The LA City Council has been embroiled in an FBI investigation probe over racketeering and bribery accusations for over three years, codenamed “Operation Casino Royale.” A number of people have already pled guilty to these charges and still more are being investigated.
To provide legal definitions, according to the Federal RICO Act, racketeering is: A pattern of illegal activity carried out as part of an enterprise that is owned or controlled by those who are engaged in the illegal activity. Whereas bribery is: Corrupt solicitation, acceptance, or transfer of value in exchange for official action.
In this case, members of the LA City Council and those close to them are the enterprise that is partaking in a pattern of illegal activity, which is bribery. It is important to note before we continue that merely accepting or transferring the value associated with a bribe constitutes bribery under federal law. The City Council Members are accepting and soliciting bribes in exchange for their official action.
The general pattern of activity has been bribery being solicited and accepted in the LA City Council in exchange for speedier and more favorable land development for big money projects. The enterprises handing out the bribes have been varied with some Chinese land developers and other LA-based enterprises. This mode of having speedy development projects in Los Angeles is not new, the highly influential former LA Deputy Mayor Raymond Chan was famous for his exceedingly cavalier attitude towards building projects. Chan was also constantly suspected of dealing in illegal activity associated with this goal. Tellingly, current LA Mayor Eric Garcetti called Chan, a “true public servant.” Therefore, this newly uncovered web of bribery can be viewed as a symptom of the legacy of Raymond Chan.
The first uncovered instance of this activity involved Mitch Englander, former LA City Council Member, and his Chief of Staff John Lee* accepting bribes from a Chinese land developer in Las Vegas in exchange for their Official support of their land development proposal. The bribes included escorts, money and pampering accommodations. This activity happened in early 2017. Since this date, Mitch Englander lied about his participation in the scheme to the FBI on several occasions and attempted to cover up his involvement. He pled guilty to lying to the FBI in March of 2020 and further charges may be on the cards. John Lee, on the other hand, has not yet pled guilty but instead is currently occupying the seat on City Council that Mitch Englander vacated. Clearly, the two were intimately connected and the FBI is undoubtedly continuing an investigation on John Lee.
Another major development in the investigation has been the ongoing probing of Jose Huizar and his associates. Huizar is currently serving on the LA City Council, but recently LA Mayor Eric Garcetti has called for his resignation. Huizar is suspected as a main player in the bribery scheme in City Hall. One of his former aides, George Esparza, pled guilty to a Racketeering Conspiracy of soliciting luxurious vacations and other bribes in exchange for favors in City Hall. Considering that Jose Huizar is the actual decision maker, he is undoubtedly guilty of Racketeering Conspiracy as well. Huizar is currently playing it close to the chest and limiting his activity in City Hall, but is clearly under immense pressure to follow the path of his compatriot Mitch Englander and resign. ‘
Update 6/23/20
On June 23rd, the FBI, armed by a nearly 180 page long affidavit arrested Jose Huizar under the RICO Racketeering charge. He is alleged to have accepted around $1.5 million in bribes over several years while performing his duties in LA City Hall. Keeping with the theme of the Casino Royale, the bribes contained among others things cash, lavish meals, spa treaments, casino chips, private jets and trips to luxurious hotels. Also included was financial support for Huizar’s previous reelection bid. One particularly lurid allegation is Huizar accepting up to $800,000 worth of bribes from a Chinese investor who was said to have wanted to build the biggest building on this side of the Mississippi. Additionally, the federal allegation states that in an effort to maintain the flow of bribes, Huizar was planning on having his wife replace him on LA City Council. The FBI’s RICO conspiracy charge filed against Huizar carries a heavy weight, a minimum of 20 years in federal prison. Currently Huizar has been released under a $100,000 bond and is awaiting trial.
Two other ancillary individuals that have pled guilty to bribery include political fundraiser Justin Jangwoo Kim and Real Estate Development consultant George Chiang. Kim helped transfer a 500k bribe to an unnamed city council member who was most likely Jose Huizar. George Chiang pled guilty to being involved in a Racketeering Conspiracy again with an unnamed LA City Council Member. All of this points to there being a massive Racketeering Conspiracy in LA City Hall, with only a small fraction of those who are guilty currently being prosecuted.
The corruption charges and racketeering within City Hall has had an impact on current building projects in LA. The building developers involved in the bribery scheme are being exposed one by one. Carmel Partners, Shenzen New World, Shenzen Hazens Real Estate and an 940 Hill LLC formed by Dae Yong Lee, Jeok Suk Kim and Hyuk Lim are documented giving Huizar bribes.
The Carmel Partners have admitted to donating to Huizar’s election fund but they denounce most of the FBI report as opinions, lies and conjecture. The group has placed one of its executives who worked with Huizar on administrative leave. Their current building project on Mateo street is a mixed-use tower in LA’s Arts District. This project was facing heavy resistance in City Hall due to being a thirty-five story building in an area with mostly two story buildings and warehouses. This project was led through City Council by Huizar after the executive gave out numerous bribes and favors.
Shenzen New World chairman Wei Huang is alleged to have given Huizar $600,000 to settle a sexual harassment case. This is the same developer who plans to build a massive 77 story skyscraper which if built will be the largest building west of the Mississippi River.
Shenzen Hazens bribed Huizar and his staff to greenlight an 80,000 sq ft project including a 300 room hotel and hundreds of condo units.
940 Hill LLC is implicated to have given a $500,000 bribe to Huizar to a pass through a 20 story tower located on 940 South Hill Street right in Downtown LA.
All of these projects are still being pushed to construction by their respective firms.
Is this ridiculous level of corruption and greed unbelievable? No, unfortunately not. When informing people of this investigation, many just look at you as though it was implicit that this sort of activity is happening. Be that as it may, it is commendable that the FBI is taking their time to sort through this latticework of lies, bribery and racketeering to pass judgement on clearly unscrupulous people in positions of great power and influence in Los Angeles. One hopes that in the future, the LA City Council will be more heavily policed and have their insatiable appetites for land development reined in.
*John Lee is not specifically named in the court documents but it is heavily implied that he was with Englander in Las Vegas
Helpful Links:
https://www.kcrw.com/news/shows/kcrw-features/jose-huizar-pressure-resign-city-hall
Definitions:
CIMA Law Group Blog 