Stakes Huge for Donors in Mayor's Race

City awards millions in building, concession and other work yearly. Most contributors have a financial stake in L.A. government.

By Jeffrey L. Rabin and Patrick McGreevy, Times Staff Writers

The Los Angeles mayoral candidates have attacked each other relentlessly in their runoff battle for taking tainted donations and have ominously questioned whether the donors received political favors.

The focus on contributors who want business from the city is no surprise because they play an enormous role in financing City Hall campaigns.

Hundreds of thousands of dollars have poured into the campaigns of Mayor James K. Hahn and Councilman Antonio Villaraigosa from individuals, businesses, labor unions, developers, engineering firms, towing companies, airport concessionaires and port tenants that do business with Los Angeles.

The airport, harbor, and water and power departments, alone award $1.3 billion annually. Concessionaires do hundreds of millions of dollars a year in business at LAX. And there are contracts for construction projects and myriad services.

Bob Stern, a campaign finance advocate who helped draft the city's political money laws, believes that most contributions in city elections are not given by partisans, but by people with a financial stake in City Hall.

"Most of the contributions are from people who are not friends, not relatives, but are people who want something from government: want access, want appointments, want decisions," he said.

Among the companies that have invested in the mayoral runoff: a food-and-beverage concessionaire at Los Angeles International Airport liked both candidates, donating $5,000 to each; an engineering firm doing work at Los Angeles International Airport pumped $25,000 into the race; and 21 attorneys at firms with city work have spent more than $44,000 in just the last month.

Besides the $4 million in contributions made directly to the candidates in the May 17 runoff, more than $3.2 million has been spent on independent efforts to promote Hahn or Villaraigosa.

Much of that comes from labor unions that represent city employees, whose pay is determined by the mayor and City Council.

The council banned city commissioners from raising money for candidates after prosecutors began last year to investigate whether the Hahn administration was rewarding donors with favors or contracts.

But Hahn's proposal to ban contributions from city contractors stalled in the City Council, although the city's Ethics Commission has backed the measure.

So the candidates, unwilling to disarm unilaterally, have continued to collect from contractors who want business from the next mayor.

The candidates have seen their images tarnished by allegations that some of their donors laundered their contributions, although both have denied any knowledge of wrongdoing by their supporters.

Ace Smith, the campaign manager for Villaraigosa, said it is not the acceptance of contributions from donors doing business with the city that is the problem, but whether favors are granted to the contributors.

Kam Kuwata, a Hahn campaign consultant, said, "I don't think there is anything fundamentally wrong with accepting contributions as long as decisions on contracts are made on the merits."

Some donations to the two candidates seem to have no philosophical foundation.

Take, for example, the recent donations of HMS Host, the Maryland company that sold $68 million in food and beverages last year to travelers at LAX.

HMS Host and a few of its executives from suburban Washington, D.C., sent $5,000 to Hahn's campaign on April 20.

The company and some executives sent an identical amount to Villaraigosa's campaign two days later.

Company officials did not return calls to explain the donations.

Stern has a name for that kind of political giving.

"It's called insurance, government access insurance," he said. "People are giving because of governmental business, not because they care who wins."

Hahn returned the HMS Host contributions late last month, a day after Los Angeles Dist. Atty. Steve Cooley announced a preliminary inquiry into $47,000 in contributions that Villaraigosa received from employees of two Florida companies and their relatives.

One of those companies, Travel Traders, is reportedly interested in obtaining a concession contract for gift shops and newsstands at the world's fifth-busiest airport.

In returning the checks, Kuwata said the mayor did not want to accept contributions from an airport concessions firm right after criticizing Villaraigosa.

"So there wouldn't be any questions, we decided to return them," he said.

HNTB, an international architecture and engineering company based in Kansas City, Mo., is another major airport contractor. It has city contracts for $35 million of work at Los Angeles International and Ontario airports. Representatives of the company have given $18,500 to Hahn and $6,500 to Villaraigosa.

Ed McSpedon, an executive vice president of HNTB, said he donated to Hahn and Villaraigosa because both have merit.

McSpedon said HNTB supports candidates who are good for the company and the community.

"Yes, we do business at the airport," McSpedon said, but added that is "a small part of what our company is about."

Hahn also received at least $7,000 from Alaska, America West, American, Delta, Southwest and United airlines and the Air Transport Assn. of America, which represents the airline industry.

"The mayor reached out to us and asked us to help host an event for him on behalf of the airlines," said Robert Dibblee, managing director of the association, which hosted a fundraising lunch.

Dibblee said the airline industry wanted to thank Hahn for his work in developing an $11-billion master plan to upgrade the airport.

Another major source of donations for the candidates are lawyers that do work for the city.

Attorneys from 21 law firms that have contracts have contributed more than $44,000 to the candidates in the last month alone.

Hahn received $13,700, including $9,650 from 18 attorneys and partners from Pircher, Nichols & Meeks, which has two city contracts worth $247,000.

Villaraigosa received $31,075, including $10,000 from 10 lawyers with Lewis, Brisbois, Bisgaard & Smith, which has three city contracts worth $1.59 million.

Land use and planning decisions also are approved at City Hall.

The largest individual supporter of Villaraigosa's candidacy is Richard Meruelo, a real-estate developer with extensive land holdings in Los Angeles, including property that the Los Angeles Unified School District had hoped to use for a new high school.

Including direct contributions and independent expenditures, Meruelo and his family have spent at least $220,000 to put Villaraigosa in the mayor's office.

Meruelo is not the only developer investing in the race.

A group that includes Legacy Partners is planning a hotel and residential development for the marquee corner of Hollywood Boulevard and Vine Street.

As early as Tuesday, the council is expected to vote on $4.8 million in subsidies for that project.

Villaraigosa received $3,000 last month from four Legacy executives.

Last summer, Related Cos. was selected to take the lead on a $1.2-billion project to remake downtown's Grand Avenue into a destination shopping and cultural district. Hahn has received $9,000 from the firm's employees; Villaraigosa has collected $1,000.

Forest City Residential West won City Council approval in March to extend the term on $28.4 million in financing to build apartments in South Park near Staples Center. Company executives have given $13,000 to Hahn and $1,500 to Villaraigosa.

Even representatives of the contractor that collects parking ticket fines have donated.

City officials, including Villaraigosa, have balked at a five-year extension of the contract with Affiliated Computer Services. They say that the company needs to reimburse Los Angeles for up to $23 million in parking revenue that the city contends it is owed.

Villaraigosa raised questions about the contract in February. Since then, his mayoral campaign has received $3,500 from six ACS executives.

One firm that is nowhere to be found on recent campaign contribution reports: Fleishman-Hillard.

In 2003, Fleishman-Hillard and its employees donated $14,600 to Hahn, who benefited from the firm's public relations advice.

But since reports that Fleishman-Hillard had overbilled the city hit the headlines last summer and the company became the subject of a criminal investigation, it has disappeared from the ranks of L.A. political givers.

Times researcher Maloy Moore contributed to this report.

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