The FBI Is Shaking Up LA City Hall. They May Be Looking For Chinese Money

Greenland USA's "Metropolis" development pictured on the left, over the 110 freeway. (Matt Tinoco/LAist)

An unearthed 2018 federal search warrant reveals that the FBI's corruption investigation into activities connected to Los Angeles City Councilmember Jose Huizar reaches much deeper into City Hall than previously known.

Huizar, his family, and his staffers are named in the warrant. Authorized in July and returned in November, its existence was tweeted Saturday night by Seamus Hughes, a counterterrorism expert at George Washington University.

Judging by the warrant, the corruption probe revolves around high-rise development projects in downtown Los Angeles funded by Chinese investment companies. Although the warrant was issued under several federal crime statutes, including money laundering and bribery, the investigation is ongoing.

No individual or company has been publicly arrested or charged with wrongdoing and a mention in the warrant is not evidence of crimes.

But the warrant paints a broad picture of the bureau's investigation into City Hall, one that reaches into the L.A. Department of Building and Safety and the Board of Public Works, touches at least two other council members or their staff, and names a former deputy mayor to Mayor Eric Garcetti.

"There's no question that money talks. According to the Supreme Court, it's entitled to talk, advertise, and spend money on political campaigns," said Clayton Dube, who heads USC's U.S.-China Institute. "The difference is foreign money. Foreign money is not supposed to be in the political mix, and that's a potential issue. When I saw the story (in the Los Angeles Times), I said to my wife, 'It's interesting that the companies named are all Chinese companies.'"

Read on to see what we know and don't know at this point.

WHERE DID THE FBI LOOK FOR EVIDENCE?

The warrant executed asks Google Inc. for communications and other data from a Gmail account held by Raymond Chan, a longtime L.A. Department of Building and Safety employee, who headed the division for three years before he retired in 2016, initially drawing an annual pension of over $160,000.

After leaving the building department, Chan served in the mayor's office as Garcetti's deputy mayor for economic development before leaving in June 2017.

Since departing the mayor's office, Chan has emerged as an active political donor in local politics. His contributions have gone to Huizar and four other sitting L.A. council members, according to city election records.

WHAT POTENTIAL CRIMES ARE THE FBI INVESTIGATING?

The warrant suggests the FBI is looking for evidence of several federal crimes: conspiracy, bribery and kickbacks concerning federal funds, deprivation of honest services, extortion, money laundering, and structuring a financial transaction to evade a reporting obligation.

Companies named in the warrant indicate federal agents are interested in development projects that need approval from the City Council, some of which received financial aid in the form of taxpayer dollars.

HOW FAR INTO CITY HALL DOES THE PROBE REACH?

In a word, deep.

Prior to this warrant's publication and based on a search of Huizar's office and home, we knew the FBI was investigating the councilman.

The warrant corroborates that by naming him, his mother and brother, and multiple current and former Huizar office staffers. KPCC/LAist reached out to Huizar's office and was referred instead to his attorneys. The response: "We have nothing to add."

The warrant also seeks records involving Councilman Curren Price, whose 9th Council District touches parts of the Figueroa corridor, the Exposition Park area, and South Central Los Angeles. Reached by email, Price's communications director Angelina Valencia offered the following statement: "Councilmember Price has not spoken to any investigators and is not aware of any of the matters listed in the warrant. However, he will cooperate fully in any investigation."

The document also names Council President Herb Wesson's chief of staff, Deron Williams; Lincoln Lee, who headed L.A.'s code enforcement division until he retired in 2016; and Joel Jacinto, a Garcetti appointee to the city Board of Public Works.

And then there's Raymond Chan, the man whose email account was searched. Chan worked for the city's building and safety department for more than three decades. Mayor Garcetti appointed him the interim head of Building and Safety in 2013. Chan was named the permanent director the next year. After he left that post, he spent a year as deputy mayor for economic development in Garcetti's office.

Asked about the warrant on KPCC's Take Two, Garcetti said "it doesn't matter who you are or what your title is, city employees need to be held to the highest ethical standards. And my expectation is that anybody asked will help the FBI with this investigation."

Chan couldn't immediately be reached for comment. Reached by email, Council President Wesson's assistant chief deputy Ed Johnson wrote: "No one has contacted our office about any of this. We have no information other than what has been reported."

WHO ELSE DOES THE WARRANT NAME?

Also named in the warrant are several other names tied to Chinese-based real estate companies. Among them are Wei Huang, a billionaire developer who Jose Huizar commended in a 2014 council resolution, and Mason Situ, general manager of developer Shenzhen Hazens.

And then there are the development companies themselves, all mainland Chinese companies. Four are named in the search warrant, including Oceanwide Holdings, Greenland USA, Wei's Shenzhen New World and Situ's Shenzhen Hazens.

The warrant also specifies it seeks information on "other foreign investors not yet identified."

Oceanwide is responsible for Oceanwide Plaza, the billion-dollar, three-tower complex across the street from the Staples Center. It's set to open later this year, and comes with 504 condominiums, a five-star hotel, and lots of L.A. Live-like retail. It also features an LED screen that is 100 feet tall and a block long.

Greenland USA is finishing work on the shiny, four-tower Metropolis development perched over the 110 freeway. It also cost $1 billion to build. Three towers are condos, one of them the Hotel Indigo. The hotel and tallest of the residential towers are reportedly for sale, according to Curbed LA.

Shenzhen New World wants to build what would become the tallest building in Los Angeles. The company purchased the L.A. Grand Hotel, named in the warrant, in 2010, and announced plans in June to erect a 77-story building with condos, apartments, and hotel rooms, converting the existing hotel into apartments. In 2011, the company purchased the Sheraton Universal Hotel, in Universal City, also named in the warrant.

Shenzhen Hazens proposes razing the Luxe Hotel, also named in the warrant, located at 1020 S. Figueroa St., and replacing it with a twin-towered commercial, residential, and hotel development, with 435 condos, 300 hotel rooms, and 80,000 square feet of commercial space.

Hazens also owns the LAX Sheraton.

WHAT HAPPENS NOW?

As with any federal corruption investigation about potential foreign influence in U.S. politics, the wheels turn slowly. Until the FBI finishes the investigation, it's a waiting game.