Federal prosecutors launched their second attempt to convict former Los Angeles Deputy Mayor Raymond Chan on corruption charges this week by portraying him as a central figure in a sprawling “pay-to-play” scheme.
In opening arguments Tuesday, an Assistant U.S. Attorney said. Brian R. Feirstein told jurors that Chan and former City Councilman Jose Huizar used the downtown real estate boom of the previous decade to enrich themselves and their allies.
Feierstein described Chan as an important intermediary between Chinese developers looking to build high-rise buildings downtown and Huizar, who chaired the powerful committee that served as a clearinghouse for such projects.
“[Chan] “He took bribes for himself, and he took bribes for other public officials,” Fairstein said.
Chan's first trial on charges of racketeering, bribery, honest services fraud and lying to federal investigators was derailed after his attorney, Harland Brown, was hospitalized and unable to return to work for several months. A judge declared a mistrial in April.
Chan is the latest defendant charged in the City Hall corruption probe, dubbed “Casino Loyale” by the federal government, to stand trial. Huizar, who pleaded guilty to racketeering and tax evasion charges, was sentenced in January to 13 years in prison.
Jorge Esparza, a former associate of Huizar, has pleaded guilty to racketeering conspiracy but has not yet been sentenced. He is scheduled to testify against Chan. Real estate consultant George Chiang, who worked with Chan and also pleaded guilty to racketeering, is also expected to testify.
John Hanoch, Chan's new lawyer, agrees that Huizar and the others were deeply corrupt, committing crimes on a scale that was “cinematic in scope.” But while Huizar and Esparza accepted flights to Las Vegas, casino chips and lavish hotel stays, Chan received none of those things, he said.
While working with developers, Chan was driven not by greed but by a desire to make Los Angeles more business-friendly, Hanush said.
“There was no quid pro quo in this case with Ray Chan,” he said. “With José Huizar, it was definitely there.”
Hanush told the jury that some of the government's witnesses are liars and committed crimes, and they now hope their testimony will lead to a lighter prison sentence.
The case against Chan covers the five-year period from 2013 to 2018, when Huizar was in charge of the council's Planning and Land Use Management Committee. In that position, Huizar had the power to decide when real estate projects would get a public hearing and when they would be sent to the full council for a vote.
Chan was the chief executive officer of the Department of Building and Safety until 2016, when he became deputy mayor in charge of economic development under Mayor Eric Garcetti. He held that position for a little more than a year, then left city government to become a private sector consultant, representing real estate developers.
Prosecutors accused Chan of secretly creating a consulting firm while working for the city and overseeing government actions that a developer paid him for after he left his job with the city.
The federal government also alleges that Chan helped Huizar obtain a bribe from a Chinese developer who later sought to build a 77-story skyscraper in the Huizar area. Huizar later admitted that the developer helped him obtain a $600,000 loan that he secretly used to settle a sexual harassment lawsuit filed by a former employee, just before the re-election campaign.
Prosecutors said Chan helped Huizar obtain the money after Huizar blocked a proposed merger of the City Planning Department and the Construction and Safety Department. Prosecutors said the merger threatened Chan's job as general manager at the construction and safety company.
Shen Zhen New World I, the company that proposed the 77-story tower, was convicted of offering a wide range of bribes to Huizar, including trips to Vegas. The judge imposed a fine on the company of $4 million. Its owner, Wei Huang, fled the country and is now a fugitive, according to the Justice Department.
In his statements, Hanush described the case brought by the government against Chan as a “fiction.” He said Chan was a respected city leader with decades of experience who focused on removing bureaucratic obstacles to new construction.
“He rolled out the red carpet” for real estate development, the lawyer said. “And this city has benefited.”
