2001 Hahn Donor Gets $270,000 Ethics Fine
Levy is panel's highest against an individual. Mayor denies knowing funds were tainted.
The Los Angeles Ethics Commission on Tuesday imposed a
record $270,000 fine against Westside developer Mark Alan
Abrams after the panel concluded that he hatched a scheme
to launder political contributions to benefit James K.
Hahn's 2001 mayoral campaign and the campaigns of two Hahn
The fine is the largest penalty assessed against an
individual by the ethics panel in its 15-year history.
"The actions of Mr. Abrams here really strike at the heart
of democracy," said Gil Garcetti, president of the Ethics
Commission. "It's simply not right."
No one has said that Hahn knew the contributions were
tainted, but the case drew new criticism from his opponents
four weeks before he stands for reelection.
The panel found that Abrams committed 48 violations of
campaign finance laws involving $90,000 in political
contributions, many of them to campaign committees for
Hahn, City Councilman Tony Cardenas and former Councilman
The violations included charges that Abrams reimbursed
$28,500 in contributions made in the names of employees,
associates and others, a practice known as political money
laundering. Many of the checks also exceeded the city's
limit on contributions.
Some commissioners voiced frustration that Tuesday's action
failed to answer whether Abrams received anything from Hahn
in return for raising money for his campaign.
"The one piece that is missing in all of this that we don't
know is what did Mr. Abrams receive in return for his
investment," Commissioner Sean Treglia said. "It's not
germane to this hearing, but I can guess, and I can guess
that further hurt the public's interest because it created
an unfair playing field."
The Times has reported that Hahn visited Abrams' office
twice, and the mayor's staff helped Abrams receive
high-level City Hall access on a troubled
multimillion-dollar development near Bel-Air.
Kam Kuwata, a campaign spokesman for the mayor, said
Tuesday that Abrams received no special treatment and that
the mayor was not aware any of the contributions were
"The mayor had no knowledge of it and he believes that if
anyone did anything illegal they should be punished," he
However, Ace Smith, a spokesman for mayoral challenger
Antonio Villaraigosa, said the case is troubling. "This is
just one more indication of how deep-seated corruption is
in the Hahn administration," Smith said.
Commissioner Dale Bonner, who voted for the penalty,
questioned whether the fines were excessive compared to
what the panel has fined elected officials. "On the
surface, it sounds like an exorbitant amount to me," he
The largest Ethics Commission fine against an elected
official was $79,000 levied in 2002 against Council
President Alex Padilla for campaign finance violations. The
largest fine ever imposed by the panel was a $400,000
penalty against the shipping firm Evergreen America in 1993
for political money laundering.
Nathan J. Hochman, an attorney for Abrams, argued Tuesday
for a fine of $90,000. Hochman questioned the panel's 4-0
decision "to basically set the equivalent of the world
record in this case with a $270,000 maximum fine."
In addition to money laundering, the panel found that
Abrams solicited and received a $25,000 contribution from
an associate for an independent expenditure campaign
supporting Hahn, in violation of the $500 limit on such
That money went to a mailer criticizing Hahn opponent
Antonio Villaraigosa as an "East Los Angeles liberal-fringe
Democrat" who was soft on gang murderers.
It is uncertain whether the city will be able to collect on
the fine. Hochman said some of Abrams' finances are
controlled by a court-appointed receiver. Abrams and a
partner, Charles Elliott Fitzgerald, are key figures in a
federal investigation of alleged mortgage fraud, and the
district attorney's office is also reviewing Abrams'
fundraising for possible criminal violations.
Abrams did not attend Tuesday's hearing.
Instead, he filed a waiver in which he consented to the
commission taking action based on testimony of employees
and associates. He did not contest the allegations, but did
not admit them, either. An admission of guilt could
potentially be used in a criminal prosecution.
At the hearing, Commissioner Bill Boyarsky, a former Times
city editor, asked investigators to elaborate on Hahn's
meetings with Abrams, but the investigators declined to
provide more details.
He also noted that the investigators' report said a woman
who worked for Abrams told them that her boss and a top
official in Hahn's 2001 campaign, Troy Edwards, appeared to
have discussed the attack mailers aimed at Hahn's opponent.
Under the law, groups paying for independent expenditures
cannot coordinate their efforts with political
"Did you pursue that?" Boyarsky asked investigator Dominic
Berbeo. "Were you able to find out whether Mr. Edwards
coordinated this effort?"
"That would be something that we would pursue," Berbeo
said. "But I don't think we are allowed to discuss that in
the context of this particular hearing."
Hahn said last Friday that his campaign did not coordinate
with Abrams on the independent expenditure.
Meanwhile, the Ethics Commission voted Tuesday to approve
$8,250 in fines against six Abrams associates who admitted
being reimbursed by Abrams for contributions.
And in a separate case, the panel voted Tuesday to levy
$79,000 in fines against subcontractors and associates of
Casden Properties for their involvement in another
political money laundering scheme.
See the article on Los Angeles Times website