Final Bang in Casino Loyale Bribery Scandal Detonates for José Huizar

Cityside Column: The disgraced councilman’s deal agreement caps a four-year saga, but the ugly ramifications continue
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From the instant the story broke, the José Huizar bribery and corruption scandal has been full of bombshells that detonate unpredictably and with a City Hall-shaking force. So it’s only fitting that what may be the last major development—the embattled former District 14 councilman has agreed to plead guilty to racketeering and tax evasion, and is likely facing a sentence of nine to 13 years—also burst on Thursday with not a word of advance notice.

“I understand the terms of this agreement, and I voluntarily agree to those terms,” Huizar states on the 24-page document signed and dated Jan. 18. He soon adds, “I am pleading guilty because I am guilty of the charges and wish to take advantage of the promises set forth in this agreement, and not for any other reason.”

The agreement notes that if found guilty at trial, the ex-power player could have faced up to 25 years in prison and a $350,000 fine.

Modern Los Angeles has never seen anything like the Huizar saga. Every move and development in the long-running and ultimately tragic story was explosive and embarrassing to the local government. It began with the out-of-nowhere, Nov. 7, 2018 raid of Huizar’s home and offices, wherein FBI agents in blue jackets hauled away boxes from his City Hall suite, and a cute sniffer dog, Ginger, was seen outside his Boyle Heights residence.

There was a long period of quiet as federal investigators pored through paper and digital documents and interviewed witnesses. In the immediate aftermath of the raid, Huizar was stripped of his committee assignments, including his post chairing the Planning and Land Use Management Committee, which holds tremendous sway over some very large projects. At the same time, his wife, Richelle, was forced to abandon her nascent campaign to succeed her husband on the Council.

There was the March 9, 2020 indictment of former District 12 councilman Mitch Englander, also caught up in what came to be known as Operation Casino Loyale. Federal prosecutors accused the ex-Valley rep, who in late 2018 had suddenly and oddly quit his powerful political post so he could join a sports and entertainment firm, of accepting $10,000 in cash, the services of an escort, and more—all provided by a businessperson who wanted more clients in Los Angeles. Englander would later plead guilty to one count of falsifying material facts and be sentenced to 14 months in prison (though he would serve much less time).

There was the indictment and arrest of Huizar on June 23, 2020, more than 18 months after the raid. Federal prosecutors asserted that the Eastside Council rep had helmed a criminal operation—the feds labeled it the CD-14 Enterprise—and accepted $1.5 million in bribes and kickbacks in exchange for pushing forward certain real estate development projects in Downtown L.A. The case’s 116-page affidavit would detail Huizar’s role in operating a “pay-to-play” scheme in City Hall, and described how investigators seized $129,000 in cash they found in a closet in his home (in the plea deal, Huizar agreed to forfeit the money). He would be hit with one count of conspiring to violate the Racketeer Influenced and Corrupt Organizations (also known as RICO) Act, which is typically used in organized crime cases.

The boom was even louder in December 2020, when federal prosecutors issued a 41-count “superseding indictment,” laying out new allegations against Huizar and Ray Chan, a former deputy mayor and onetime general manager of the City Department of Building and Safety. It asserts they ran a scheme to get developers to pay up if they wanted their projects approved (Chan has maintained his innocence and awaits a trial next month). A 138-page document was thick with excerpts from many text messages, phone calls, and more.

Calling the proceedings sprawling is almost an understatement. Ultimately, nine people would be charged by federal authorities, and five side players—former Huizar aides and advisors, a real estate consultant, and others—would plead guilty in exchange for agreeing to cooperate and testify in future trials.

Speaking of trials, there were already two of them, with developers being found guilty of bribing Huizar. In the first one, held in the summer of 2022, federal prosecutors methodically dismantled Dae Yong “David” Lee’s argument that he thought the $500,000 he funneled to Huizar was going to consultants who would help quash a union challenge to his project, and not to the politician’s pocket. A jury didn’t buy it.

Federal prosecutors rarely share their strategies, but it looked like the conviction of Lee and a few months later, of the head of the firm Shen Zhen New World I LLC, was a legal test case of sorts, proving that the evidence resonates in court.

Those results had to have shaken Huizar and his attorneys. But the DOJ had even more munitions, including one that literally hit close to home. In October, prosecutors—in another never-saw-that-coming blast—revealed that Huizar’s brother, Salvador, had admitted to lying to federal investigators about his role in converting cash to checks or paying his little brother’s expenses. A DOJ statement said that over a five-year period from 2013-2018, Salvador Huizar “accepted envelopes of cash from José Huizar on at least 20 occasions.”

A later line in the statement was even more devastating, simply reading” “Salvador Huizar has agreed to cooperate with the government’s ongoing investigation and has agreed to testify at the next two trials in the case.”

The first of those was the one for Shen Zhen New World, and not only did Salvador Huizar take the stand, but so did Huizar’s ex-wife and mother.

The second trial would have been the one for José Huizar himself, adding a dark patina to the phrase “family affair.” That, of course, is now off the books.

It is hard to overstate the ripples and ramifications of the case. The initial raid was four years ago, and the ensuing legal proceedings and revelations of the dirt in the real estate development process harpooned public trust in local government. The sentiment was only exacerbated by October’s leaked audio scandal that took down Council President Nury Martinez. Lines are also being drawn to Huizar’s successor in District 14, Kevin de León; he was heard on that leaked audio, and now, he has taken flack from all sides. He continues to resist calls to resign.

This week’s plea agreement seems to bring a sense of finality to Operation Casino Loyale, but it’s always possible there is another act to come. Federal authorities have long and purposefully described the investigation as “ongoing,” and one has to wonder if Huizar, after fighting for years, has agreed to provide evidence and testify against someone else, whether Chan or a figure not yet revealed.

In any case, the legal story is nearly over for a person who, for years, was one of the most powerful figures in Los Angeles. It’s an undeniable tragedy.

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