The Investigation into City Hall Corruption May Soon Take a New, Bigger Step

To borrow from another, more popular drama, winter is coming to L.A. City Hall

If you follow local government, now is the perfect time to deploy a cliché that invokes a warning. A few options: City Council members should beware the Ides of April (March has passed); for politics as usual, the end is near; or, my personal favorite, for L.A. City Hall, winter is coming.

That’s the only logical take considering federal officials’ recent moves. A public corruption investigation that the FBI launched years ago is in the hands of prosecutors and appears to be nearing a climax. Nicola T. Hanna, the U.S. Attorney for the Central District of California, looks to be readying a hammer blow that would impress even Thor.

The evidence comes from a pair of plea bargains that serve to peel back the skin of business-as-usual dealmaking in City Hall, revealing a shady underside of pay-to-play politics and real estate transactions. It’s surely no coincidence that the revelations came just eight days apart.

It all prompts speculation as to what comes next and, more pointedly, who’s going down. The Feds don’t leak details of their investigations, but official statements do sometimes lay down bread crumb trails that can be followed. Political observers pay close attention to every sentence, and sometimes every letter, in these missives.

Here are four things to glean, and anticipate, from what has transpired.

The investigation has been longer—and deeper—than anyone knew

The City Hall corruption scandal exploded on November 7, 2018, when FBI agents served seven search warrants on District 14 Councilman José Huizar. The sight of blue-jacketed agents swarming City Hall, and later carrying out boxes from Huizar’s fourth floor office, was shocking. The raids included a cute sniffer doggy named Ginger at Huizar’s Boyle Heights residence.

Huizar has not been arrested or charged with a crime, and for more than a year things went quiet. Then, on March 19, Hanna’s office announced that Justin Jangwoo Kim, a political fundraiser and real estate consultant, had agreed to plead guilty to a federal bribery offense. The charging document details the attempts by a developer to pay a $500,000 bribe to a councilmember. Kim served as a middleman in the proceedings, and while the elected official was not named, the repeated mention of the councilmember’s “relative” preparing to run for the elected official’s seat indicated that it was Huizar, as his wife Richelle was seeking to succeed him in office.

The other big component of the FBI investigation also surfaced last month, when the Justice Department announced on March 9 that former District 12 Councilman Mitch Englander would surrender to federal authorities following an investigation into receiving gifts, lying to investigators and witness tampering. Englander agreed to plead guilty on March 27.

Only now is the public getting a sense of the extent of the work. The charging document involving Kim details activities dating back to the summer of 2016, when the developer allegedly first sought to acquire the councilmember’s help in squashing a labor union’s appeal of a project. The Englander indictment reveals that investigators began looking at him mere days after a June 2017 trip to Las Vegas; an epic night out with Englander, some staffers, and a few business associates allegedly included a $2,481 dinner, a $34,000 bar bill, and a female escort sent to his room. He also allegedly received $15,000 in cash (in two separate surreptitious transactions that, amazingly, both took place in bathrooms).

A perusal of the documents would make even the steeliest defense attorney shudder. There are references to wiretapped phone calls, business figures who have been flipped, City Hall staffers cooperating with investigators and, in the Kim papers, details from private text messages sent by the councilmember.

This is just the stuff made public. Imagine what is being held back for a potential trial.

House of pain

Huizar has not commented publicly in the wake of Kim’s guilty plea, but City Hall watchers are chirping madly as to what might be happening behind the scenes. Maybe his attorneys are negotiating with the Feds, trying to work a deal for a father of four. Maybe investigators believe they have such compelling evidence that they don’t need to negotiate. Maybe the councilman professes his innocence and is girding for a fight. Maybe something else entirely is happening.

The sentences the other figures were facing could indicate the world of hurt that may await Huizar if he is charged. Before negotiating his plea, Englander was looking at up to 50 years in prison. Kim, who is also cooperating, could get up to ten years.

There’s another wrinkle. If Huizar faces criminal counts, there would be a loud drumbeat for him to resign his council seat. Or, if he negotiates a deal with prosecutors, he might be required to give up his post immediately.

All this is speculation, but if it comes to pass, the big winner could be Kevin de León. The former president of the state Senate won an election last month to succeed Huizar, and one can foresee a sudden vacancy resulting in a councilman-elect being sworn in months early. Such a move would benefit district residents by giving them representation. It would also be a coup for de León; he is believed to be planning a run for mayor in 2022, and the more time he has in the council office before that happens, the better for him.

What a deal

The inside story of what happened in the 18 days between when Englander surrendered to authorities and when he publicly agreed to plead guilty would make a great eight-episode podcast. In that timespan the seven counts and 50 years in prison he was facing were whittled down to just one charge of scheming to falsify material facts and a maximum five-year prison term. He will almost certainly serve less time.

“This is really a good deal,” says one person deeply familiar with federal investigations.

Good deals come at a cost, and the first part is acknowledgement and taking a sort of legal walk of shame. Indeed, the March 27 statement from Hanna’s office is chock-full of references noting all the misdeeds that Englander cops to in the plea agreement. He admits to accepting the gifts from the businessman, lying to investigators, covering up facts, and more.

The second part of the cost is cooperation. The source familiar with federal investigations says that the steep reduction in counts and time Englander was facing indicates that he has agreed to come clean to investigators who continue to work on what the Department of Justice has termed an “ongoing public corruption investigation.” The observer says this likely means the former councilman is not only providing every bit of information being asked for, but he has also likely agreed to testify at trial, should it come to that.

Coming up next…

The plea agreements from Englander and Kim have ratcheted up distrust of City Hall. Much of that has concerned big-money real estate deals. There is ample suspicion that those with deep pockets can pay for inside influence when it comes to navigating a costly and cumbersome approvals and permitting process.

A federal search warrant from July 2018, which made news the following January, referenced investigators looking for records related to bribery, kickbacks, money laundering, and other possible crimes. It mentioned a bevy of City Hall denizens including Huizar, former Department of Building and Safety general manager Ray Chan, Councilman Curren Price, and Deron Williams, the chief of staff to Councilman Herb Wesson. A batch of developers building projects in downtown were also mentioned.

It remains unclear which parties are targets, and again, no one beyond Englander and Kim has been charged with a crime. So the question is: What’s next?

One school of thought among City Hall observers is that investigators are looking to move higher up the food chain, and with a former councilman apparently cooperating, the next step could be a doozy. There are a lot of whispers and suspicions, but no concrete knowledge as to who may be a target.

Still, it’s worth mentioning that the press release for Englander’s plea agreement states that a businessman was working with investigators on “a public corruption investigation focused on suspected ‘pay-to-play’ schemes involving Los Angeles public officials.”

That last word is a plural not a singular, and the “s” isn’t there by accident.

Stay tuned.

RELATED: In Four Big Local Races, It’s on to Round Two

Stay on top of the latest in L.A. food and culture. Sign up for our newsletters today.