Donor Tells of Campaign Gifts

Contractor in Casden ethics probe told grand jury he gave $10,000 to Kathleen Connell's mayoral campaign.

By Anna Gorman and Patrick McGreevy, Times Staff Writers

A termite contractor made $10,000 in illegal contributions to a Los Angeles mayoral candidate after an executive in a prominent real estate firm solicited the donation, according to transcripts of Los Angeles County Grand Jury testimony reviewed Tuesday by The Times.

The contractor testified that John Archibald, vice president of Casden Properties LLC, later told him not to worry about an investigation of the contributions by the city Ethics Commission. At worst, Archibald said, according to the contractor's testimony, the city might impose a fine.

Archibald and 13 of the Casden firm's subcontractors were indicted last month on charges of conspiring to illegally funnel more than $200,000 in campaign contributions during 2000 and 2001 to Los Angeles City Council members Jack Weiss and Wendy Greuel, City Atty. Rocky Delgadillo and Kathleen Connell, who was a candidate for mayor. Archibald and the subcontractors have pleaded not guilty to the felony charges and are free on their own recognizance.

Prosecutors said the Casden firm, which has a $100-million Westwood development pending before the city, had sought to buy influence with the contributions. Larry J. Higgins, owner of a Sun Valley termite-control company, testified that he had the impression that he needed to make the political donations as a condition for getting a contract from the Casden firm. He has been granted immunity from prosecution in exchange for his testimony.

The four volumes of transcripts do not contain evidence that Archibald explicitly told subcontractors to illegally launder political contributions. But prosecutors say the grand jury testimony shows a conspiracy to subvert Los Angeles' political system by collecting contributions from employees and relatives, then reimbursing them to hide the source of the money.

According to the transcripts, at least five contractors told investigators that Archibald or another Casden employee asked them to make contributions that prosecutors say were illegal.

Los Angeles County Dist. Atty. Steve Cooley has said that Alan Casden, a prominent Southern California real estate developer who had tried to buy the Los Angeles Dodgers, is a target of the investigation, though he has not been charged. One of Casden's attorneys, Thomas Nolan, said Cooley does not have any evidence of wrongdoing by Casden or Archibald.

"Our position is that the grand jury transcripts support what we have said all along, that neither Alan Casden nor his companies have ever violated campaign contribution laws, and further that John Archibald should never have been indicted," Nolan said.

Robert Corbin, an attorney for Archibald, said he had not reviewed the transcripts. "John Archibald is innocent, period, as will be seen at trial," Corbin said.

During secret proceedings in November, grand jurors heard testimony from 51 witnesses during eight days of testimony. At least 30 people testified that they were reimbursed for making donations, the transcript shows. Under the City Charter, individuals can contribute no more than $1,000 for candidates for citywide office and $500 for candidates for the Los Angeles City Council.

The key witness appears to be Higgins, who told grand jurors that he bid for a $211,000 contract to fumigate an Anaheim apartment building owned by Casden's firm in December 2000. Higgins told the grand jury that just as the Anaheim contract was about to be signed, Archibald called him and said there were a "couple of things" they had to do first.

Higgins said that included collecting $10,000 worth of contributions from employees for the Connell campaign. Higgins testified that he raised the issue of reimbursing employees and Archibald suggested extra vacation or holiday pay, according to the transcript.

"He talked about reimbursing them in some way or another," Higgins testified, "but he didn't specifically say, 'You have got to reimburse your employees.' "

Higgins said he told Archibald that he was not going to collect the contributions before he had a down payment on the Anaheim job. Higgins testified that Archibald gave Higgins a $37,000 check as a deposit.

After the Los Angeles Ethics Commission launched an investigation into the contributions, Higgins said, Archibald called him. Higgins testified that Archibald told him "not to worry about it, it's no big deal." After Higgins told Archibald that he had reimbursed some of his employees for the political contributions, Higgins testified that Archibald responded, "The Ethics Commission may fine you," according to the transcripts.

Higgins testified that at the request of prosecutors, he made a tape-recorded telephone call to Archibald in June. A transcript of that phone call was entered as evidence but not included with the transcripts.

"John Archibald is the linchpin of this conspiracy," Deputy Dist. Atty. Richard Ceballos told grand jurors in his closing argument. "Everything revolves around John Archibald. He controls it."

The plot was a "pre-designed, deliberate attempt" to evade election laws and to influence future decisions by city officials in favor of Casden Properties, Ceballos told the grand jury.

"The motives are simple," he said. "For John Archibald on behalf of Casden Properties, it benefits Casden properties and its influence, its future influence, on these city officials and other candidates. And how are these businesses benefited? Well, simple. They are benefited because they get future business with Casden properties."

Some of the contractors have admitted to The Times that they unknowingly violated campaign finance rules, but they have strongly denied being part of a money-laundering conspiracy.

Among the evidence submitted to the grand jury was an eight-page list seized from Archibald's Simi Valley home. It breaks down the $201,750 in contributions for Connell's campaign made by companies and individuals. The district attorney's office has not released the amount of alleged contributions to Weiss, Delgadillo and Greuel.

Dozens of friends, family members and employees testified that the subcontractors asked them to contribute money to campaigns and that they were reimbursed for those donations. Many of the witnesses were given immunity to testify in front of the grand jury.

Several of the indicted subcontractors rely on business from Casden Properties. Among those is Gerald Lundgren, who heads Freedom Paint and faces a trial on conspiracy charges. Casden projects bring in about $800,000 to $1 million each year to the company, roughly 50% of its annual business, according to Stacey Lundgren, the defendant's daughter. She testified that her father asked her in January 2001 to make campaign contributions and that he told her, "Casden is doing a donation. He asked us to donate."

"And I guess because we do so much work for them," she testified, "my father was willing to do the donation."

Prosecutors told grand jurors that Archibald bundled the contributions from subcontractors and gave them to the campaigns "with a notation that said contributions were collected by Casden." The treasurer for Connell's mayoral campaign testified that she didn't notice Casden's name written on campaign donor cards.

Ed Hutcherson, one of the indicted subcontractors, told investigators that he had been to a lunch meeting with an unidentified Casden employee and five to six other subcontractors, the transcripts said. The Casden employee asked that the contractors support various candidates for Los Angeles city offices, the transcripts said. Hutcherson told the investigator that he agreed to collect the donations and made reimbursements.

Another one of the defendants, William Isaac, told investigators that Archibald said he needed Isaac to raise $5,000 for Connell's campaign. Isaac gathered donations from his wife and his employees and then reimbursed them, according to the transcripts. After investigators began asking questions, Isaac said he asked Archibald, "What have you gotten us into?" according to the transcripts. Archibald responded not to worry, the investigator testified.

The indicted subcontractors include Anthony Boozel of the concrete company TBCI; Brian Larrabure of framing company BLF; Laszlo Furdek of Cal State Steel; Jerry Hein of Desert Roofing; Bruce Shaffer of Starlight Showers and Doors; James Gates of Capital Drywall; Randall Carpenter of Design Masonry: Gerald Lundgren of Freedom Paint; David Mercer of HMK Engineering; William Isaac of Isaac Construction; Ed Hutcherson of Seems Plumbing; Simon Rubin of Simon's Electric; and Isaac Zaharoni of Zaharoni Industries.

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