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Fines recommended in L.A. campaign money laundering case

February 14, 2013 | 10:30 am

This post has been corrected. See the notes below for details.

The head of a company that has managed apartments for thousands of Los Angeles' neediest residents has agreed to pay a $170,000 fine stemming from allegations that he engaged in a decade-long scheme to launder campaign contributions, according to city documents.

In all, the Los Angeles Ethics Commission was scheduled to consider $185,000 in fines Thursday involving companies retained by the affordable housing developer Advanced Development & Investment Inc. The FBI opened an investigation into ADI's financial dealings.

[For the Record, 11:57 a.m. Feb. 14: An earlier version of this post stated that the Los Angeles Ethics Commission was scheduled to consider $200,000 in fines involving companies retained by Advanced Development & Investment Inc. The figure is $185,000.]

The commission began investigating after The Times reported that subcontractors of ADI said they had been pressured by the company to make contributions or risk losing additional work on taxpayer-subsidized projects. As a result of the probe, the agency has recommended a $170,000 fine for Peter Barker, president of Barker Management, Inc., an Orange County-based property management firm retained by ADI.

Ethics investigators contend that over a dozen years, Barker reimbursed his employees or their spouses for 68 contributions given to an array of city campaigns, including the mayoral bids of City Controller Wendy Greuel, City Councilman Eric Garcetti and Councilwoman Jan Perry. That practice, known as campaign money laundering, allowed Barker to bypass city laws restricting the size of campaign donations.

Barker reimbursed 11 mayoral contributions -- six for Greuel, three for Garcetti and two for Perry. The city did not find any wrongdoing by the politicians who accepted the money.

Other beneficiaries of Barker's laundered contributions were Council President Herb Wesson, Council members Bernard Parks and Ed Reyes and council candidate Jose Gardea, who is currently running to replace Reyes, according to the report.

The commission also recommended a $15,000 fine for another ADI subcontractor, American General Contractors. Investigators allege that American General reimbursed employees and relatives for six $500 contributions made to Perry between November 2008 and January 2009, before she launched her mayoral bid.

[For the Record, 11:57 a.m. Feb. 14: An earlier version of this post stated that the Los Angeles Ethics Commission recommended a $30,000 fine for American General Contractors. The figure is $15,000.]

"When interviewed by [ethics] commission staff, American General and Barker each admitted that they reimbursed individuals for contributions made to city candidates, stating that they had been pressured by an ADI representative to satisfy specific political fundraising requests," the report to the commission states.

The report did not name the ADI representative. Barker told investigators that the person threatened to terminate his company if it failed to meet ADI's political fundraising requests. After ADI ran into legal troubles, Barker continued to reimburse his employees for their contributions on his own, according to the report.

ADI, which is now in receivership, has already agreed to pay the city a $165,000 fine.


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-- David Zahniser at Los Angeles City Hall