Attorney General Martha Coakley has launched an investigation into William Lantigua’s fund-raising practices after state regulators found that the Lawrence mayor and his campaign aides routinely violated campaign finance laws by accepting illegal donations, using public employees to solicit funds, and failing to file accurate reports.
The state Office of Campaign and Political Finance concluded that Lantigua and his campaign aides and financial backers violated 11 different provisions of the campaign finance law since 2008. The attorney general will now conduct her own review to determine whether fines or criminal charges should be sought.
The campaign finance office started looking into Lantigua’s finances last June, after the Globe reported that his campaign reports were both incomplete and rife with undisclosed donors and questionable gifts from businesses. At one point, Lantigua’s girlfriend, a Lawrence city employee, improperly served as treasurer, even though public employees are barred from fund-raising.
But even after regulators started reviewing the records, Lantigua’s campaign continued to flout the law, according to state officials. Lantigua is now personally facing fines of $25 a day, up to $5,000, for failing to file campaign reports for fund-raising and spending in 2011.
Lantigua said yesterday that he was surprised to learn the campaign finance case had been sent to the attorney general, because, he said, he and his aides have been trying to correct the problems since they were first reported last year.
“There were mistakes, but there was no intention of breaking the law,’’ he said. “It was my responsibility. Without a doubt, mistakes were made. But they were honest mistakes.’’
Coakley’s investigation could lead to criminal charges or civil fines. Criminal violations of the campaign finance law carry penalties of up to 1 year in jail and fines of up to $1,000 per infraction. Businesses that violate the law face fines of up to $50,000 per violation.
Lantigua, the state’s first Latino mayor, has been mired in controversy almost from the day he took office in January 2010. At first, Lantigua refused to give up his second job as a state representative. Then, state and federal authorities launched investigations into possible abuse of power in personnel and other matters.
This week, at least two city officials received subpoenas in connection with the broader investigation, Lantigua said. Another city employee said the subpoenas came from a joint state-federal investigation looking into corruption.
The Office of Campaign and Political Finance cited nine people and Lantigua’s campaign committee for violating campaign law including two police officers - Melix Bonilla, a Lawrence deputy chief and Lantigua’s campaign manager, and Elvin Alarcon, a Methuen officer who was Lantigua’s campaign finance director. In a letter to Coakley, the regulators also asked her office to investigate Lorenza Ortega, who was Lantigua’s girlfriend.
The government employees are accused of soliciting and collecting donations for Lantigua even though state law prohibits public employees from political fund-raising.
When Ortega, who works in the Personnel Department, was named campaign treasurer in 2009 she signed a form swearing that she was not a public employee, even though she had worked for the city since 2005.
Also facing the possibility of fines for allegedly making improper campaign donations are Gary Sidell and Juan and Luis Yepez. The Yepez brothers, who operate a computer and electronics business in Lawrence, threw a fund-raiser for Lantigua in April 2010 at a restored mill managed by Sidell’s company. Lantigua reported taking in more than $13,000 from donors who paid up to $500 apiece to dine on paella. But he reported paying no expenses for the food, drink, or dining hall, costs that would have run into thousands of dollars.
The Yepez brothers, who refused to say who paid the bill, are now facing charges that they donated more to Lantigua than the $500 limit for individuals both in 2009 and 2010 and that they violated the provision that bans donations from corporations or other businesses.
The fund-raiser, held at Chester’s at Bell Tower Square, was one of at least 15 campaign events at restaurants and nightclubs for which Lantigua reported no expenses, the Globe reported last year.
Lantigua said Tuesday that he was contacted by the Office of Campaign and Political Finance shortly after the Globe story was published in May. He said that since then he and others involved in his campaign have had frequent conversations and meetings with agency officials about his campaign’s practices.
“All along, every question we answered the best we could, with honesty,’’ he said. “I guess there was some confusion over the conversations and meetings continuing.’’
Lantigua said he hopes to file the missing 2011 report this week. “Whatever needs to be done we will do,’’ he said.
His campaign has already arranged to pay $4,100 to the Yepezes to cover the cost of the fund-raiser held on his behalf, he said.
Lantigua said no payment had been made earlier from his campaign because the Yepez brothers had sent no invoice.
Juan Yepez declined comment on the investigation.
Lantigua said he tried to pay back another Lawrence restaurant, Salvatore’s, for $875 worth of food that an unnamed donor covered for a March 3, 2008, fund-raiser featuring Governor Deval Patrick.
But Lantigua said Sal’s returned the check, saying there was no outstanding debt. The mayor said he expects his campaign to donate the amount to charity.
“I welcome all the inquiry,’’ Lantigua added. “I had no intention of doing anything illegal. This has been a huge distraction and we want to move on.’’
Michael Fielding, a former city councilor who served as Lantigua’s campaign treasurer from 2003 to 2009, said Tuesday he did not know that the state had referred the case to the attorney general.
“You kind of caught me off guard,’’ said Fielding. “I don’t think I did anything wrong, and I have no comment.’’
Fielding said he met with state campaign finance investigators last year but left believing that he had nothing to worry about.