LA WATCHDOG--As a result of an excellent investigative report by Los Angeles Times reporters David Zahniser and Emily Alpert Reyes (A $72 Million Apartment Project. Top Politicians. Unlikely Donors) in October 2016, District Attorney Jackie Lacey has filed felony charges against real estate developer Samuel Leong for laundering campaign contributions and attempted bribery in connection with the successful “up zoning” of his five acre industrial property to accommodate a $72 million development of a 352 unit apartment complex in the Harbor Gateway area of the City of Los Angeles.
This “up zoning” increased the value of his property by an estimated $25 million.
According to The Times, Leong illegally funneled more than $600,000 of campaign contributions through a network of “straw men.” This resulted in the City Council and Mayor Garcetti approving significant zoning changes, overriding the findings and recommendations of the Planning Department, the Area Planning Commission, and the Planning Commission.
Leong’s contributions were strategic. Beneficiaries included former City Councilwoman Janice Hahn ($203,500) who represented the Harbor area and therefore was the key to any zoning change in her fiefdom. But after Hahn was elected to Congress in 2010, Joe Buscaino became the lord of the Harbor fiefdom and led the charge for the City Council to assert jurisdiction over the Planning Commission’s 2014 unanimous decision to reject the hoped for zoning change. For his efforts, he received almost $95,000 in campaign contributions from numerous unknown donors, all believed to be funded directly or indirectly by Leong.
The developer then greased the skids and by before using ‘straw men” who made over $100,000 in campaign contribution in 2014 to three members of the Planning and Land Use Management Committee, Jose Huizar, Mitch Englander, and Gil Cedillo. This Committee approved the zoning changes with little discussion.
Leong also spread the wealth by contributing $60,000 to the Committee for a Safer Los Angeles, a political action committee affiliated with then mayoral candidate Eric Garcetti.
The investment of $600,000 in the political campaigns of our City’s Elected Elite paid huge dividends as the value of the property is estimated to have increased from $17 million as an industrial property to $42 million when zoned for an apartment complex. A cool $25 million profit for Leong and nothing for the City and the area impacted by this out of character development.
But our friends in City Hall who benefitted from these laundered contributions claim they were duped as they had no knowledge of this money laundering scam. But this is pure baloney as Leong and his agents no doubt made sure that the politicians knew that these donations were the result of his bundling efforts.
Furthermore, all elected officials keep very close tabs on their donors as cash campaign contributions are the ultimate aphrodisiac for upwardly mobile politicians.
Unfortunately, Sea Breeze is just one of many real estate scams that have been facilitated by campaign contributions to Mayor Garcetti and the members of the City Council. These deals range from the Palladium in congested Hollywood to the Reef and Cumulus developments in gentrifying South LA to the massive Rocketdyne project in Warner Center to the Martin Cadillac luxury high rise in traffic clogged West LA to the 27 story high rise at Catalina and 8th in low rise Koreatown.
But this indictment is an excellent opportunity for the District Attorney to flip Leong into disclosing all the dirty details of how he and his lobbyists, consultants, and lawyers pulled off this stunt in return for a lighter sentence and for not confiscating some or all of all the apartment complex and his ill begotten gains. And the more Leong tells, especially about those that occupy City Hall, the better the deal.
The shenanigans associated with Sea Breeze is just the tip of the iceberg.
As Warren Buffett said, “What you find is there’s never just one cockroach in the kitchen when your start looking around.”
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council. He is a Neighborhood Council Budget Advocate. He can be reached at: firstname.lastname@example.org.)