SCANDAL UNSEATS MAYOR HAHN NEVER DIRECTLY ACCUSED BUT SEEN AS SLOW TO CLEAN HOUSE.

Byline: Rick Orlov Staff Writer

It turned out that former Mayor James Hahn's political fate was sealed by three little words: ``pay for play.''

Accusations that surfaced in 2004 of backroom dealings and political shakedowns for campaign contributions led to a series of investigations - by county and federal grand juries, the city Ethics Commission and Controller Laura Chick - that proved too much for Hahn to overcome in 2005.

The scandal resulted in a series of changes in how the city does business, including a ban on commissioners raising money for elected officials, tighter monitoring of contracts and a pledge by newly elected Mayor Antonio Villaraigosa to keep paid lobbyists off city commissions.

The original accusations were that the Airport Commission pressured contractors to make political contributions in order to win city contracts. Similar accusations soon swirled around the panels overseeing the Department of Water and Power and the Harbor Department.

No indictments ever resulted from the investigations, but the damage was done politically for Hahn, who was slow to respond to the accusations. Eventually, one of his top aides and two commissioners resigned.

The inquiries, however, did lead to other investigations and charges.

Steve Sugerman, a former top executive with the public-relations firm of Fleishman-Hillard, pleaded guilty in July to three federal counts of wire fraud, admitting that he overbilled the city tens of thousands of dollars on a DWP contract. In a negotiated settlement, the firm agreed to repay the city $6 million. Sugerman also agreed to cooperate with prosecutors in their case against two other Fleishman executives, Doug Dowie and John Stoddard, who have pleaded not guilty to similar charges.

In another case, real estate developer Mark Alan Abrams has been accused of laundering political contributions to Hahn and other city officials. He is scheduled to appear in court on Jan. 6 for the setting of a preliminary hearing date.

Abrams is one of the most prominent Hahn donors whose contributions became an issue. Over the years, he contributed more than $336,000 to Hahn campaigns.

Abrams has paid fines and penalties of $270,000 to the city Ethics Commission.

In another case involving money-laundering allegations, prominent attorney Pierce O'Donnell has pleaded not guilty to charges that he reimbursed workers and associates $25,500 for contributions to Hahn's successful 2001 mayoral campaign.

Rick Orlov, [phone]

rick.orlov(at)dailynews.com

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Photo:

James Hahn leaves a press conference room at City Hall after speaking to reporters.

David Sprague/Staff Photographer