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Huntley Hotel in Santa Monica Facing $310,000 Fine for Concealing Contributions in 2012 and 2014 City Elections
By Niki Cervantes
August 8, 2017 -- (Updated) The Huntley Hotel in Santa Monica faces a $310,000 fine by the state’s fair political practices watchdog for improperly concealing contributions to city political candidates in the 2012 and 2014 local elections as it battled against a rival’s redevelopment plans.
The California Fair Political Practices Commission (FPPC) has recommended slapping The Huntley with 62 counts of hiding its identity in contributions to local politicians -- including Ted Winterer, now mayor, and Council members Gleam Davis and Terry O’Day -- in a fight to stop extensive renovation plans by the Miramar Hotel across the street.
The Huntley’s proposed fine is believed to be the second-largest in the FPPC’s history. It goes to the commission for approval at its August 17 meeting.
The Huntley has admitted the violations occurred and cooperated with the FPPC’s enforcement division after retaining counsel, according to the commission’s order against Huntley.
A spokesperson for the Huntley was not immediately available for comment.
According to the FPPC, Huntley made 62 campaign contributions totaling $97,350 in the names of other people to a variety of candidate-controlled committees and general-purpose committees over the course of the 2012 and 2014 local election cycles.
The Political Reform Act prohibits contributions made in the name of another. It is meant to keep the public informed as to the actual sources of campaign contributions and helps to prevent circumvention of campaign contribution limits, the FPPC said.
“Making a campaign contribution in the name of another is one of the most serious violations of the Act,” the investigators said in recommending the maximum penalty of $5,000 per violation.
“It deceives the public as to the true source of contributions, and as occurred with certain of the contributions in this case, it allows for the circumvention of local contribution limits.”
The violations were part of a pattern that took place over two election cycles from 2012 through 2015, the FPPC’s investigation found.
One of the law firm’s initial recommendations was for The Huntley to select someone as a liaison with the community to, in part, organize opposition to the Miramar’s plans and deal with government officials.
Manju Rama, the Huntley’s assistant general manager since 1998, was selected. Latham & Watkins also advised the Huntley to hire Susan Burnside, a local political consultant, to assist in organizing and coordinating opposition to the Miramar.
The contributions reimbursed by The Huntley “concealed the full extent of The Huntley’s financial support for the Committee and created an impression that the Committee enjoyed broader financial support,” the document said.
Burnside organized a coalition named Santa Monicans Against Miramar Expansion and, with residents Ivan Perkins and Susan Scarafia, opened a political committee named Santa Monicans for Responsible Growth, which provided “a vehicle to support candidates. . . who might be expected to oppose” Miramar’s expansion.
“According to Raman, sometime in the late Summer or Fall of 2012, The Huntley’s attorneys suggested to Raman that the hotel should try to raise approximately $10,000 to support two City Council candidates, Richard McKinnon and Ted Winterer, who were running on a slow-growth platform.
"The attorneys also suggested raising a lesser amount, $5,000, for each of the two incumbent councilmembers who were running for re-election, Terry O’Day and Gleam Davis. The attorneys explained that The Huntley should collect checks for the campaign contributions from different individuals and present them together to the candidates.
“The Huntley, through Raman, reimbursed these intermediaries for making the contributions," the investigators said. "These contributions were reported on campaign statements filed by the candidates. However, the individual intermediaries were reported as the contributors, and The Huntley was not identified as the true source of the contributions.”
All the contributions made by The Huntley through these intermediaries were either the maximum contribution limit in Santa Monica of $325, or the maximum of $250 for contributions to a candidate serving on a planning commission when the contributor has business before the panel.
Among those named in by FPPC as making contributions with the understanding they would be reimbursed by The Huntly was Louretta Walker, a friend and the owner of Body Z Alive, which is located adjacent to The Huntley, and Nimish Patel.
Patel, a friend and long-time business counsel for The Huntley, was also approached by Raman to discuss a donation from the law firm of Richardson Patel.
“In 2012, Richardson Patel acted as an agent for The Huntley Hotel by making a $10,000 contribution to Santa Monicans for Responsible Growth in the name of Pure Pilates without disclosing the identity of the true donor,” the agency probe determined.
“Pure Pilates acted as an intermediary of The Huntley Hotel and failed to disclose the original contributor information."
The proposed penalty is $10,000.
Walker also was on the list again for writing a $5,000 check from Body Z Alive to the Santa Monica Coalition for a Livable City. The SMCLC reported Body Z Alive as the contributor. The Huntley was not identified as the actual source, the stipulation said.
SMCLC officials said they had no knowledge of the reimbursement arrangement between BodyZ Alive and the Huntley.
"We, like the Council members and other Santa Monica groups that received similarly sourced contributions, did not identify the Huntley as the actual source because we did not know it was," Diana Gordon, a leader od SMCLC told The Lookout. "SMCLC did its due diligence as to Body Z Alive, as we always do.
"SMCLC met with Body Z's owner to learn about its local business, went over the reasons why Ms. Walker was interested in the council race and discussed how our PAC intended to spend donations," Gordon said. "We then accepted the check and promptly reported the donation to the FPPC and the City."
In its report, the FPPC said the Huntly conducted an internal review of the events, and “admitted that the violations occurred, while disclosing other violations that were not yet discovered."
The agency found Raman had no history of any prior violations of the Act. Moreover, Raman contended “she had no prior involvement with political campaigns or fundraising and insists that she did not appreciate the illegality of the reimbursements.
“While she is now aware of the law and accepts full responsibility for her prior actions, Raman contends that neither the attorneys nor the political consultant she worked with had suggested that she was doing anything illegal at the time, and that her own attorneys participated in one of the reimbursements without objection, leading her to believe that her actions in reimbursing others’ contributions were not unlawful or inappropriate,” the FPPC said.
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