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'Absolutely Stunning' Indictment Alleges Former LA Councilman Englander Took Cash Payouts In Casino Bathrooms

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Former Los Angeles City Councilman Mitch Englander, who represented the north San Fernando Valley, including Northridge, West Hills and Porter Ranch. (Mae Ryan/KPCC file photo)
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By Brian Frank, Elly Yu and Libby Denkmann

The allegations read like a Hollywood screenplay, with cash exchanges in casino bathrooms, pricey dinners and tens of thousands of dollars spent on alcohol.

Former Los Angeles City Councilman Mitch Englander today surrendered to federal authorities on charges that he "obstructed an investigation into him accepting cash, female escort services, hotel rooms and expensive meals from a businessman during trips to Las Vegas and Palm Springs, and later lied to the FBI about his conduct," according to a statement from the FBI.

In federal court this afternoon, Englander pleaded not guilty.

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He was scheduled to be released on $50,000 unsecured bail, including conditions that he turn over his seven firearms, not have contact with any witnesses or co-defendants and not leave California without permission. Englander wore a black fleece zip-up pullover when he appeared in front of Judge Patrick J. Walsh at the Roybal Federal Building and Courthouse in downtown Los Angeles.

His attorney, Janet Levine released this written statement on the steps of the courthouse:

"Mitch is proud of the work he has done to serve his community both as a volunteer reserve police officer and public official. Despite this setback, with the support of his family and friends, he looks forward to continuing his lifelong contributions to the community that has given him so much."

THE INDICTMENT

The seven-count indictment was returned by a grand jury on Jan. 16 and not released until today. It alleges that Englander "schemed to cover up his acceptance of cash payments, expensive meals and escort services from a businessman – identified in the indictment as Businessperson A – who operated companies in Los Angeles relating to major development projects and sought to increase his business opportunities in the city." Businessperson A later cooperated with federal investigators.

"It's absolutely stunning, but at the same time this is now our fourth open investigation into L.A. City Hall. So it's in some ways par of the course," Rob Quan, an organizer with the advocacy group Unrig L.A. told us.

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Englander, 49, represented L.A.'s 12th Council District from 2011 to 2018. He stepped down unexpectedly in the middle of his term to take a private sector job with an entertainment and sports facilities company. That company, the Oak View Group, was founded by the former chief executive of AEG, the entertainment giant behind Staples Center and L.A. Live in downtown L.A.

Englander served on the Planning and Land Use Management Committee, known as PLUM, which oversees some of the most significant development projects in L.A.

'PAY-TO-PLAY'

The charges in the indictment stem from an ongoing investigation into corruption at City Hall that includes multiple suspected "pay-to-play" schemes involving multiple city officials, developers, investors, lobbyists and others. In late 2018, FBI officials searched the home and office of Councilman José Huizar, who represents portions of downtown L.A., Boyle Heights and northeast L.A. Huizar has not been charged publicly.

Los Angeles Mayor Eric Garcetti said in a statement today "there is a sense of outrage whenever anyone who works in this building is alleged to have violated the trust that our constituents place in them."

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"We need to get to the truth, whatever it is — and my expectation is that any City employees with knowledge or information will cooperate fully with the investigation if called upon by the FBI,” Garcetti said.


Players in the indictment:

  • Businessperson A: Described as operating "businesses in the city relating to major development projects."
  • City Staffer A: Described as "City Councilperson A's special assistant from June 2013 to approximately January 2018."
  • City Staffer B: Described as a "high-ranking staff member for Englander until June 2017."
  • Lobbyist A: Described as being registered with the city.
  • Lobbyist B: Described as "a close associate of Englander."
  • Developer A: Described as a "real estate developer and architect who operated his own architectural, planning and development firm."
  • Developer B: Described as the "chief executive officer and owner of a construction company" in L.A.

THE ALLEGATIONS

Among the allegations of inappropriate payments:

  • $24,000 for bottle service on occasion paid for by Businessperson A.
  • $10,000 for bottle service paid on the same night by Developer B.
  • $10,000 cash in an envelope handed to Englander by Businessperson A in a Las Vegas casino bathroom.
  • $5,000 cash in an envelope handed to Englander by Businessperson A in the bathroom of the Morongo Casino.
  • $2,500 bill for dinner and drinks with a lobbyist, developer and businessperson
  • $300-$400 for two escorts.

A week after the second exchange of cash in a bathroom, the indictment says Englander introduced Businessperson A to Developer B at a lunch.
According to the indictment, Englander "knowingly and willfully falsified, concealed, and covered up by trick, scheme, and device material facts." The indictment goes on to quote from conversations between Englander and a person identified as "Businessperson A" in which Englander allegedly urged the person to deny having ever talked to him.

Federal investigators say in the indictment that after they first contacted Englander for a voluntary interview on Sept. 1, 2017, he tried to backdate at least one check to repay Businessperson A for what the check labeled "Vegas expenses."

The indictment notes that Englander's Form 700 -- the statement of personal economic interest that all elected officials are required to file in California -- lists $1,202 in gifts and benefits but makes no mention of cash payments or other gifts detailed by investigators. Englander's Form 700 for 2017 does detail $90 in socks and $390 in Pantages Theatre tickets, among other small items.

ENCRYPTED MESSAGES

The FBI’s indictment alleges that Englander repeatedly used Confide, a messaging app that deletes messages immediately after being read.

In January 2018, Businessperson A wrote Englander that his attorney had received a call from the FBI. The indictiment says Englander responded "I got a call too. Very stupid. They are waiting [sic] their time with this."

It was one of a number of discussions the two allegedly had on the encrypted messaging app, after Businessperson A had begun cooperating with federal officials.

At one point, Englander instructed Businessperson A to withold information from investigators, according to the indictment, writing: "No, no, we never had discussions. Nothing ever about Confide."

The use of the app, if related to public business, may run afoul of state laws around public records.

"The use of apps like Confide by public officials to automatically delete all communications raises the significant possibility that state law is being violated,” attorney Abenicio Cisneros told us. He added that it may give the appearance “that the public official is making a deliberate effort to undermine transparency and to subvert the disclosure requirements of the Public Records Act.”

'SO DRUNK, I DON'T REMEMBER CALLING'

In addition to using an encrypted messaging app, Englander also allegedly "repeatedly instructed Businessperson A how to respond to FBI questions about the use of escorts during the June 2017 Las Vegas trip."

According to the indictment, Englander instructed Businessperson A to "falsely tell" the FBI:

"If they check your phone records and called, just go, 'I called just to see how much money'...'Say, was so drunk I don't remember calling.' . . . . Or, don't remember, maybe I dialed the wrong number, I don't know, I don't remember.'"

In another scene described in the indictment, Englander allegedly drove Businessperson A around in his car, turned up the music really loud so they could talk without being detected by listening devices and drove in circles.

DISTRICT 12

The indictment has raised questions about the current councilman for District 12, John Lee, who was Englander's chief of staff. Lee was elected to replace Englander in a special election after Englander's unexpected departure.

Lorraine Lundquist challenged Lee in last week's primary election. Current vote totals have Lee with 51% of the vote to her 48%. Lee will avoid a runoff if he stays above 50% of the vote total.

After news of the indictment against her opponent's former boss became public, Lundquist said the indictment "raises many questions about John Lee’s involvement, starting with the basics: What did John Lee know, when did he know it, and was he involved in the cover-up?”

Lundquist also questioned the timing of the indictment becoming public shortly after voters cast ballots.

"The question isn’t about whether John Lee was in Las Vegas, enjoying the spoils of corruption with Englander on this particular trip — though the voters deserve to know that as well. The more important questions are whether John Lee was a witness or a person of interest in the investigation, and why he didn’t come clean with the voters about the real reasons why there was a vacant seat for him to pursue in the first place.”

In a statement released via Twitter and also by his City Council office, Lee said he was on the Las Vegas trip in question and "did everything in my power to pay for and reimburse expenses related to this trip."

Lee went on to say he had been cooperating with the FBI and would continue to do so.

READ THE FULL INDICTMENT

Aaron Mendelson contributed to this report.

This is a developing story and it has been updated as additional information has become available. This story was originally published at 10:53 a.m.