Prosecutors levied charges under RICO Act
By Stefanie Dazio and John Antczak
Associated Press
LOS ANGELES (AP) — Brown paper bags stuffed with cash. Hundreds of thousands of dollars in casino chips. A 77-story skyscraper meant to be the highest west of the Mississippi River.
Jose Huizar, a Los Angeles city councilman known as “the boss,” was arrested Tuesday on allegations he masterminded a $1.5 million pay-to-play scheme tied to the approval of large building projects.
Prosecutors say he and his cronies — including some already charged who have agreed to plead guilty — sought to illegally profit from development of the city’s burgeoning downtown district.
He and his associates “sold themselves to the highest bidder and in so doing, sold out the residents of this city,” U.S. Attorney Nick Hanna said in a news conference after the councilman’s arrest.
“Councilman Huizar intends to respond to the government’s allegations in court,” Huizar’s attorneys Mary Carter Andrues and Vicki Podberesky said in a statement. “He firmly believes that these matters should be handled in a court of law and not in the media. Councilman Huizar requests that the press respect the privacy of his family and children.”
It’s the first time federal prosecutors have levied charges under the Racketeer Influenced and Corrupt Organizations (RICO) Act in a public corruption case that ensnared a Los Angeles elected official, according to Voviette Morgan, an FBI special agent in charge in Los Angeles.
The schemers violated multiple laws, including bribery, honest services fraud, extortion and money laundering, prosecutors said. Huizar, 51, is charged with one count of conspiring to violate the RICO Act and faces up to 20 years in federal prison if convicted.
A federal judge ordered Huizar released on a $100,000 bond during his first appearance in court Tuesday afternoon. He was not asked to enter a plea.
Mayor Eric Garcetti and other city leaders have been calling for Huizar to resign since his former special assistant agreed last month to plead guilty in the bribery scheme. “Councilmember Huizar has violated the trust of the people who elected him,” he said in a statement. “I have zero tolerance for this criminal behavior and corruption.”
The City Council unanimously voted Tuesday to suspend Huizar from office. He has represented a district that encompasses downtown and the eastern part of Los Angeles since 2005.
In addition to the former Huizar assistant, three others have agreed to plead guilty. They include a real estate developer, a political fundraiser and former Councilman Mitchell Englander, who was accused of obstructing an investigation into whether he took thousands of dollars, female escort services and other gifts.
The “Operation Casino Loyale” investigation began in 2015, after authorities in Las Vegas noticed Huizar cashing out a large amount of casino chips from a billionaire Chinese developer. Huizar’s former special assistant acknowledged in his plea agreement that the scheme dates to 2013. Authorities stressed that the investigation is not over.
As chairman of the City Council’s powerful Planning and Land Use Management Committee until 2018, Huizar “decided which projects lived and which projects died,” Hanna said. The councilman and his associates, who called themselves “the city family,” allegedly solicited bribes from developers to ensure their projects received favorable treatment and perks, such as minimal affordable housing units and fewer labor union requirements.
The payoffs from developers — known as “friends of the office” — included $500,000 in cash in brown paper bags, more than $250,000 worth of casino chips, hotel stays, spa visits, fine dining and campaign contributions.
One of the developers, the billionaire, sought to build a 77-story tower in Huizar’s district that would become the largest skyscraper west of the Mississippi River. The developer, who already had a hotel in the district, allegedly provided benefits worth $800,000 to Huizar and others that included a dozen trips to Las Vegas casinos and funds to settle a sexual harassment lawsuit against the councilman.
Huizar was stripped of the chairmanship and other assignments following FBI raids on his home — where agents found $129,000 in cash in a closet, some of it hidden in a suit and wrapped in a T-shirt — and offices in 2018.
His wife, Richelle Huizar, briefly led a campaign to replace her husband after his term ends in 2020 but abandoned the effort after the FBI raids. Prosecutors allege the campaign was meant to control the seat’s succession and maintain the family’s hold on power in the city’s development as Huizar plotted his next career move — such as a run for mayor.
