Did developer-linked donations violate campaign finance laws? State watchdog agency will investigate

A state agency that enforces campaign finance laws has launched an investigation in response to a Times report on political donations connected to the developer of a Harbor Gateway apartment project.

A spokesman for the Fair Political Practices Commission said the agency opened its probe after receiving a letter from a Times reader, who pointed to the newspaper’s investigation into donors with ties to Samuel Leung, developer of the 352-unit Sea Breeze project. The reader asked the agency to look into whether donors mentioned in the story had violated campaign finance laws.

FPPC spokesman Jay Wierenga declined to provide further details, saying that the commission does not comment on open investigations.

The Times reported in October that donors linked directly or indirectly to Leung gave more than $600,000 to support 11 L.A.-area politicians as Sea Breeze was being reviewed at Los Angeles City Hall. Several people who are listed as campaign contributors said they could not remember making those donations or denied doing so.

Campaign finance experts said those responses raised questions about whether someone else had provided the money, a practice that would violate campaign finance laws.

The Times also reported that a Chatsworth resident who has ties to a Leung business associate said she had been reimbursed for at least one donation by a relative. The practice of reimbursing donors, also known as campaign money laundering, is prohibited because it obscures the true source of funding and can be used to circumvent limits on political giving.

The FPPC takes all complaints under an initial review, but opens an investigation only if there is sufficient evidence of a possible violation of the California Political Reform Act, Wierenga said. That law regulates campaign finance, financial conflicts of interests for public officials, and other governmental ethics issues. 

The agency can impose fines of up to $5,000 per violation. In the past, it has worked with the Los Angeles City Ethics Commission to investigate local cases, including a 1993 money laundering case that resulted in a nearly $900,000 penalty for a shipping company.

Neither Leung nor his representatives responded to requests for comment Wednesday. Approached by reporters last year, Leung said he did not reimburse any donors and declined to discuss the matter further.

Allegations surrounding the political contributions are also under review by the office of Dist. Atty. Jackie Lacey. The Los Angeles City Ethics Commission, which enforces campaign finance laws at the city level, declined to comment on whether it too was investigating the donations, saying that the City Charter and administrative code require that its investigations be kept confidential.

“This is an important safeguard that helps to ensure due process for those affected by our laws,” Deputy Executive Director David Tristan said in a statement. “However, both laws also require us to review all complaints and conduct investigations into alleged violations. We take that mandate very seriously.”

Political donations from real estate developers have come under renewed scrutiny in Los Angeles. On Tuesday, five members of the Los Angeles City Council proposed a ban on political donations from developers during and shortly after city reviews of their building projects.

Several candidates vying to unseat incumbents in the March 7 election have pledged not to take contributions from developers. And concern about the political influence of developers has been a recurring theme in the campaign for a controversial ballot measure that would temporarily restrict development.

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