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L.A. Ethics Commission slaps developer with maximum campaign fine

October 11, 2011 | 12:37 pm

The Los Angeles City Ethics Commission on Tuesday fined a Koreatown developer $183,750 -– the maximum penalty allowed -- for his role in an alleged money laundering scheme carried out in support of Mayor Antonio Villaraigosa’s reelection campaign.

The Ethics Commission determined that Alexander Hugh collected $1,000 checks for Villaraigosa’s campaign from 18 contributors and then reimbursed each of those donors. That effort violated the city’s fund-raising law, which limits such donations to no more than $1,000 to a citywide candidate.

Hugh’s lawyer had asked for leniency, saying his client had contributed to the city’s economy by building “numerous” real estate projects and had suffered financial setbacks in recent years. That request did not persuade Commissioner Valerie Vanaman, who described the case as “egregious.”

“This is about as blatant a money laundering scheme as I think I’ve encountered to date,” she said.

Prosecutors said they had no evidence to show that Villaraigosa, who was reelected easily in 2009, had any knowledge of Hugh’s activities. Hugh took part in the mayor’s trade mission to Asia in 2006. The City Council approved a hotel project planned by Hugh’s company the following year and in 2008, Hugh raised money for Villaraigosa’s reelection.

Hugh did not contest the allegations against him but also did not admit wrongdoing.

Commissioner Marlene Canter asked Hugh’s attorney, Kenneth P. White, whether or not someone had asked Hugh to carry out his money-laundering activities. White refused to answer and said later that Hugh had deliberately made a choice not to seek a lower fine in exchange for “cooperating against someone else.”

“I understand that may be seen by the commission as a negative factor and not a positive one, but that was his decision,” White said.


Villaraigosa donor faces fines

Two accused of illegal contributions to candidates

Ethics Commission backs measure to bar contractors from contributing

-- David Zahniser at Los Angeles City Hall