Los Angeles City Councilman Jose Huizar, accused by federal prosecutors of acting as the ringleader of a “criminal enterprise” to solicit and receive bribes in exchange for favorable city decisions on real estate projects, was arrested Tuesday at his Boyle Heights home, amid an ongoing FBI probe into “pay-to-play” corruption at City Hall.
The arrest comes nearly two years after the FBI raided the office and home of the councilman, who represents downtown Los Angeles and Eastside neighborhoods.
During the 2018 search, FBI officials said Tuesday, investigators discovered $129,000 in cash stashed in a closet at Huizar’s home.
Huizar, 51, was expected to be released from custody on $100,000 bond Tuesday afternoon, after making an initial court appearance by video conference from a downtown lockup, in connection with a charge of one count of conspiring to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act. The charge has a maximum statutory sentence of 20 years in federal prison.
He was not asked to enter a plea to the charge in the complaint, and is set for a July 14 preliminary hearing, with an arraignment on July 20.
This is the first time an elected official has been charged in a RICO case within the city of Los Angeles, Voviette Morgan, FBI Special Agent in Charge of the Criminal Division for Los Angeles, said in a news conference Tuesday morning.
Huizar declined comment through his attorneys, who said he intended to respond to allegations through the court proceedings.
Federal prosecutors accuse Huizar of leading a scheme lasting over several years to use his role as chair on the council’s powerful planning committee, to solicit and accept bribes and other benefits from developers and others seeking approvals on projects.
On Tuesday, FBI agents who had given their investigation the name Operation Casino Royale, said they began the probe in 2015 after receiving information that Huizar was seen cashing out a large amount of casino chips in Las Vegas.
The chips were among the alleged financial benefits Huizar reaped over the years that also funded the settlement of a sexual harassment case, luxury hotel rooms, spa treatments, fine dining, charter flights and campaign-related contributions, agents said.
Federal prosecutors allege Huizar agreed to take at least $1.5 million in financial benefits.
The arrest was made as part of a corruption investigation launched into an alleged bribery scheme involving real estate development projects, that federal authorities said was ongoing Tuesday, despite Huizar’s arrest.
“We intend to bring to justice everyone who is involved in the criminal activity,” said U.S. Attorney Nick Hanna.
Morgan said they are urging people to come forward with tips, and that an email hotline has been set up at pctips-losangeles@fbi.gov that will be checked frequently.
“Our goal is to return power and access to the people, to end the practice of buying off politicians and to restore honest services to the city,” she said.
The allegations details a scheme that has been “long-standing” and that “encompasses many different projects and involves a number of different individuals,” according to Hanna.
Despite many people linked to the alleged criminal scheme, “nobody picked up the phone and called the FBI,” Hanna said.
Over the years, Huizar was able to capitalize on the power of his public office to operate the scheme, investigators said.
Agents believe the scheme was initiated by Huizar in 2013, together with a Chinese billionaire who owns a hotel in the councilman’s district and who operates a multinational development firm, said Hanna.
Huizar oversaw a council district where “much of the development in recent years was centered,” and he chaired the Planning and Land Use Management Committee, “where he decided which projects lived and which projects died.”
The projects that prosecutors allege became part of “pay-to-play” strategies was a 77-story skyscraper that was billed as “the largest building west of the Mississippi,” and a large mixed-use project.
In return for favorable actions taken on real estate projects, prosecutors allege Huizar was able to received cash — some that had been stuffed into a brown paper bag — from developers and others seeking favors.
The illicit fund, investigators said, also paid for “dozens of trips” to Las Vegas for Huizar, as well as a staff trip to Australia and a family trip to China.
In at least one instance, some of the money that was set to go to Huizar was pocketed instead by other members of the enterprise including a former aide to the councilman, Hanna said.
Hanna said the investigation “pulled back the curtain on rampant corruption at City Hall.”
The federal corruption probe has so far led to charges against four other people:
- George Esparza, a former special assistant to Huizar, who agreed to plead guilty to a RICO charge, related to taking part in a “criminal enterprise” in which he received bribe proceeds and other benefits.
- Justin Kim, a political fundraiser who was accused of collecting $500,000 aimed at getting Huizar to defeat a labor union’s appeal against a project. He pleaded guilty this month to federal bribery charges.
- George Chiang, a real estate consultant, who is set to plead guilty later this week to racketeering charges.
- Former City Councilman Mitch Englander, who represented the northwest San Fernando Valley and also served on the Planning and Land Use Management Committee. He has agreed to plead guilty to a charge of covering up the receipt of financial benefits.
Huizar, who had been stripped of his position as chair on the planning committee, has faced growing calls from colleagues to resign in recent months as charges built up against other alleged participants in the scheme.
Council President Nury Martinez had earlier called on Huizar to suspend participation in council meetings, after felony charges were filed against an ex-aide to the councilman.
On Tuesday, she said she would begin the process to remove Huizar from his City Council office, saying the allegations were “horrendous and disgusting, and say the announcement of the arrest was “not unexpected.”
The council voted 14-0 Tuesday to suspend Huizar.
Some members of the council had called for Huizar’s immediate resignation and called for him to be replaced by Kevin de Leon, who was elected in March to fill the 14th council district seat. Huizar is termed out, and the new term begins in December.
In November 2018, federal agents served search warrants at Huizar’s City Hall and field offices, along with his home, as part of the investigation.
The bribery scheme involving Kim began in 2016 when a labor group filed an appeal claiming a developer’s proposed residential high-rise project violated the California Environmental Quality Act. The developer contacted Kim in hopes of gaining Huizar’s support, court papers indicate.
According to the U.S. Attorney’s Office, the unnamed council member and developer negotiated a $500,000 payment, and in early 2017, the developer gave Kim $400,000 in cash inside a paper bag to deliver to the council member. Kim kept some cash for himself for acting as a go-between, then delivered the money to a staff member to pass along to Huizar, court papers indicate.
Prosecutors allege the developer later paid the other $100,000 when the appeal was resolved, but Kim kept the money for himself.
Prosecutors also contend in the papers the developer — with Esparza’s knowledge — secured $600,000 in collateral so the council member could obtain a $570,000 bank loan to settle a sexual harassment lawsuit filed against the elected official in 2013 by a former employee. Huizar was sued in 2013 for alleged sexual harassment by former aide Francine Godoy. The married Huizar later claimed the two had a consensual affair. The lawsuit was settled in 2014, but the terms were never disclosed.
A date has not yet been set for Esparza to enter his guilty plea. Chiang is expected to plead guilty on Friday, and Englander’s plea will be taken on July 7 in downtown Los Angeles.
City News Service contributed to this report.
