The Huntley Hotel is facing a $310,000 fine for 62 violations pertaining to political fundraising in the 2012 and 2014 elections.
The fine is one of the largest ever issued by the California Fair Political Practices Commission (FPPC) and follows an extensive investigation into the hotel’s political activity.
According to the FPPC, the Huntley engaged in a pattern of behavior to support candidates and causes that it hoped would oppose development at the neighboring Fairmont Hotel. The Huntley illegally channeled donations through employees and affiliated businesses over several years totaling more than $97,000. The FPPC documents say the donations were made to Terry O’Day, Gleam Davis, Richard McKinnon, Ted Winterer, Santa Monicans for Responsible Growth, Santa Monicans for Renters Rights and the Santa Monica Coalition for a Livable City.
In a related case, two of the businesses accused of acting as an intermediary for the hotel, Richardson Patel law firm and Pure Pilates, were fined $10,000.
According to the FPPC ruling, the Huntley got involved in local politics in 2012 to directly oppose expansion plans of the Fairmont Miramar. The ruling states the Huntley hired the law firm (Latham & Watkins) to advise on ways to oppose the plan and acting on advice from the firm, the hotel designated General Manager Manju Raman as the point person for the opposition project. It also hired political consultant Susan Burnside to organize community opposition and establish a coalition of residents concerned about the expansion plans.
Burnside, along with Santa Monica residents Ivan Perkins and Susan Scarafia, also created a political committee: Santa Monicans for Responsible Growth (SMRG).
“The purpose of the Committee was to provide the Coalition with a vehicle to support candidates in Santa Monica who favored a slow-growth position with respect to development in downtown Santa Monica and who might be expected to oppose the Miramar’s significant expansion proposal,” said the FPPC report.
The Huntley’s attorneys said the hotel should collect checks from different individuals and present them as a group to candidates. Raman made an effort to secure donations that included offering to reimburse hotel employees and their spouses if they made donations.
“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,” said the FPPC.
At about the same time, Burnside and the attorneys said SMRG needed $75,000 – $100,000 in contributions from community members to fund political activity.
The FPPC complaint said Raman didn’t know how to raise the money and turned to friendly business owners who agreed to fund the SMRG with reimbursements from the Huntley. The complaint said $15,000 was funneled through Body Z Alive, $10,000 through the Richardson Patel law firm and $50,000 through Playground Consulting.
“In total in 2012, The Huntley made 44 contributions that totaled $86,650 in the names of others rather than its own name,” said the complaint.
The FPPC contends the hotel repeated the behavior in 2014. The complaint states the hotel again funneled money through Body Z Alive and made reimbursements to hotel employees/friends who donated.
The fine is one of the largest ever issued by the enforcement agency and the FPPC said it is warranted despite cooperation from the Huntley and Raman.
The complaint states the hotel has admitted to the violations and was forthcoming with additional information during the investigation.
“Moreover, Raman — who was responsible for making the reimbursements at issue — contends 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,” said the complaint.
However, the FPPC said the sheer number of violations and their duration over two election cycles warranted the maximum $5,000 fine per violation.
The complaint does not state the recipients of the contributions knew about the reimbursements and allegations of wrongdoing are only levied against the donors themselves.
Mayor Winterer said he was unaware of the investigation into the hotel and that he had no knowledge of the Huntley’s activities currently or at the time of the contributions.
The fines will be proposed at the FPPC’s August 17 meeting, held in Sacramento. For more information, visit http://www.fppc.ca.gov.