State officials have recommended fining Santa Monica’s high-end Huntley Hotel $310,000 for concealing political donations aimed at blocking the expansion of a rival hotel across the street.
According to a report from the enforcement division of the state’s Fair Political Practices Commission, the hotel illegally reimbursed donors for 62 separate political contributions totaling nearly $100,000.
The Huntley, located just blocks from the beach on Second Street, used that tactic to fill the coffers of candidates and committees skeptical of new development in the area, including the proposed overhaul of the neighboring Fairmont Miramar Hotel.
Proposed in 2012, the Fairmont’s expansion would have added a complex of buildings, including a 21-story tower to its property. Operators of the Huntley said, among other things, that it would increase traffic in the area and affect the hotel’s business.
The report states that, leading up to the city’s 2012 election, the hotel’s assistant general manager began offering to reimburse hotel employees for their contributions to candidates likely to oppose the project, apparently unaware that this was illegal under the state’s campaign financing laws.
Candidates supported by the hotel included two city council incumbents and two council candidates, including Ted Winterer, who is now the city’s mayor. The recipients of the donations have not been accused of any wrongdoing, and Santa Monica Councilmember Terry O’Day tells the Los Angeles Times he was not aware the contributions were really from the hotel.
The Huntley also made donations totaling $75,000 to Santa Monicans for Responsible Growth under the guise of an IT consultant, a pilates studio, and a business specializing in colon hydrotherapy treatment.
The proposed penalty of $310,000 is the maximum possible penalty under state law, which caps penalties at $5,000 per violation.
If the settlement amount is approved by the commission, the fine will be the second-largest ever levied for this type of campaign finance violation in the state of California. In 2013, groups linked to billionaire conservative donors Charles and David Koch paid $1 million in fines for not disclosing $15 million in donations related to a pair of state ballot measures.