Villaraigosa Donor Found Guilty of Money Laundering

Photo via The Office of the Mayor

This week the Los Angeles City Ethics Commission found Alexander Hugh, a real estate executive and a donor of Mayor Villaraigosa's re-election campaign, guilty of laundering money to the mayor. The Commission unanimously voted 4-0 to impose the maximum fine allowed under the law, $183,750, for campaign finance violations.

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The commission found that Hugh exceeded the $1,000 contribution limit for contributions to the mayor and made $18,000 in contributions under assumed names. Hugh was charged with 18 counts of making contributions under those names, and two counts of exceeding the contribution limits. The commission also stated that Hugh worked with his friend, Annette Lee, in his scheme by reimbursing her employees for giving $1,000 contributions to the mayor.

Hugh waived his right to an investigation by the commission and agreed not to dispute the facts of the case against him, but did not admit guilt.

Hugh's attorney asked the commission to impose a lesser fine. His attorney claimed Hugh faced financial hardship but would not answer questions concerning Hugh's net worth or cash flow, saying that information would harm Hugh's position in a civil case. The attorney also said that the fine would prevent Hugh from embarking on his retirement plans, which purportedly would include working with earthquake victims in Japan and Vietnam.

Before Hugh's acts of money laundering, Mayor Villaraigosa and the City Council approved one of Hugh's hotel projects. This is despite the fact the people Villaraigosa appointed to the Planning Commission did not support the project. The hotel was never built.

Villaraigosa will not return the laundered money. The Commission has agreed with Villaraigosa's claim that he did not know of Hugh's behavior.

But this is not the end of the Hugh saga. Hugh is also in hot water with the Los Angeles County District Attorney's office. He has pleaded not guilty to five felony counts, which include forgery and false personation, filing false documents, and conspiracy to commit campaign money laundering. Hugh will be back in court in late November.

Perhaps the only good thing about Hugh-gate is that it makes news. Hopefully this type of illegal behavior is still rare. Such behavior erodes the integrity of our city's elections.

Jessica Levinson writes about the intersection of law and government in Los Angeles every week. She is a Visiting Professor at Loyola Law School.

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