Chris Hansen’s bid to build a sports arena and bring the NBA back to Seattle took a major stumble Friday when it was revealed he was the secret donor who contributed $100,000 to a petition campaign to force a vote on a proposed new basketball arena in Sacramento, Calif.
“I made a mistake I regret,” the San Francisco hedge-fund manager said in a lengthy statement released late Friday afternoon after disclosure of his donation touched off a firestorm.
Hansen, who failed in a bid earlier this year to buy the Sacramento Kings and move the team to Seattle, found himself under a cloud after working for nearly two years to cultivate a reputation locally as a trustworthy businessman.
An investigation is ongoing and Hansen or a Los Angeles law firm he dealt with could face a civil penalty of up to $100,000, said Gary Winuk, chief of the enforcement division of the California Fair Political Practices Commission.
Friday’s revelation, coming after Hansen had previously expressed regret for trying to acquire the Kings, also could affect his effort to obtain an expansion team from the National Basketball Association.
The NBA, which rejected Hansen’s bid to buy the Kings and worked to keep the team in Sacramento, might take a dim view of Hansen interjecting himself into the petition campaign.
In his statement, Hansen said that when his group’s binding agreement to purchase the Kings “became a competitive situation and we were faced with ... both the prospect of seeing our transaction fail and losing our $30 million deposit,” he engaged the law firm to canvas opposition groups.
He said he did so “to gain an understanding of their efforts and the prospects of their success.”
During this time, Hansen said, he was approached through the law firm “by the opposition about making a contribution to the opposition’s efforts as part of a broader group and agreed to make a donation.”
Hansen said it was not his intent to be the primary financial sponsor of the petition campaign’s efforts and that he “merely agreed to make a donation to the opposition in what had become a competitive and heated process.”
“While I’m sure everyone can appreciate how easy it is to get caught up the heat of battle, with the benefit of hindsight, this is clearly a decision I regret,” he said. “I wish the city of Sacramento and Kings fans the best in their efforts and they have my commitment not to have any involvement in their arena efforts in the future.”
Hansen’s role in the mystery contribution was first reported Friday afternoon by The Sacramento Bee, which quoted a source shortly before California officials confirmed the donation.
At a Friday afternoon news conference, Winuk described Hansen and the law firm as sophisticated parties. “They clearly should have known that disclosure was required in this case,” he said.
“It’s not like a local school-board candidate running for the first time,” Winuk said.
“This to us is a glaring example of at best negligent and at worst purposeful deceptive behavior that was aimed at depriving the Sacramento public of the knowledge it is entitled to of who is funding campaigns,” Winuk said.
Under California law, Hansen’s June 21 donation should have been disclosed by the end of July.
“It became apparent someone had spent $100,000 for signature gathering, but nothing had been disclosed, and that’s what the problem was,” Winuk said in an interview with The Seattle Times.
The contribution came just weeks after NBA owners rejected Hansen’s deal to buy the Kings, according to The Bee.
An attorney for the Seattle Longshore Workers’ Union, which opposes the Sodo location for a new area, called on Seattle and King County officials Friday to terminate their relationship with Hansen.
“This shows the true Chris Hansen. He’s attempting to sabotage a publicly funded arena in Sacramento while at the same time asking Seattle and King County to provide $200 million for an arena here,” said Peter Goldman, who represents the International Longshore and Warehouse Union Local 19. The union is suing to block an agreement between Hansen, the city and county to build a new sports venue in the stadium district south of downtown.
Goldman also speculated that the attempt by Hansen to make an anonymous donation to a campaign to scuttle the Sacramento arena deal won’t sit well with the NBA.
State Rep. Gael Tarleton, D-Seattle, a former Port of Seattle commissioner, posted a scathing statement on Twitter, saying, “You can’t honestly be surprised? Money is how Hansen fights. Some use fists, some use words, he uses money.”
In an earlier tweet, Tarleton wrote, “Chris Hansen in No-Man’s Land. Fighting half of Seattle to build an arena, fighting City of Sacramento to prevent arena.”
Spokesmen for Seattle Mayor Mike McGinn and King County Executive Dow Constantine, who have worked closely with Hansen in support of his efforts, referred questions to Hansen.
Hansen has reached a tentative agreement with Seattle and King County to build a $490 million arena in Sodo, pledging to contribute $290 million in private money and secure an NBA team.
The Bee reported Friday that an Orange County political-action committee called Citizens for a Voice in Government made Friday’s belated filing one day after the Fair Political Practices Commission sued the Los Angeles law firm that wired $80,000 of Hansen’s $100,000 to the signature-gathering campaign organizers in Sacramento.
The lawsuit demanded to know the identity of the donor, and a court hearing had been scheduled for Monday, The Bee reported.
According to the newspaper, initial suspicion fell on the Maloof family, former owners of the Kings, because the family has long been represented by the law firm that wired the money, Loeb & Loeb.
Winuk told reporters there is no evidence to suggest the Maloofs are involved in the campaign to put Sacramento’s arena deal to a vote, The Bee reported.
In an email statement to The Bee, Sacramento Metro Chamber President Roger Niello Friday called Hansen “a saboteur” and said the deception was “an assault on our entire community.”
Hansen ended his quest to buy the Kings after the NBA voted against his proposal in May. The Maloofs agreed the next day to sell the Kings for $535 million to a group led by technology executive Vivek Ranadive.
Afterward, Hansen told a Seattle radio station that he regretted trying to grab the Kings away from Sacramento’s loyal fans, The Bee reported.
“It kind of made me sick to my stomach,” Hansen said. He added that he would go after another city’s team again only if he was convinced the team was already going to leave, according to the newspaper.
Hansen and other investors, including Microsoft CEO Steve Ballmer, twice raised their bid to obtain the King, finally reaching $625 million.
In his statement Friday, Hansen stressed that the contribution to the petition campaign was made in his “personal capacity” and not on behalf of his group.
“In fact, I have never discussed the contribution with them to date,” he said.
Ballmer and other members of the ownership group could not be reached for comment Friday.
Hansen said he has not agreed to make further political contributions and did not intend to do so.
Since spring, a small group of volunteers known as STOP — Sacramento Taxpayers Opposed to Pork — has been circulating petitions to force a public vote on the city’s proposed $258 million arena subsidy, The Bee reported.
Without a new arena, the NBA says the team will eventually leave, according to the newspaper.
Last week two political consultants quit the petition campaign, saying they were taken aback by the secrecy surrounding the donation, according to the newspaper. STOP leaders have vowed to continue the volunteer effort, saying earlier this week they were more than halfway toward their goal, The Bee reported.
A California political consultant, Tab Berg, one of the two men who quit the petition drive last week when he learned the group had likely violated election law, told The Bee Friday that the revelation of Hansen’s involvement was “stunning.”
Berg, who was paid $9,000 for his work, said he had not been told who was behind the funding.
“I thought it was a spoof at first,” he said. He declined to speculate why Hansen would take the risk of getting involved in the Sacramento issue. “Somebody like him operates in such a different plane it is hard for me to say.”