This Formal Complaint Filed Against LA City Attorney Candidate Jack Weiss DOESN'T Look Good. (Villaraigosa is his Campaign Manager)
HERE'S A COPY OF THE FORMAL COMPLAINT FILED AGAINST LA CITY ATTORNEY CANDIDATE JACK WEISS
TO: Los Angeles City Ethics Commission, Laura Chick, Enforcement Division/Fair Political Practices Commission, Attorney General's Office, Steve Cooley/District Attorney's Office, Antonio Villaraigosa/Jack Weiss For City Attorney Campaign Manager/Clinton For President Campaign Co-Chair
FR: Party Filing Formal Complaint Against LA CITY ATTORNEY CANDIDATE JACK WEISS
DT: September 24, 2007
RE: JACK WEISS' FAILURE TO RETURN ILLEGAL DONATIONS AND MATCHING FUNDS FROM CASDEN PROPERTIES CONTRACTORS’ LAUNDERED AND EXCESS DONATIONS TO 2001 CAMPAIGNS (PRIMARY AND GENERAL)
Dear Ms. Pelham, Ms. Chick, FPPC, Attorney General Brown, and Mr. Cooley:
Please accept the following as a formal complaint regarding City Councilmember Jack Weiss’s actions with regard to the aftermath of the Casden Properties campaign contribution laundering case. The issue was recently featured on KNBC channel 4.
The candidates involved fall into two basic categories: Those named in the indictments as having received illegal contributions and those not named in the indictments. While it could be argued that all of the candidates had ample notice
that improperly donated campaign funds had been received via the press and City Ethics Commission (CEC) releases, those named in the indictments would seem to have no ability to claim lack of knowledge or awareness.
Jack Weiss was one of the candidates named in the indictments as having received illegal contributions.
This complaint focuses on Jack Weiss due to his unique knowledge and involvement with the underlying laundered contributions and the Casden project.
CLICK READ MORE FOR THE FORMAL COMPLAINT
Specifically, Jack Weiss has:
1. Failed to return laundered & excess contributions from parties convicted and/or cited by the DA and/or CEC;
2. Failed to return City matching funds based on the illegal contributions.
Jack Weiss’s actions represent a serious breach of ethics, undermine the public’s trust in City government and, based on the NBC story, violate the City Charter. They are especially egregious because he is a former US Attorney with expertise
in political corruption. He surely knows the importance of keeping tainted money out of the political system.
While it is hard to understand how a former corruption prosecutor would not have seen the warning signs when the contributions were received (such as “Casden” being written on contribution envelopes), this complaint focuses on the failure of Jack Weiss to return funds once they were confirmed to have been illegal.
These illegal contributions and the matching funds they generated represented a significant portion of Weiss’s campaign funds and gave him an early lead as the fundraising frontrunner.
It is requested that you immediately investigate this issue and prosecute to the full extent permitted by the law, including maximum fines permitted under City and State laws.
It is also requested that the Controller initiate an investigation on the amount due to the City for illegal contributions and for related matching funds.
Jack Weiss failed to return illegal contributions received by his campaign as required by the Los Angeles City Charter. In addition, he failed to reimburse the City for public matching funds which were based on the illegal contributions. The
violation of the Charter occurred when illegal contributions were confirmed by convictions and stipulations secured by the CEC.
Under the City Charter (see sec. 470(k) below), a candidate has ten days to:
1. Refund all laundered funds to the General Fund of the City of Los Angeles; and
2. Refund the Matching Funds that were generated by the laundered contributions to the City of Los Angeles Ethics Commission.
According to sources, "There is no public record of such refunds by Jack Weiss." Only Kathleen Connell returned funds ($22,000 to the FPPC, not the City of Los Angeles).
The Los Angeles Times and other local media covered the underlying illegal contributions extensively as did the CEC in its publications. Several articles are attached that provide documentation of the underlying contributions.
Los Angeles City Charter
The Charter is exceptionally clear on the responsibilities of candidates to return laundered campaign contributions. The reason the return of the illegal contributions is critical is that it prevents dirty money from staying within the system. Only
by having candidates return the money can there be a disincentive to seek out these funds. Otherwise, candidates will look to this illegal money as a way to bolster their fundraising efforts. The Charter states:
Sec. 470. Limitations on Campaign Contributions in City Elections.
(k) Assumed Name Contributions. No contribution shall be made, directly or indirectly, by any person or combination of persons, acting jointly in a name other than the name by which they are identified for legal purposes, nor in the name of another person or combination of persons. No person shall make a contribution in
his, her or its name of anything belonging to another person or received from another person on the condition that it be used as a contribution. In the event it is discovered by a candidate or committee treasurer that a contribution has been received in violation of this subsection, the candidate or treasurer shall promptly pay the amount received in violation of this subsection to the City Treasurer for deposit in the General Fund of the City.
(1) Criminal Enforcement – Any person who knowingly or willfully violates any provisions of this section is guilty of a misdemeanor. Any person who causes any other person to violate any provision of this section, or who aids and abets any other person in the violation of any provision of this section, shall be liable under the provisions of this section. Prosecution for violation of any provision of this section must be commenced within two years after the date on which the violation occurred.
2) Civil Enforcement.
(A) Any person who intentionally or negligently violates any provision of this section shall be liable in a civil action brought by the City Attorney or by a person residing within the City. Where no specific civil penalty is provided, a person may be liable for an amount up to two thousand dollars ($2,000) for each violation.
(B) Any person who intentionally or negligently makes or receives a contribution, or makes an expenditure, in violation of any provision of this section shall be liable in a civil action brought by the City Attorney or by a person residing within the City for an amount up to three times the amount of the unlawful contribution or
(F) In determining the amount of liability under this subsection, the court may take into account the seriousness of the violation and the degree of culpability of the defendant.
(p) Effect of Violation on Outcome of Election.
(1) If a candidate is convicted of a misdemeanor violation of any provision of this section, the court shall make a determination as to whether the violation had a material effect on the outcome of the election. If the court finds such a material effect, then:
(C) if such conviction becomes final after the candidate has assumed office, then the candidate shall be removed from office, the office shall be deemed vacant and shall be filled as otherwise provided in the Charter; and
(D) the person so convicted shall be ineligible to hold any elected City office for a period of five years after the date of such conviction.
The CEC is also very clear on what candidates are to do. The candidate’s guide states: “If you suspect that contributions you have received have been laundered or reimbursed, contact the CEC.” It is not reasonable to assert ignorance of
events given indictments, convictions and stipulations, not to mention numerous inquiries by the press and a campaign piece by his 2005 opponent that Jack Weiss did not even suspect that he had received laundered funds. In fact, he knew of the illegal contributions as he refused to return them. (See L.A. Times article attached:” Weiss refused to return contributions to Casden subcontractors when called on to do so in the last election by challenger David T. Vahedi. Vahedi
said Thursday that Weiss should not only give up the laundered contributions but also the city matching funds he received for them.“)
There is no requirement for “official” notification by the CEC in either the Charter or in the candidate’s guide. The burden falls squarely on the candidate. All that is required by the Charter is that “it is discovered by a candidate or committee
treasurer” that an illegal contribution has been received. As mentioned above, the Candidate’s Guide instructs candidates to contact the CEC if they even suspect an illegal contribution.
Jack Weiss’s excuse of “No one told me to obey the law” cannot be allowed to stand. Simply put, elected officials shouldn’t have to be told to follow the rules. They should do so on their own, as required. Arguing otherwise would be to argue that “it isn’t illegal unless you get caught.” This is hardly a viable argument for a former federal political corruption prosecutor, a current City Councilman and certainly not for a candidate for City Attorney of the City of Los Angeles.
As part of the recent NBC story, a claim was made that the allegations of laundered contributions were made too late to be applied to those who received the illegal contributions as campaign committees were closed. In this respect, Jack Weiss is also unique. The CEC fined Jack Weiss $4,800 on December 8, 2005 for violations from his 2001 campaign. (see Jack Weiss; Jack Weiss City Council General Election Committee; Committee to Elect Jack Weiss Los Angeles City Council 5th District; Jack Weiss Officeholder Account; and Jan Wasson, Treasurer.* [Case # 2004-08])
This is long after the existence of laundered contributions was known and after convictions and stipulations had been obtained for the illegal contributions.
Jack Weiss had ample time to disgorge the illegal contributions as required during the same time frame he was being investigated and fined for ethics violations from the same election.
In his official response to KNBC, Jack Weiss stated:
"As a former federal corruption prosecutor, Councilmember Weiss takes his ethical obligations seriously. The wrongful nature of these contributions was hidden from him, and the Ethics Commission never notified him of any requirements. He responded to every issue identified in his 2001 campaign audit. The 2001 Committee closed in
2002 and has no funds, and it is not legal to transfer funds or use any other committee for this purpose."
Mr. Weiss is simply not telling the truth when he says the wrongful nature of the contributions was hidden from him. As the attachments clearly show, he became aware of the wrongful nature of the contributions years ago and even acknowledged the initial indictments as a reason for suddenly changing his position on the Casden project. Second, as stated elsewhere in this complaint, there is no requirement for the CEC to notify Mr. Weiss. That responsibility is his as clearly laid out in section 470(k) of the Charter. Finally, as stated above, Mr. Weiss paid fines in 2005 relating to the 2001 election, clearly proving that it was possible for him to pay fines after his committee had closed.
Mr. Weiss did NOT take his ethical obligations seriously. Had he done so, he would have first abided by the advice in the CEC candidate’s guide (“If you suspect that contributions you have received have been laundered or reimbursed, contact
the CEC”). He then should have complied with section 470(k) which states “In the event it is discovered by a candidate or committee treasurer that a contribution has been received in violation of this subsection, the candidate or treasurer shall
promptly pay the amount received in violation of this subsection to the City Treasurer for deposit in the General Fund of the City.” He did neither.
1. Jack Weiss was the recipient of campaign contributions that later were found to be “assumed name” contributions.
2. Jack Weiss was the recipient of campaign contributions that were later found to be excess contributions.
3. Public matching funds were provided to Jack Weiss based on these contributions.
4. Jack Weiss must have known of the illegal contributions as:
a. He cited the indictments as a reason he changed his opinion on the Casden project in Westwood.
b. His failure to return the funds was a campaign issue raised by his opponent in the 2005 election.
c. The CEC sent out numerous enforcement and/or other documents confirming the true nature of the illegal contributions.
d. Jack Weiss’s representative Larry Levine was quoted in a 2006 L.A. Times article saying “If Jack receives a communication from a regulatory agency, he will read it and consider what to do with it."
e. Jack Weiss’s personal attorney, Ronald Turovsky, represented Casden in front of the CEC on the Casden stipulations which confirmed the true nature of the contributions. The relationship of Mr. Turovsky to both Casden and Weiss can be confirmed from CEC documents. (see January 25, 2005 and November 8, 2005 CEC minutes)
f. The L.A. Times stated: “Weiss refused to return contributions to Casden subcontractors when called on to do so in the last election by challenger David T. Vahedi.” This once again demonstrates both knowledge and a willful refusal to comply with the Charter.
Also of note: In a recorded interview in May of 2001, Jack Weiss was questioned about receipt of Casdenrelated funds contemporaneously with the election. He denied having received funds from Casden despite having received significant contributions with “Casden” written contribution envelopes.
5. The CEC confirmed the need for candidates to return assumed name contributions and matching funds in its March 13, 2003 opinion letter to Mayoral candidate Becerra. (The key difference with Mr. Becerra is that he sought advice on his own after becoming aware of assumed name contributions whereas Jack Weiss did not.)
6. Jack Weiss failed to return illegal contributions per the City Charter.
7. Jack Weiss failed to return public matching funds which were derived from the illegal contributions.
8. Jack Weiss knew of the illegal contributions and still failed to return illegal contributions and public matching fund as required by the Charter.
9. Jack Weiss was a former federal political corruption prosecutor and must therefore know the seriousness of retaining laundered contributions as well as the corresponding public matching funds.
10. The combination of the illegal contributions and public matching funds allowed Jack Weiss to be the fundraising leader and defacto frontrunner in the 2001 election.
11. The illegal funds and corresponding matching funds allowed Jack Weiss to pay for increased communication with the public in an election he won by under 400 votes.
The final determination of the amounts of laundered contributions and the resulting matching funds is one that a regulatory or law enforcement agency must make. A preliminary review of contribution data shows that Jack Weiss received approximately $94,500 from the combination of Casden-related contributors and corresponding matching funds.
Note that this total does not attempt to indicate the legality or illegality of any contribution. That determination, as stated above, must be made by the CEC or another qualified agency.
Per City totals, Jack Weiss’s expenditures for 2001 were $343,732, including $100,000 in public matching funds. The $94,502 from the combination of Casden donors and the resulting matching funds represents more than a quarter of the money spent by Jack Weiss in the election – an election-changing amount.
1. That Jack Weiss be instructed to immediately return all illegal contributions per the City Charter as there is no discretion with regard to the return of assumed name contributions in the Charter.
2. That Jack Weiss be instructed to immediately return all matching funds based on the illegal contributions as there is no discretion with regard to the return of improperly awarded matching funds in the Charter.
3. That Jack Weiss be instructed to pay interest on the combination of the illegal contributions and the matching funds which should have been returned to the City.
4. That the CEC and FPPC impose the maximum fines allowable on Jack Weiss given his prior ethical violations (from the same election), the seriousness of the current violations and every indication that once Jack Weiss had full knowledge of the true source of the laundered contributions he failed, even refused, to return illegal
5. That the CEC and FPPC refer the matter to the City Attorney’s office, the District Attorney’s office and, if necessary, the California Attorney General’s office for review of possible criminal violations and removal from office per the Charter prior to the next election cycle for Mr. Weiss.
6. That the Controller’s office immediately investigate the amount of money due to the City General Fund and Matching Fund from enforcement of the return of assumed name contributions and related matching funds.
The return of funds after a committee is closed was discussed in an opinion letter to Laura Chick.
See http://ethics.lacity.org/PDF/advice/02-12.pdf. In addition, the CEC discussed the use of a Legal Defense Fund for Nate Holden (see http://ethics.lacity.org/PDF/advice/99-09.pdf). Finally Jack Weiss paid fines in 2005 for a closed 2001 committee. The CEC specifically advised how Jack Weiss could re-open his 2001 committee to pay for the fines. (see http://ethics.lacity.org/PDF/advice/05-05.pdf). Thus the “closed committee” argument must fail.
That the Charter rules requiring return of illegal contributions were not followed appears to be clear. It is known that:
. Assumed name contributions were received by Jack Weiss.
. Matching funds were given to Jack Weiss based on those contributions.
. Jack Weiss failed to return either assumed name contributions or matching funds as required by the Charter.
. Jack Weiss and his advisors knew of the true nature of the contributions.
The CEC is requested to not only seek immediate return of KNOWN illegal contributions but also perform a thorough supplementary review of ALL Casden-related contributions. It appears, based on the indictments and CEC actions that only those entities directly tied to indictees were investigated. As the CEC’s investigation was started within the prescribed time frame, all contributions can and should be reviewed.
Whether or not Jack Weiss knew of the true nature of the contributions at the time they were made is irrelevant to this complaint – though it must be investigated as well. This complaint focuses on the actions/inactions of Jack Weiss once he knew he had received illegal contributions. It is this failure to do the right thing, as required by the Charter that must be addressed.
Based on the above facts, the CEC found that Jack Weiss benefited from illegal contributions in the 2001 election cycle. The clear facts also show that he ignored the City Charter requirements mandating that he return those funds once he became aware of the illegality of the contributions.
The first line of defense for ethics in government is the candidates themselves. The next line of defense is the CEC. In this case, Jack Weiss has failed his ethics requirement. The CEC must now fulfill its obligation and seek full and complete
adherence with the clear requirements of the City Charter.
The CEC must follow the law and do so in a consistent fashion. The CEC has provided an opinion letter in the past to Jack Weiss indicating that closed committees can be re-opened to pay for ethical violations. It would be inconsistent to now claim that it is too late to pursue Charter violations because a committee is closed.
The imposition of fines on contributors represents a punishment for breaking the law. However, the dirty money is still in the system. Only by removing the dirty money from the system can the CEC ensure clean elections. A failure to pursue
dirty money renders the City Charter’s clear statement of the law inoperable. This invites abuse.
The November 30, 2003 Daily News article said it best:
“Although ‘Casden’ was written on all the donor cards, none of the beneficiaries thought there might be anything wrong - and that ought to tell you something about how the City Hall money game works: Take the money and turn a blind eye to where it came from.”
If entities charged with enforcement of election laws do not act quickly and decisively, future contributors and candidates will not be deterred from taking advantage of the electoral system in a similar fashion. In fact, the CEC will have provided a blueprint on how to circumvent campaign finance laws.
The importance of strong action is clear. In this case, the contributors simply had to contribute more to the candidates (by way of fines) to achieve their objectives. Contractors still got their contracts. The developer still got to develop its project.
Elected officials got elected. In the final analysis, the scheme worked. It may have been a bit more expensive than planned, but it worked.
A failure to fully remove tainted money from the system provides a temptation for both contributors and candidates alike to break the rules. To date, getting caught simply results in fines long after a candidate is in office. All this does is to make the contributions a bit more expensive, but the ultimate goal of both candidate and contributor (a successful election) is achieved.
Your prompt action on this matter is needed to preserve the sanctity of the elective process and to remove tainted money from the system.
[STARTING POINT, ONLY, Y'ALL!!! MUCH MORE TO COME!]
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