The Case of the Crooked Councilman

ON A BALMY evening in June 2017, hundreds of Los Angeles grandees packed together downtown to salute the latest addition to the city’s skyline—a billiondollar behemoth with a soaring glass crown that lit up like a futuristic pediment. The Wilshire Grand Center had opened to great fanfare. Yang-ho Cho, the chairman of Korean Air, had personally overseen the construction of the new building, which housed the airline’s North American headquarters. Rising 1,100 feet, it was the tallestbuilding in the western United States. Among the boldface names and corporate chieftains who addressed the crowd was a politician most of them had never heard of—a then-48-year-old Los Angeles City Councilman named José Huizar, who represented the Eastside and downtown. In a frothy speech the councilman toasted the mammoth project as a “true testament to downtown Los Angeles’s bright future and vibrant culture … a building that shines beautiful light—literally and figuratively—on our entire city.” Cho, who flew in from Seoul for the occasion, stood next to him, nodding and beaming.

As would soon become apparent, the Korean Air chairman wasn’t Huizar’s only foreign fan. The councilman was equally popular with Chinese developers who were building skyscrapers downtown. In 2009, after the Chinese government loosened restrictions on outside investments, mainland Chinese real estate speculators lined up to put their stamp on the L.A. skyline, pumping billions of dollars into landmark projects in the city’s reviving urban core.

Between 2014 and 2016, two out of every five land deals closed in downtown L.A. were financed by Chinese investors, generating headlines likethe one in The Real Deal that asked, “Is L.A. the New Shanghai?”

Thanks to a fractious political culture and a laundry list of cumbersome regulations, Los Angeles has long been a notoriously tough city for international developers to crack. The Chinese had all the money the market could absorb, but little know-how. Huizar was happy to lend a hand.

Huizar was not only the council district representative for downtown L.A.; he was also the chairman of the Planning and Land Use Management Committee, the powerful panel that reviews the city’s biggest development projects.

A former Huizar staffer says the councilman recognized two things about the Chinese: first, they didn’t know how things were supposed to work in America; second, they were used to how things worked in China, where bribing government officials was viewed as a normal part of business. Huizar thought he could be helpful on both counts. It is an unwritten rule of Los Angeles real estate that a council district is a fiefdom and a councilmember its lord, which made Huizar, a son of Mexican laborers, an improbable Medici of the downtown renaissance—a powerhouse at the center of the city’s greatest construction boom since the roaring twenties.

AN IVY LEAGUE-EDUCATED real estate lawyer with a dimpled smile and a weakness for pricey suits, Huizar, 51, comes off in person like an affable urban planner. But his smooth charm belies a hardscrabble childhood. When Huizar was four years old, his father, a seasonal laborer, resettled the family from a small village in Zacatecas, Mexico, to the Eastside barrio of Boyle Heights. As a child, José lived with several brothers and sisters in a tiny stucco home beside the 4th Street Bridge, a five-minute drive from City Hall.

People who knew Huizar then describe him as ambitious and impulsive. As a boy in the early 1980s, he would ride his bike through the neighborhood’s run-down warehouses and artist squats to deliver Japanese-language newspapers in Little Tokyo to afford the $80-a-month tuition at a Catholic high school after getting kicked out of public middle school for fighting. By his early teens he had seemingly turned his life around. Huizar attended UC Berkeley, then Prince ton, where he earned a master’s degree in public policy. He met his future wife on the admissions committee for La Raza Law Students Association at UCLA. He was elected school board president, appointed a Princeton trustee, and chosen among the “100 most influential Hispanics” by Hispanic Business Magazine. In 2005, after a brief stint on the LAUSD school board, Huizar won a special election to fill the 14th District seat vacated when Antonio Villaraigosa became mayor. Adept at courting powerful pals, he got Villaraigosa to back him for the job.

Thrice reelected by increasingly wide margins, Huizar loved the trappings of power. Night on Broadway, a phenomenally successful event he helped create, was decorated with massive photos of the councilman. But, for the most part, friends say, he tried to stay out of the spotlight. That low profile did not shield him from the scrutiny of the FBI, which became interested in Huizar in connection with reports of a massive “racketeering enterprise” that was being run out of City Hall by a renegade councilman. While the councilman’s identity has not been publicly revealed, it’s clear, based on details in the court filings, that the target of the investigation is José Huizar.

For at least six years, federal investigators have been closely monitoring Huizar’s financial dealings with some of the wealthiest real estate developers in China. Since 2014, the feds believe that the councilman has received more than a million dollars in bribes from Chinese investors for his assistance in the approval of large-scale high-rise projects poised to extravagantly reshape the L.A. skyline. The alleged bribes have taken the form of cash, political contributions, concert and sports tickets, flights on private jets, stays at luxurious hotels, casino gambling chips, expensive meals, and spa services. A Chinese billionaire hoping to build a 77-story skyscraper in Huizar’s district allegedly facilitated the payment of $600,000 to help the councilman resolve a sexual harassment lawsuit. (Huizar declined requests for comment.)

The feds’ interest in the councilman was sparked in 2016, when a Huizar assistant was caught converting thousands of Australian dollars to American dollars while evading bank reporting requirements. The FBI served a search warrant on Yahoo, requesting access to Huizar’s personal email account, and quietly began interviewing some of his closest associates. Among other things, they wanted to know about Huizar’s involvement in a 20-story condominium tower slated to be built on a dingy parking structure near the Ace Hotel. A shadowy union group with ties to Huizar had filed a legal challenge against the project, threatening a costly delay. The developer reportedly paid Huizar a bribe of hundreds of thousands of dollars to convince the union to back down. Huizar’s aide George Esparza, who admits to being part of the scheme, says he stuffed $200,000 of the developer’s cash into a liquor box that he dropped off at his boss’s Boyle Heights residence in March 2017. At the time, Esparza says, Huizar instructed him to store the money somewhere for safekeeping. But nine months later the councilman needed it back.

Three days after Christmas, on Holy Innocents Day, Huizar and Esparza met at City Hall, which was in recess until the New Year. The subject of the meeting was so sensitive that they huddled in the councilman’s private lavatory to discuss it. By then the councilman must have sensed that his hard-won career was at risk: The FBI was turning up the heat, and news of the grand jury investigation was spreading. Visits from the feds that summer had spooked Esparza.

Huizar was sympathetic but nonplussed. Term limits were threatening to separate the councilman from everything he had built in the 14th District. In three years’ time he would be just another lame duck, and so he was eager to pass the mantle to his wife, ensuring that his lucrative council seat remained in the family’s control until 2032.

FOR THE PAST few months, as much of the city has been distracted by the pandemic, many of the city’s political players have been laser-focused on the burgeoning corruption scandal that threatens to topple some of the most powerful people in the city government—the worst disgrace to befall City Hall in almost a century.

The “persons of interest” described in the Justice Department’s sprawling investigation include at least four current and former members of the L.A. City Council; a former deputy mayor for Planning and Economic Development; and a former Public Works commissioner. Other targets include a former chief of the Department of Building and Safety Code Enforcement Bureau; three current and former city staffers; a Korean American investment group; at least four of the biggest Chinese developers in L.A. real estate, among them the chairman of one of the top real estate companies in China; a political fundraiser; a politically connected law firm; a real estate consultant; a labor organization; three lobbyists; and a businessman.

At press time, four people have pleaded guilty to the government’s charges and have been cooperating with authorities. Among them is former 12th District Councilman Mitchell Englander, who admitted that he accepted envelopes of cash from a businessman seeking official favors. John Lee, Englander’s former chief of staff and his successor as councilman, is also cooperating with investigators. Lee told them about a lavish, all-expenses-paid trip he took with Englander and others to Las Vegas courtesy of a real estate developer. Their playing-around money included $10,000 cash in an envelope, $1,000 in casino chips, $25,000 in nightclub bottle service, and “services” from two escorts.

In addition to Esparza, two other Huizar associates—a political fundraiser and a real estate consultant—have admitted to their roles in the bribery scheme. But court papers identified the investigation’s central target as a councilman who is running a criminal racketeering enterprise involving bribery, extortion, money laundering, and fraud. The records do not mention the councilman’s name. But as soon as the documents were released, it became clear that they referred to Huizar.

The mild-mannered councilman seemed like an unlikely criminal mastermind. But his meteoric rise has long been clouded by vague rumors of misconduct. Over the years he has been hit with lawsuits from former staffers for harassment and retaliation, twice accused by female staffers of sexual harassment, and admitted to a messy extramarital affair. In 2011 the Los Angeles Times reported that his office had compiled “power lists” ranking community members based on their clout and their level of support for Huizar. LA Weekly described him as a councilman with “a walk-in closet’s worth of skeletons.” But despite occasional missteps, his popularity in his Eastside district kept increasing.

However, his rise to real prominence began in 2011, when a city-appointed panel moved Little Tokyo, Skid Row, the Civic Center, Grand Avenue, and Bunker Hill out of the 9th District of Councilwoman Jan Perry and into Huizar’s 14th. Perry, who was termed out in 2012, says the seed for the ongoing federal corruption probe was sown during the redistricting fiasco. “The essence of transactional politics is reward and punishment,” she says.

Rudy Martinez, a onetime A&E reality-TV star and an old friend of Huizar’s, also remembers those years as a turning point. Their friendship frayed after Huizar refused to pay Martinez for work he had done on his rental property. Then, Martinez says, he received an unexpected visit from the FBI. Agents were mainly interested in what he knew about a possible pay-to-play scheme in the councilman’s district.

Martinez, who ran against his old friend in 2011, claims that disgruntled Huizar staffers fed him information about a scheme to “extort business and property owners and pick up checks … in order to get licenses and things like that.” Eric Hacopian, who managed Martinez’s campaign, says the 2011 allegations were “chickenshit stuff” compared to the hair-raising sums described in the FBI’s recent racketeering case. After redistricting gave Huizar a foothold downtown, Hacopian says, “his corruption became industrial-scale.”

HUIZAR WAS REELECTED in 2015, but term limits prevent him from running again. The councilman owed that victory to a Chinese billionaire who put up $600,000 to help settle a sexual harassment suit just before the election. Now the billionaire was threatening to collect. The youngest of Huizar’s four kids was ill with leukemia. As Huizar’s money woes and family stress mounted, sources say, a blatant pay-to-play system in Huizar’s office escalated. Major developments were stalled or approved on a whim over “labor disputes”; oversight of the $700 million Luxe City Center project was transferred to Esparza, who had no background in land use. Huizar became paranoid and moody—former staffers say even signing off on a routine permit application could send him into a fury.

“No, no, no, they need to meet with me!” a former staff member recalls him raging. Huizar would praise the staff of another member of the City Council who refused to approve an alcohol permit unless the owner paid $10,000 to a deputy. “He wanted to be more like [that councilmember],” the ex-staffer told me.

More than a year before the campaign, Huizar began publicly positioning his wife, attorney Richelle Huizar, as his successor. At a Los Angeles Current Affairs Forum in 2017, he let it slip that his wife was considering a run, commenting that she’d make “a great councilwoman.” Signage at public events was changed to “Team Huizar.” Richelle began appearing prominently at his side.

Kevin de León, who ran for U.S. Senate in 2018, was also eyeing the open council seat. Huizar was planning a shock-and-awe campaign to dissuade him. He assiduously cultivated the support of labor and big business, and wanted to raise a serious campaign war chest. But he needed Esparza’s help.

The 33-year-old Esparza grew up in Huizar’s neighborhood. He started off as the councilman’s chauffeur and soon became his most trusted aide. He managed the Huizar family Christmas card list, met with developers seeking to do business in the district, and accompanied his boss on more than a dozen trips to casinos in Las Vegas and Australia between March 2013 and November 2018.

On December 28, 2017, Esparza and Huizar huddled for the fateful meeting in the councilman’s exquisite private bathroom at City Hall, their conversation captured on a listening device nearby. In hushed tones, they discussed Esparza’s interviews with the FBI, and a cash bribe from the Korean developer that Esparza was holding for safekeeping. “I have a lot of expenses now with [Richelle] running. [Richelle’s] not going to be working anymore. I’m gonna need money. That is mine, right?” Huizar asked, referring to the bribe. “Yup,” Esparza replied.

A year later, federal agents raided Huizar’s home and offices, carting off stacks of paperwork. Soon after, Richelle ended her campaign and Huizar was stripped of his committee assignments. Then- Council President Herb Wesson, who once proclaimed Huizar “my best friend,” removed him from all committees that handle planning, economic development, election rules, and state legislation.

In May, new City Council President Nury Martinez asked Huizar to avoid council meetings until the investigation was over. He reluctantly agreed. As of May 28, he was still drawing his $200,000 annual salary, and no charges have been filed against him. The results of the search warrant of his property remain undisclosed. Greg Coleman, a retired FBI special agent who took down “Wolf of Wall Street” Jordan Belfort, says there are two likely explanations for the government’s uncharacteristic restraint. Either prosecutors are being extra cautious about reeling in such a big fish, or he’s been charged and is cooperating to help them bag someone bigger. Either way, stay tuned.