Mayor Antonio Villaraigosa

LOS ANGELES, Calif.—The city Ethics Commission is expected to decide tomorrow if a prominent Koreatown real estate developer illegally laundered $18,000 for Mayor Antonio Villaraigosa’s 2009 reelection campaign.

CIC Group Chief Executive Officer Alexander Hugh  is accused ofillegally making contributions in June 2008 under “assumed names” and exceeding the maximum $1,000 contribution to the campaign of a candidate for citywide office.

Hugh pleaded not guilty in April to five felony counts filed by Los Angeles County District Attorney Steve Cooley, including conspiracy to commit campaign money laundering, two counts of filing false documents, forgery and false personation.

The city Ethics Commission alleges Hugh worked with his longtime friend Annette Lee to have employees of her escrow firm give $1,000 contributions to Villaraigosa’s campaign. Hugh then allegedly reimbursed the employees, which is illegal.

Hugh also contributed $1,000 to the campaign in his own name.

The year before the alleged money laundering occurred, Hugh won approval from the City Council and Villaraigosa for a large hotel project, despite a lack of support for the hotel from Villaraigosa’s own Planning Commission appointees. The commission was concerned that the hotel, which was never built, would overwhelm the surrounding neighborhood.

A spokesman for Villaraigosa declined to comment.

The city Ethics Commission charged Hugh with 18 counts of making contributions under assumed names and two counts of illegally exceeding campaign contribution limits. He faces a maximum penalty of $183,750.

Hugh agreed not to dispute the facts of the case and waived his right to an investigation by the commission, but he declined to admit guilt.

Hugh’s attorney submitted a brief asking the commission to consider issuing a much lower penalty.

“We hope the commission, in light of what is in effect a no-contest plea, will come to a reasonable and equitable penalty,” said Hugh’s attorney, Kenneth White.

He declined to name a fair penalty amount.

In a brief filed with the commission, White wrote that Hugh had no record of violating election laws and said he worked quickly to cooperate with the commission, saving the panel “substantial effort and resources” to prove its case.

White painted Hugh as a man in his mid-60s whose retirement would include volunteer work through his church, including trips to help rebuild earthquake-ravaged Japan and parts of Vietnam. Hugh’s retirement plans would be crippled by a large fine, his attorney argued.

White said Hugh contributed greatly to the Koreatown neighborhood through real estate developments that generated jobs and tax revenue. He declined to comment on the facts of the case, including what those real estate developments were.

He said Hugh is likely to be adequately punished by the criminal case pending in Los Angeles County Superior Court and would not be able to afford the maximum fine issued by the commission. He cited a negative settlement against Hugh in a prior employment case, the legal fees in the pending election law cases and Hugh’s lack of income because of the anemic real estate industry.

“Mr. Hugh’s involvement in political contributions does not reflect an effort to influence politicians,” White wrote. “Rather, Mr. Hugh’s political activity was directed to favor politicians who promoted development in Koreatown and took that development seriously.”

City Ethics Commission staff were not swayed by the arguments for keeping the penalty low. In a memo, Ethics Commission Director of Enforcement Deena Ghaly recommended a penalty near the maximum. She said political money laundering charges are “among the most serious of the transgressions the Commission enforces against, because they undermine the public’s important interests in limiting campaign contributions and knowing the sources of contributions.”

Despite cooperating with the commission, Ghaly said, Hugh still refuses to admit guilt. She said Hugh failed to show any proof the penalty would ruin him economically, and the commission is not required to consider that argument when weighing his penalty.

Finally, Ghaly said, the alleged crimes required premeditation.

“These are serious violations involving actions of both concealment and deceit and constituting a pattern, rather than an isolated incident, of wrongdoing,” she wrote.