The Los Angeles Ethics Commission Tuesday fined a real estate company $71,000 for violating the city’s political campaign finance laws.
According to commission documents, Hillcrest LLC admitted violating the Los Angeles City Charter by making contributions to a city council candidate’s campaign using other people’s names and exceeding the city’s individual contribution limits during the 2015 election.
City law prohibited an individual person from contributing more than $700 to a Los Angeles City Council candidate in 2015.
The penalties were assessed against the real estate company and not just one person, the documents state. However, Ethics Commission officials said Bruce Makowsky, a Los Angeles real estate developer and the majority owner of Hillcrest, solicited individual campaign donations of $700 on behalf of a candidate under the company’s name.
Ronald Richards, the attorney representing Makowsky in the case, said the offense was deemed a “strict liability” and could not be defended by arguing someone had no intent to violate the law.
“You are liable if actions occur that violate the law regardless of someone’s state of mind,” Richards said in a written statement. “The company is very happy and hopeful that this matter can be put behind them. The resolution strikes a fair balance between the parties.”
The commission voted unanimously to approve the fine.
According to the Ethics Commission documents, city staff responding to a whistleblower complaint found evidence that Makowsky met with Joan Pelico at a party in December 2013. At the time, Pelico was the chief of staff for City Council District 5 and had recently announced her intent to run as a candidate for Council District 4 during the 2015 election.
On April 14, 2014, Makowsky contributed the maximum $700 to Pelico’s campaign committee. Later, he asked his executive assistant to request additional $700 contributions from employees and business associates of Hillcrest LLC and to tell them that they would be reimbursed, according to the commission.
In response to that request, 10 people associated with Hillcrest provided $700 personal checks payable to Pelico’s campaign, which made the total donation more than $7,000, commission documents state.
“This is a textbook case of money laundering,” Commission President Melinda Murray said.
Richard Platel, the commission’s director of enforcement, the company has no other enforcement action history against it, and the firm saved commission resources and time by entering into the settlement stipulation.
Platel said everyone involved in the investigation cooperated with commission staff, including the Pelico campaign and “many other” people, but he said he still recommended the maximum penalty.
“This kind of conduct has to stop, and the way to do that is to enforce the maximum penalty,” he said.
Hillcrest LLC business funds were used to reimburse each of the 10 contributors, but Pelico’s campaign was never informed that Hillcrest LLC was the true source of the contributions and no evidence was found that would indicate that Pelico knew the contributions were reimbursed, according to the commission’s documents.
Makowsky stated that Pelico asked him to contribute to her campaign, informed him of the campaign contribution limits and encouraged him to find others to contribute, according to the documents.
Pelico told the Los Angeles Times on Friday that when investigators first brought the issue to her attention, she was “pretty pissed off.”
“It goes against everything I stand for and believe in,” Pelico told The Times.
Pelico lost in the 2015 primary, finishing eighth out of 14 candidates in a race that ultimately led to David Ryu being elected.
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