LOS ANGELES — Embattled Los Angeles City Councilman Jose Huizar pleaded not guilty Monday to charges in a 34-count federal grand jury indictment against him in a sweeping corruption probe.

Huizar appeared via video teleconference, wearing a mask, in his first court appearance since receiving permission to be represented by two deputy federal public defenders.

Huizar was arrested and charged with racketeering in June, and now faces additional charges including bribery, money laundering, wire fraud and tax evasion in the wide-ranging probe that alleges a pay-to-play conspiracy involving Huizar, his associates and real estate developers seeking to build massive projects in Los Angeles.

For months Spectrum News 1 has been speaking with dozens of people about the federal investigation. Many of them asked not to be identified or go on camera. Others were eager to share their views, their experience with City Hall, and their hopes for more transparency and fair governance going forward.

Real estate developers, political campaigns, and "PLUM"

Working in the trenches of L.A. real estate development for more than 40 years, Dan Rosenfeld carries a unique point of view on the federal corruption probe centered on L.A. City Hall.

Through his work, he happens to know Huizar rather well.

“I’ve known him for about 20 years. His wife is a wonderful person. And his kids, it’s a tragedy that this would happen. I just wish it wasn’t true,” Rosenfeld said.

Rosenfeld said he was stunned to learn about the gravity of the federal charges, pegging Huizar at the helm of an elaborate criminal enterprise.

U.S. attorney prosecutors claim Huizar led an extensive racketeering conspiracy, aimed at shaking down developers for bribes to enrich the members of the enterprise with cash and political power, in return for greenlighting real estate projects.  

The level of corruption outlined in the court documents reminds Rosenfeld of L.A.’s dark days of backdoor wheeling and dealing in the 1920s and 1930s, most notably under the infamous former mayor Frank Shaw, whose administration was known as one of the most crooked in L.A. history.

“It’s almost unbelievable, in our time, in our beautiful city, how we slipped back into this kind of behavior. I think the consequences if the charges are true should be severe enough that people think long and hard before they do anything like this,” Rosenfeld said.

Rosenfeld has had many projects go before the city planning process and worries that part of how we got to this probe has to do with politics influencing what gets built in L.A.

The 15 council members have an incredible amount of discretion over what developments get approved or blocked in their districts. They can actually overwrite decisions of planning commissions. And no one wields more power than the chair of the city’s Planning and Land Use Management Committee — known as PLUM for short — the position held by Huizar between 2013 and 2018.

“The funnel all comes down to the PLUM committee," Rosenfeld said. "You can argue, on the one hand, well that’s good because they’re elected to represent the people and if they’re expressing the voice of the people in guiding the size and use of projects, that’s a good thing. But it can also create a perception of conflict."

Rosenfeld said that amount of leverage, coupled with the steep cost of running political campaigns in L.A.’s massive districts, creates an environment ripe for corruption. He won’t name names, but admits some former city officials have in the past called him directly requesting campaign contributions.

“I’ve never heard a council member say, ‘If you make a donation, I will support your project.' It’s never that blatant. But the perception that you will have more access and perhaps a favorable determination is inevitable,” Rosenfeld said. “And with perception comes temptation because it’s just so easy.”

That temptation level may also increase depending on the area that a council member represents. Some districts are more active when it comes to real estate projects and economic opportunities.  

Redistricting and downtown LA

When districts were redrawn in 2012, Councilman Huizar won control of nearly all of downtown Los Angeles, which over the last decade has been a hot zone of development. Massive skyscrapers have changed the city skyline and tall apartment buildings boasting large commercial spaces and massive parking lots have been erected throughout what is now District 14.

Former Councilwoman Jan Perry was in office when the redistricting process took place and tried to fight it. She said the decisions on how and where to alter the districts were driven by politics as opposed to the Census, and laid the groundwork for corruption.    

“I was very angry because I knew the implications of this transactional, political decision to do that," Perry said. "It wasn’t grounded in logic. Some folks went and either asked or were given portions of the city or the district, so that it made it easier for them to run for office, or they wanted a portion of area in their district because then they could leverage the property owners or developers in those areas for political contributions.”

Before redistricting, south L.A. and downtown L.A. were intertwined in the same district, the ninth, which Perry represented. In 2012, redistricting severed most of downtown L.A. and shifted it to District 14 and Huizar.

Perry said she suspected her former colleague had a hidden agenda, and that over the years she has received many calls from developers complaining that they were being intimidated or encouraged to give political contributions in order to move their projects forward.

“Why do you have to do that? Don’t you make enough money? You get paid every two weeks. You know, you can do a good job and get paid, and you can do a lousy job and still get paid, so why do you need to do that?” Perry said.

Recalling the redistricting process riles Perry up because she believes cutting the link between downtown L.A. and south L.A. led to a tremendous loss in economic opportunity. When development and new revenue surged in downtown L.A., it afforded reinvestment in south L.A.

“South L.A. is an area that struggles without a growing middle class. Redistricting deprived this area of its economic engine,” Perry said.

The former councilwoman had us conduct the interview with her at the Dunbar Hotel, an affordable housing project for people 55 and older in south L.A., which was restored while she sat on city council. Perry said the Dunbar is the best example of the kind of projects that disappeared when the district boundaries shifted.  

“What it all boils down to is, I’d like to say to the people of Los Angeles, don’t accept this. This is wrong. You’re the ones who are suffering and your tax payer dollars aren’t being spent the way you intended. Don’t tolerate this corruption,” Perry said.

A sprawling case, 100+ page federal complaint

Among the most egregious claims laid out by U.S. attorney prosecutors in a 116-page complaint filed in July:

• Huizar and his associates allegedly accepted more than $1 million in bribes to help clear the way for a 77-story skyscraper downtown proposed by a Chinese billionaire developer.
• Huizar allegedly accepted $600,000 as collateral from that Chinese billionaire to settle a sexual harassment lawsuit filed by a former employee.
• Huizar and associates allegedly facilitated a $500,000 bribe to help solve a labor dispute over a condo project proposed for 940 South Hill Street.
• Huizar and associates allegedly facilitated bribes and political contributions totaling more than $160,000 for a PAC created to help Huizar’s wife, Richelle, get elected to his seat, in return for helping a two-tower skyscraper and hotel project on the site of the Luxe City Center Hotel.

“The case lays out a sordid tale of how Mr. Huizar and his cronies sold themselves to the highest bidder, and in so doing sold out the residents of this city,” said U.S. attorney Nick Hanna during the press conference announcing Huizar’s arrest on June 23.

Luxury vs. affordable housing in DTLA

When the Luxe Hotel redevelopment project was going through the city planning process in 2017, Darryl Holter was watching closely.

Holter is CEO of the Shammas Group, and his family owns the Petroleum Building next door to the Luxe. He voiced concerns about the renderings proposed by Chinese development company Shenzhen Hazens, mainly over the size and scale of the proposed multi-tower property.

But he also worried that the luxury condos Huizar seemed so eager to approve would price people out while possibly sitting empty.  

“I think my main objection was based on luxury housing for people that aren’t really living here. And that to me seems really wasteful. We have a housing crisis. We have a homeless crisis. These things are related. I would like to see housing for people that work for a living. People that are trying to raise a family and trying to do what the American dream is all about,” Holter said.  

Holter said he met with members of Shenzhen Hazens over several months discussing the proposed Luxe redevelopment projects, but never with the executives referred to in Huizar’s case.

He said the meetings resulted in the company modifying some of its plans, which ultimately led him to support the project before the PLUM committee. But he said those meetings also shined a light on how long it takes to get something built, redeveloped, or approved in the city of L.A.

“It’s very hard to get things done in the city,” Holter said. “You have a lot of agencies, you have a lot of people with opinions. They want you to change this. No, change that.”

He worries the process can become so slow, with so many bureaucratic hurdles, that it provides another incentive for developers to do backdoor deals.

“Those difficulties push people into doing things they shouldn’t do. It’s not an excuse. But on the other hand whenever we want to get anything done in the city of L.A., we sign that we will expedite it to get it done more quickly. We’ll hire a consultant. These are things you have to do. Otherwise you’re at the back of the bus,” Holter said.

At the end of the day, Holter feels it should be the elected officials who remain steadfast in prioritizing integrity and long-term community benefits, rather than short-term rewards or favors.  

But he also raises an interesting point. The court filings spell out an array of bribes and gifts wealthy developers allegedly gave Huizar and his associates. Everything from private plane trips, expensive hotel rooms, gambling ships and escort services. But no developers have been charged with any crimes at this time.

The big fish

The big fish in this case is not the wealthy real estate developers, but rather the public official: Councilman Huizar, according to white collar criminal defense attorney Stanley Friedman.

“You can prosecute one developer and there’d be nine others who want to engage in the same conduct. But if you prosecute the public official, that’s going to send a message,” Friedman said.

Friedman represents one of the four men who agreed to take plea deals and cooperate with the federal investigation. Those men are:

• Former Councilman Mitch Englander
• Political fundraiser Justin Kim
• Real estate consultant George Chiang
• Huizar's former special aide George Esparza

Friedman represents Chiang and shared with Spectrum News 1 that his client is deeply regretful of his actions. Chiang, 41, of Granada Hills, admits to helping facilitate bribes and political contributions for Huizar.

“I think of politics as gasoline and fire. And sometimes there will be an explosion,” Friedman said. “Politics is significantly about raising money. And when you mix money and someone who should act in the public interest they get confused.”

Friedman is the only attorney in this sprawling case who was willing to sit down with us. Huizar and others named in the probe have denied our requests for interviews.

Huizar’s former private attorney, Vicki Podberesky, released a statement following his June arrest:

“Councilman Huizar intends to respond to the government’s allegations in court.  He firmly believes that these matters should be handled in a court of law and not in the media. Councilman Huizar requests that the press respect the privacy of his family and children.”

On the day of his arraignment, Podberesky was relieved as Huizar’s counsel, replaced by two federal public defenders who did not respond to our requests for a comment.

Calls for change in city hall

The federal charges Huizar now faces have sparked public outrage. Some residents even launched a protest at his home the day of his arrest.

Others expressed their anger on Huizar’s Instagram page after he made a cryptic post just hours before federal agents descended on his home for his arrest. He posted a picture of baby Jesus known as Santo Nino de Atocha, the patron saint of the wrongly accused. Huizar has since taken down hundreds of comments on the post.

The allegations also stir up a great amount of disappointment for those who knew him and those in L.A.’s 14th district. Huizar has served on City Council since 2005.

“In many ways he was the American Dream come true,” said Dan Rosenfeld. “He came here as an immigrant with little or nothing. He worked his way through some of the best universities in the country. He was elected to public service. I’m as stunned as anybody at the lack of judgment of someone who we all knew and respected.”

But Rosenfeld said that now is the time to look forward. He firmy believes that from this chaos comes a great opportunity for real change, an impetus to ensure a more level playing field.

“If there’s a theme I think that binds this all together and provides a ray of hope that some good will come from the episode we’re in, it is the decoupling of political campaign fundraising from land use decisions,” Rosenfeld said.

One proposal being considered now by Mayor Eric Garcetti is to create a system in which city officials cannot vote on a development or contract if the companies, the companies employees or employee’s family members have donated to a campaign. L.A. Metro has a ban like this in place and often leads to board members having to recuse themselves of votes.

“If you give more than $10 in money, or you name it—a burrito—to a Metro board member, they cannot vote on an issue you’re involved in. That’s a clear separation,” Rosenfeld said. “And as a developer, just tell us where we can build. We’ll build what you want, where you want. But don’t ask us to contribute to political campaigns to get our foot in the door.”