property deeds just like the one Yolie Flores gave away to Ana Ponce's for-profit charter in Silverlake. Vote for Bennett. End the corruption of the mayor's influence in our schools!