Corruption trial shines light on Los Angeles City Hall
The U.S. Department of Justice released a photograph of a Don Julio 1942 tequila box with the lid open, its gold lining shimmering above the contents of the box – ten thick stacks of bundled $100 bills.
The first trial resulting from the FBI's investigation into public corruption at Los Angeles City Hall is underway.
According to prosecutors, former City Council member Jose Huizar ran a criminal enterprise in Council District 14. Last week, Huizar's former political aide, George Esparza took the witness stand and testified for three hours in the trial of real estate developer Dae Yong “David” Lee, who has been charged with bribery, wire fraud and obstruction of justice. Prosecutors say he paid a $500,000 bribe to get Huizar's support for city approval of a planned 20-story, 232-unit residential building on Olympic Blvd.
The city planning department had signed off on the project in July 2016, but weeks later a group that represents construction trade unions filed a challenge to the project. Lee needed help to get through the approval process.
Now we'll play L.A.'s favorite game, “Is it Bribery or Extortion?!”
Esparza, who pleaded guilty in 2020 to a charge of racketeering conspiracy but has not yet been sentenced, described his work for Councilmember Huizar. “He would say, `OK, hit these guys up,'” Esparza testified, “`Let's see if they're willing to play.'”
Esparza said Huizar kept a spreadsheet of projects in development with the names of their consultants and the “ask” for each for each one, and it was his job as the councilman's “special assistant” to find the key person for each developer with a project in the district and then “hit these guys up” for political donations or other things of value.
“I was taught to be very clear on what the message was,” Esparza testified. “If you don't help the councilman with his requests, your project will be stalled.”
If that happened, is it bribery or extortion?
Lee's lawyers say he thought he was paying for legitimate consulting services. Lee hired Justin Kim, a real estate consultant, to help make the labor group's challenge go away. Esparza testified that in September 2016, he brought Huizar and Kim to a dinner meeting followed by a karaoke party that included the services of “escorts.”
Esparza said Huizar was in a great mood on the ride home. “Nothing made him happy more than money and women,” he testified.
The “ask” was allegedly $1.2 million to be split between Huizar, Kim and Esparza, but allegedly Lee made a counteroffer of $500,000, which was accepted. Esparza testified that he picked up the first bag of cash from Kim in February 2017, and that's when he delivered $100,000 to Huizar.
In March 2017, following a meeting between Huizar and a lobbyist for the labor group, the challenge to Lee's project was dropped. Esparza testified that he picked up another sack of cash and delivered it to Huizar in a Johnnie Walker Blue Label box.
Is it bribery? Is it extortion? Is it a plagiarized script from something on Netflix?
More likely, it's business as usual in Los Angeles, where the planning and approval process seems intentionally Byzantine and impenetrable. If the city's motto isn't “Pay to Play,” it's only because somebody wants too much money to approve the contract to change all the plaques.
Justin Kim, who is also a witness in Lee's trial, pleaded guilty to a federal bribery charge in 2020. Another developer involved in the corruption case, Shenzhen New World I, will go on trial in October. Huizar, who has pleaded not guilty to racketeering, bribery and other charges, is scheduled to go on trial in February.
The FBI's investigation into public corruption in Los Angeles has also reached into the city-owned Department of Water and Power, where insider dealings enriched various people through lawsuit settlements and lucrative contract awards, and into the City Attorney's office, where some of the deals were arranged. There have been a number of guilty pleas and there are a number of cooperating witnesses.
It's up to the jury to decide whether David Lee is guilty of bribery. It's up to the voters to clean out the barn at City Hall.