State Exposes and Fines New York Developer for Money Laundering in Choi Mayoral Campaign

A New York developer named Howard Rich has been exposed as the secret donor behind a “dark money” campaign to elect Steven Choi as Mayor of Irvine in 2012.

Jon Fleischman continues to be under investigation for money laundering.

Acting on a 750-page complaint filed by local attorney and political activist Frank Barbaro, the California Fair Political Practices Commission (FPPC) uncovered a money laundering scheme including the New York developer, a Virginia-based Political Action Committee and Irvine Republican political consultant Jon Fleischman.

According to an official FPPC report, Jon Fleischman created the California Term Limits PAC on August 1, 2012. A few weeks later, New York developer Howard Rich wired $200,000 to a Virginia-based Political Action Committee called Citizens in Charge. This PAC sent the $200,000 to Fleischman’s PAC without disclosing Rich as the donor.

A report by the FPPC staff called the violations “serious,” adding that they go to the heart of the Political Reform Act.

“A central purpose of the Act is to ensure that receipts and expenditures in election campaigns are fully and truthfully disclosed so that the voters may be fully informed, and improper practices may be inhibited,” the staff report said.

The $200,000 was used by Fleischman’s group primarily to fund a series of vicious political “hit pieces” attacking Choi’s opponent for Mayor, Larry Agran.

Mayor Steven Choi benefited from the $200,000 dark money scheme.

“After two years of investigation, we now know the source of the illegally laundered $200,000 was used to corrupt our local election,” said Mr. Agran. “But we still don’t know the whole story. Why would a New York developer bankroll the election of Steven Choi as Mayor of Irvine, California?”

The answer may lie in the fact that Mayor Choi had emerged as the leading proponent of increasing growth and development in Irvine. He has taken credit for pushing through FivePoint Communities’ plan to build 10,000 new houses and aprtments at the Great Park. In return, FivePoint Communities and other developer interests spent more than $500,000 to support Mayor Choi’s re-election in 2014.

Howard Rich and Citizens in Charge were fined $14,000, the maximum allowed by law. The FPPC is continuing to investigate Jon Fleischman and his role in the money laundering scheme.

In a letter to the Fair Political Practices Commission, Frank Barbaro said, “The facts outlined in my complaint, however, raise many inferences and questions, all of which seem to indicate a criminal conspiracy. The result of this conspiracy was the change of control of the Irvine City Council and the approval of a development, by a single land developer, of over 10,000 additional homes in Irvine on a 3 to 2 vote of the Irvine City Council.”

The continuing FPPC investigation, now two years old, is expected to shed light on the “dark money” behind Steven Choi’s political career.

ICNV Staff

ICNV Staff

ICNV staff writers are local Irvine journalists who are personally familiar with the events and issues about which they write.
ICNV Staff

Latest posts by ICNV Staff (see all)