LA WATCHDOG - Real estate developer Dae Young Lee (aka David Lee) was found guilty on June 27 by a jury of three federal criminal charges for his role in providing $500,000 in cash to then City Councilman Jose Huizar in exchange for his help in resolving an appeal by a group of construction trade unions of the permit for Lee’s 20 story residential development at 940 Hill Street in downtown Los Angeles.
There are three takeaways from this guilty verdict.
First and foremost, Jose Huizar’s goose is cooked based on the testimony of George Esparza, his special assistant who was one of the bagmen who facilitated the transfer of the cash in a Johnnie Walker Blue Label box. While Esparza has agreed to plead guilty in 2020 to a federal racketeering charge in this pay-to-play bribery scheme, he was a very credible witness because of his intimate involvement in Huizar’s criminal enterprise. He also kept detailed notes in case Huizar tried to make him the fall guy.
Huizar and former Deputy Mayor Raymond Chan are scheduled to go to trial on February 21, 2023, on federal charges alleging they conspired to violate the Racketeer Influenced and Corrupt Organizations Act.
The second takeaway is the exposure of the tactics used by the construction trade unions to force developers to enter into project labor agreements. In this case, CREED LA (www.creedla.com), a coalition of construction trade unions, filed an objection to the 940 Hill Street building permit under the California Environmental Quality Act. If upheld, this would require an Environmental Impact Report that would delay the completion of this 420,000 square foot development by two years. But Huizar made this appeal disappear after Lee “greased the skids,” saving David Lee an estimated $30 million.
One question: what, if anything, did Huizar promise or provide to the unions and their managements so that they would agree to drop their appeal?
Finally, this guilty verdict raises the question of whether the Nury Martinez led City Council will sponsor a ballot measure to eliminate Section 245(e) of the City Charter. This provision allows the City Council to insert itself directly into the planning process, thereby providing leverage for Councilmembers to demand campaign contributions and other benefits from real estate developers. See the recent CityWatch article, The Nury Martinez City Council Condones Corruption. Or will it be business as usual where corrupt pay-to-play scheme is standard operating procedure?
The next scheduled trial in the Huizar corruption scandal is schedule for October 18 where Chinese billionaire Wei Huang, currently a fugitive, and his company, Shen Zhen New World I LCC, are charged with bribing Huizar to facilitate the redevelopment of the LA Grand into a 77 story tower.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. He can be reached at: firstname.lastname@example.org.)