It was late 2011, Zyad Raheem said, when his boss asked him for a favor.
Raheem was a driver for Midway-based Advantage Towing, but this request had nothing to do with hauling cars.
Raheem said Advantage Towing’s owner, Ayman Arekat, wanted Raheem to make a donation to a San Diego politician.
“I didn’t know his name,” Raheem said. “I think it was Fletcher something.”
Arekat, Raheem said, proposed a deal: Raheem would make the donation and his boss would pay him back. And so on Dec. 28, 2011, city campaign filings list a $500 donation – the maximum allowed at the time – from Raheem to then-Assemblyman Nathan Fletcher’s San Diego mayoral campaign. Arekat, Raheem said, reimbursed him the full amount.
“I make the check,” Raheem said. “But I didn’t make the donation.”
If Raheem’s account is true, the donation would be illegal.
Under local and state law, people aren’t allowed to donate to politicians in other people’s names. Doing so evades rules governing the maximum amount people can give to candidates, laws written to limit the influence of individual donors in elections.
And Raheem’s “donation” could point to something much bigger.
Local and state regulators are now investigating whether thousands of dollars in contributions from the towing industry were illegally laundered to the campaigns of five high-profile San Diego politicians over the past six years. In one case, a tow company owner has already admitted to laundering cash to District Attorney Bonnie Dumanis’ failed 2012 mayoral bid.
If proven, the combined investigations could represent the largest effort by an industry to illegally influence San Diego political campaigns in more than a decade.
Dumanis received the most in questionable towing money, with nearly $14,000 spread across her mayoral campaign and 2014 re-election bid for district attorney. Donations from towers that fit the pattern of money laundering also went to Sheriff Bill Gore, all three of Dumanis 2012 mayoral opponents – Carl DeMaio, Bob Filner and Fletcher – and former Chula Vista City Councilman Rudy Ramirez.
The politicians who were willing to talk about the donations say they not only knew nothing about the bundled towing dollars, but also had no idea what the tow companies wanted. If there was any wrongdoing, they say, the towers should pay for it.
“People who violate campaign finance laws should be prosecuted to the fullest extent of the law – period,” DeMaio said.
The tow company owners say they did nothing wrong and, according to the attorney for one, a campaign worker solicited the questionable contributions from the tow company owner and his employees.
“I don’t know why they’re going after the tow owners and leaving the politicians alone,” said Stephen Lopez, a lawyer representing Advantage Towing in its dealings with the city’s Ethics Commission.
The towing donations have all the features of efforts to evade local and state rules limiting how much individuals can give directly to candidates. Raheem’s contribution in 2011 came the same day that three other low-level Advantage Towing employees also gave the maximum amount to Fletcher’s campaign – a telltale sign of possible illegal contributions.
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The same pattern shows up again and again in donations from tow companies.
On Jan. 19, 2012, six Advantage Towing employees and associates identified as drivers, office managers and service providers, gave the maximum to Dumanis’ mayoral campaign. That same day, four workers with Vista-based NK Towing donated the maximum to Dumanis. On May 7, 2013, three employees of Angelo’s Towing in Barrio Logan and Quality Towing in Lemon Grove gave the maximum to Dumanis’ DA re-election bid.
Money donated this way raises lots of red flags. Low-level tow company employees are unlikely to have the disposable income to give maximum contributions to political campaigns. And by giving all to the same politician on the same day, it indicates that the money is linked. Together, the donations raise questions about whether tow company owners were laundering their own money in the names of their employees.
“This is the textbook case,” said Jessica Levinson, a professor at Loyola Law School in Los Angeles and an expert on campaign finance law.
In one of these situations, a violation already has been proven.
Last November, NK Towing owner Amir Iravani acknowledged that he laundered the $2,000 to Dumanis’ mayoral campaign through his four employees and agreed to pay a $20,000 fine to the city. Iravani did not face criminal charges.
Most of the rest of the questionable towing donations remain under local and state investigation even though some are almost six years old. Campaign money-laundering cases are notoriously difficult to prosecute.
Investigators often need donors to admit they were repaid for their contribution or need bank or other records to back up that a reimbursement occurred.
“If there isn’t a smoking gun that’s given over with verbal or written testimony, then it’s really hard to prove,” said Levinson.
The tow company owners are adamant they only had the best intentions to support politicians they trusted. Lopez, the attorney for Advantage Towing, said none of the donations from the company’s employees – including Raheem’s – came from the owner.
“They had the money to make donations on their own,” Lopez said. “They made their donations on whatever day they wanted to because they wanted to.”
Donations from Angelo’s Towing started appearing on local campaign financial statements in 2009. The state is now investigating whether three of the campaigns Angelo’s Towing employees contributed to – Ramirez’ 2010 Chula Vista City Council race, Gore’s 2010 sheriff’s election and Dumanis’ 2014 DA re-election bid – involved laundered money.
Nashwan Habib, the owner of Angelo’s Towing, said he’s invited his employees to fundraisers at his home. Habib said he pays his employees well and all of them decided to give to the same politicians he supported on their own.
“When I have a party to watch a football game, I make sure everyone brings his own beer and his own food,” Habib said. “I’m not a cheapskate, but I don’t give my money away.”
Some of the most questionable donations from Angelo’s Towing went to city campaigns.
Habib gave the maximum allowable contribution to Filner’s 2012 mayoral bid. After Filner won, four employees and associates of Angelo’s Towing, including a dispatcher and an office manager, donated the maximum to Filner on the same day. The money didn’t go to Filner’s re-election campaign or another cause Filner supported. Instead, the tow dispatcher, office manager and others gave to help repay Filner’s campaign debt. (None of the individual donors could be reached for comment.)
Earlier this year, however, city ethics investigators closed their money-laundering case against Angelo’s Towing without charges, citing insufficient evidence.
“The city came after me,” Habib said. “They went through everybody’s bank account. They didn’t find nothing.”
Even Iravani, who had acknowledged laundering campaign money to Dumanis’ mayoral bid last year, now says the Ethics Commission railroaded him into signing an admission of guilt.
“They’re strong-arming people,” Iravani said of the Ethics Commission. “No proof, no nothing. Either you agree with them and sign this stipulation or they’re going to make your life a living hell.”
Lopez, Advantage Towing’s attorney, said the company’s interest in making political donation didn’t start with Arekat and his employees.
An employee of one of 2012 mayoral candidates – Lopez would not say which one – went to Arekat’s tow yard and asked for money. Lopez believes the same thing happened at other companies, too.
“Somebody was going to the tow companies, I understand, and soliciting these donations,” Lopez said.
Fletcher and DeMaio, both of whom received money from Advantage Towing, said none of their workers solicited contributions from the company. Dumanis, who got the most from Advantage Towing, didn’t respond to numerous requests for comment.
If it’s difficult to prove campaign money laundering, it’s even harder to show that campaigns knowingly accepted laundered cash – even if Advantage Towing’s lawyer is right and a campaign worker asked for tow industry donations.
“In my experience investigating campaign money laundering in San Diego as well as my experience observing other jurisdictions around the state, it is extremely rare for an investigation to uncover evidence that a candidate or a candidate’s representative was aware that contributions were being laundered or reimbursed,” said Stacey Fulhorst, executive director of the city’s Ethics Commission.
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We don’t know why the towing industry was so interested in San Diego campaigns, especially to the point it would make illegal donations.
Still, there are obvious links between the towing companies and local politics.
They want to stay out of trouble with the law, which could explain contributions to those in law enforcement like Dumanis. Indeed, the DA’s office hasn’t prosecuted a towing-related crime in nearly a decade, though many of them, such as towing a car from a private lot without a property owner’s explicit permission, are misdemeanors that the DA’s office typically doesn’t go after.
Towing companies also want government contracts. When police departments arrest people for DUIs or other traffic crimes, they call the tow companies they’ve contracted with and the companies then can collect bills from drivers. San Diego police and the Sheriff’s Department are two of the largest agencies that have these deals with towers.
Towing contracts with both agencies were out to bid while the donations were made. Angelo’s Towing and Advantage Towing have city contracts and Angelo’s and NK Towing have county contracts.
Politicians who received towing money, however, said they heard nothing from the towers about contracts or anything else they might have wanted.
One tow company owner said his reasons for making donations had nothing to do with his day job.
Habib, the owner of Angelo’s Towing, also owns liquor stores and is a member of the Neighborhood Market Association, a powerful local interest group of primarily Chaldean-owned small grocers and liquor stores.
Habib, who is Chaldean, said he heeds the advice of Mark Arabo, the head of the Neighborhood Market Association and himself no stranger to campaign finance problems.
“If [Arabo] says follow somebody, we do,” Habib said. “If he says don’t follow somebody, we don’t.”
The politicians themselves, Habib said, don’t interest him.
“I got no reason to give money to these guys,” he said. “I don’t know these people. I don’t die for these people. If they’re good for the city, then I’ll give.”