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

April 29, 2011 |  1:14 pm


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.


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