Villaraigosa to Return Florida Donations

By Richard Fausset and Jennifer Oldham, Times Staff Writers

In the face of escalating pressure over questionable out-of-state campaign contributions, mayoral candidate Antonio Villaraigosa decided Thursday to return thousands of dollars to employees of two related Florida companies.

For a second day in a row, the city councilman and his campaign manager declined to provide details about what prompted at least 20 employees of the gift-shop companies and their relatives to give $45,000 to a mayoral candidate in Los Angeles.

Some employees at the two companies have offered reasons for their donations, but others have been unable or unwilling to explain them.

But a Los Angeles lobbyist said Thursday that the president of one of the companies, Sean Anderson, had told him that he planned to compete for multimillion-dollar concessions contracts at Los Angeles International Airport.

Clark Davis, a lobbyist who has worked with Anderson in the past, said, "Sean told me that … he would be back seeking airport contracts" as soon as a non-competition agreement expired in December 2004.

Anderson and Art M. Gastelum, a lobbyist who has represented airport concessionaires, met with Villaraigosa for dinner in September 2004.

Villaraigosa said Thursday that they talked about his candidacy for mayor but had not discussed the airport.

"I meet with people all the time," he said.

Earlier this month, Villaraigosa led an effort by several councilmen to review a city Airport Commission decision to extend some airport concessions contracts. If the contracts are not extended, other companies could bid on them.

Ace Smith, Villaraigosa's campaign manager, said Thursday that the campaign was reviewing the contributions, but had found no evidence of wrongdoing. However, Smith said, Villaraigosa would return the donations to employees of Travel Traders LLC and S.E. Florida Investments "out of an abundance of caution."

Hahn has said in the past that candidates do not always know the full stories behind the donors who give them money.

"It may turn out that there's nothing wrong or illegal here," he said at a Thursday news conference in West Los Angeles. "But certainly the facts warrant an investigation."

Before Villaraigosa's decision to return the donations, lawyers for the Hahn campaign formally asked the city Ethics Commission to investigate possible laundering of political contributions.

It is not illegal for employees of a company to donate to a political campaign. But if a company reimburses them for their donations, that is laundering, an illegal evasion of the city's contribution limits. None of the employees has said that the companies reimbursed them.

Hahn campaign strategist Kam Kuwata said the mayor was still expecting a full investigation.

"If there was some shenanigans on how money was raised," he said, "we believe the people of Los Angeles deserve a full airing of what took place."

Villaraigosa raised $45,000 from people who work at the two associated Florida companies and their relatives through April 2, when the last reporting period ended.

Some of the employees, who donated the maximum $1,000 per election, have given questionable explanations in interviews with The Times and the Torrance-based Daily Breeze, which first reported questions about the donations.

Two employees said Villaraigosa's support from former Lakers star Earvin "Magic" Johnson inspired them to donate, but both wrote their checks before Johnson's April 11 endorsement.

A Times reporter visited the Travel Traders offices Thursday on the fifth floor of an upscale office building near Miami International Airport. Executive assistant Lisa Edouard donated $1,000 to Villaraigosa in the first round of the mayoral election and $1,000 for his runoff campaign.

When asked about her donations, she responded, "I'm not available for comment right now."

The only employee who would discuss her donation Thursday was Anne M. Petit-Phar, an accounts receivable manager. She said in a telephone interview that she heard about Villaraigosa from friends and family in Los Angeles and "the corporate office."

She declined to comment further.

Villaraigosa is facing questions similar to those he has lobbed at Hahn. Two prominent Hahn donors have been accused of orchestrating schemes to launder contributions to his 2001 campaign, and one has been fined.

Anderson, the president of Travel Traders, has a long history with the airport's lucrative concessions contracts. He is the former head of W.H. Smith's North American operations. The company once had the largest contract for gift shops and newsstands at the airport.

During his tenure, Anderson and other company employees were generous backers of Hahn's first mayoral campaign and his fight against San Fernando Valley secession.

But Anderson appears to have switched sides.

He met with Villaraigosa and Gastelum on Sept. 27, 2004. The next day, Villaraigosa collected $10,000 from S.E. Florida Investments employees and $3,000 from their relatives.

A few days after Anderson made the second of two $1,000 donations to Villaraigosa, the councilman and three others asked for a review of an Airport Commission decision to extend existing concessions contracts at the airport.

Smith denied that Villaraigosa was influenced by the donations.

Concessions contracts at the airport are worth millions. One airport concessionaire, Airport Management Services, had sales of $55.3 million in 2004.

Davis, a City Hall lobbyist, worked closely with Anderson when he was chief executive of W.H. Smith.

Anderson and several other W.H. Smith executives left the firm to form Travel Traders, which bought W.H. Smith's hotel shops business. Anderson agreed not to compete with W.H. Smith until after December 2004, Davis said.

To win Los Angeles International Airport concessions, Davis said, Anderson realized that he would need to form a partnership with a firm that had experience in the airport retail business.

Davis said Anderson chose Miami Beach-based D.T.R. The president of that company, John Garner, gave $1,000 to Villaraigosa on Feb. 25.

D.T.R. is owned by Bernard Klepach and is a subcontractor for the Hudson Group, which has the gift shop and newsstand concession at the airport.

Klepach, who is listed on campaign records as president of Duty Free Air & Ship Supply, gave Villaraigosa $1,000 on Sept. 28, 2004 â€" the day after Anderson met with the councilman for an hour and a half. Three of his employees donated $1,000 each to Villaraigosa on Feb. 25.

Villaraigosa held a news conference at an Eagle Rock school Tuesday to tout his education record and announce the endorsement of City Council President Alex Padilla, who supported Hahn in 2001.

"There is no limit to what we can do when we decide to work together," Padilla said, "but working together doesn't seem to be Mayor Hahn's style."

At the event, Villaraigosa said Hahn had no standing to attack him about campaign donations.

"Frankly, when you live in a glass house, you need to take real caution before you start throwing rocks," he said.

Villaraigosa said Hahn had not returned the money donated by Westside developer Mark Abrams and his associates, although the Ethics Commission had fined Abrams and some associates for laundering contributions.

Kuwata said those incidents were fully investigated.

"And what did the investigation find? That Jim Hahn nor any of his people were involved," he said. "So, we should have a similar kind of investigation and make sure that Mr. Villaraigosa has not done anything wrong."

Records show that Villaraigosa also has raised money from employees at another airport concessions company. Villaraigosa collected $5,000 from employees of Franklin & Associates, a Georgia firm, and a related company in September and October. Relatives of Franklin & Associates employees donated $2,000 to Villaraigosa.

Company Chief Executive Officer David Franklin said Thursday that he had never met Villaraigosa and that he contributed to Hahn's campaign in 2001. He said there was nothing improper about his latest donation.

"Last time, I gave Jim Hahn $1,000. I support most of the, you know, political thing. There's nothing odd about this," said Franklin, who said he had read that Villaraigosa was leading Hahn in the polls.

Franklin said he sold his LAX franchise of Body Shop skin-care stores in 2003 and does not have any business pending at the airport.

"Would I like to? Yeah," Franklin said. "But there are a lot of things I'd like."

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Times staff writers Ted Rohrlich, Daniel Hernandez, Jeffrey L. Rabin, John-Thor Dahlburg and Times researcher Maloy Moore contributed to this report.

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