Could Jose Huizar’s Arrest Lead to a Bigger Fish in the City Hall Corruption Scandal?

As U.S. Attorney Nick Hanna suggested, L.A. should ”stay tuned”

Two weeks ago, jaws across Los Angeles hit the floor when the U.S. Department of Justice announced that District 14 Councilman José Huizar had been arrested. The longtime Eastside politico faces a racketeering charge and is accused of riding herd on an expansive pay-to-play scheme targeting the real estate development industry. Court documents allege that Huizar and other members of a criminal enterprise secured more than $1.5 million in cash bribes and other illicit benefits, and in exchange helped push favored projects forward. Huizar is scheduled to be arraigned on July 20. If ultimately convicted, he faces up to 20 years in federal prison.

The councilman was the fifth person, and by far the biggest name, ensnared in the long-running City Hall corruption investigation. However, some observers expect that more charges will follow, and that prosecutors will seek to reel in an even bigger fish. Who winds up on the end of the hook is a guessing game, but the process could involve Huizar turning on someone else.

“City Hall is like high school. Everybody knows what everybody else is up to,” says Jack Weiss, who has a unique perspective as both a former council member and an ex-federal prosecutor. “There are millions of dollars that are going into the pockets of council members, casino chips and private jet trips, and you have developers and lobbyists and council staff and city staff chatting about it. All that’s in the charging document so far. So you take all that, and you tell me that no one else in City Hall knew about this? BS. You take all this and tell me no one else in City Hall looked at what these guys were getting and didn’t also want a piece of that? I say BS to that, too.”

Weiss continues, “I have no doubt there are other guilty parties here, and the feds are still systematically building those cases as we speak.”

There have been hints and insinuations that indicate Weiss’s suspicion might be true.

Several indicators lend credence to the suspicions of Weiss and others.

Comments made by U.S. Attorney Nick Hannah during a press conference announcing Huizar’s arrest may offer the most direct clue.

The most direct clue comes in comments made by Nick Hanna, the U.S. Attorney for the Central District of California, during a press conference announcing Huizar’s arrest. Hanna multiple times asked for anyone with additional information about the alleged scheme to contact federal authorities. He also repeatedly stressed that the investigation is “ongoing.”

Some might shrug at the request for help and saying “ongoing” a few times. But those familiar with the tactics of federal investigators point out that every word, and sometimes every letter, in a DOJ statement is carefully considered and fully intentional. Hanna may been soliciting additional information, and at the same time informing a small pool of potential defendants that the proceedings are not slowing down, and it might behoove them to get ahead of the game.

Perhaps even more telling is something that was largely overlooked amid the cyclone of discussion following Huizar’s arrest: despite being charged with one count of violating the RICO statute, the DOJ rolled out not an indictment, but rather a criminal complaint, and backed it up with a 116-page affidavit that goes into excruciating detail chronicling alleged crimes and sordid activity, everything from Huizar receiving six-figure cash bribes, to enjoying trips to Las Vegas and Australia casinos bankrolled by a Chinese real estate executive, to being provided with the services of escorts by a downtown business person.

“It is unusual for the U.S. Attorney to proceed by complaint. It is almost always by indictment,” said one observer deeply familiar with federal investigations.

Weiss, who now runs Pacific Intelligence & Cyber, a Los Angeles investigation boutique, painted the complaint as something of a very serious warning shot, informing Huizar and his legal counsel of everything that prosecutors could unleash.

Weiss believes that the message to Huizar from the feds is clear.

“He can cooperate and maybe help himself a little and maybe also ensure that his relatives are not prosecuted. Or, he can go down guns blazing by an indictment, which the U.S. Attorney can get in the next few weeks,” Weiss says.

The reference to the relatives could foreshadow a negotiating point. Court documents refer numerous times to a relative who was seeking to run for Huizar’s post. Although no one has been named, that indicates his wife, Richelle Huizar, who launched a campaign for the District 14 seat in September 2018, but abandoned it two months later after FBI raids of the councilman’s home and offices (the other 14 council members recently voted to suspend Huizar, and City Controller Ron Galperin announced he would not be paid, but Huizar still holds his seat).

The affidavit also refers to two additional Huizar relatives. Although they also are not identified by name, their alleged misdeeds are referenced in a chapter titled “Money Laundering Through Family Members.”

Cumulatively, the moves could be an effort to persuade Huizar to cooperate with investigators, just as the four others pleading guilty—former District 12 Councilman Mitch Englander, real estate players Justin Jangwoo Kim and George Chiang, and former Huizar aide George Esparza—have all agreed to work with federal authorities in exchange for having their potential prison time reduced.

That prospect leads to a fascinating question: If Huizar is turned, who might be targeted?

Here there’s only speculation.

One possibility is a figure who in court documents was depicted as being a key member of the criminal enterprise, and who was described as the former general manager of the city Department of Building and Safety, and later Deputy Mayor for Economic Development. Those details match up to the career arc of Ray Chan, who has not been arrested or charged with a crime. In media reports his attorney has stated that Chan has done nothing wrong.

Weiss posits that even if Chan is in the crosshairs of investigators, he may not be the only one.

“It would be possible, but not likely, that you would lean on a councilmember to give you evidence solely on the one former deputy mayor that you know about already,” he says. “That seems like an imbalance. That’s why I think there is more than one target in their sights.”

Observers wonder whether some of the real estate executives who are alleged to have paid bribes could be targets. Also discussed are elected officials in the region, though no one is saying names on the record, and there have been no public indicators that any other area officeholder has been questioned by investigators.

By many accounts, there is more to come. That was the message from Hanna when he appeared on “News Conference,” the NBC4 program hosted by Conan Nolan, the Sunday after Huizar’s arrest. Nolan asked him why no developers have been charged.

“The investigation is ongoing,” Hanna responded. “We are going to follow the evidence wherever it leads. We will bring all appropriate charges.”

Then he added, “And stay tuned.”