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The L.A. Grand Hotel Downtown. | Photo courtesy of DiscoverLosAngeles.com
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By FRED SHUSTER
A Los Angeles real estate developer paid a $500,000 bribe to a city councilman to “grease the wheels” for a proposed downtown condominium project, a federal prosecutor told a jury Tuesday, but a defense attorney said the developer thought he was paying “consulting fees” to an intermediary and never suspected the funds would be used to bribe an elected official.
Dae Yong Lee, also known as David Lee, is the first defendant to go on trial in the City Hall corruption scandal surrounding former Councilman José Huizar and his associates.
“This is a case about a $500,000 bribe,” Assistant U.S. Attorney Cassie Palmer told the jury in Los Angeles federal court.
Palmer laid out an alleged scheme in which Lee used Huizar associate Justin Kim to transfer bags of cash on behalf of his company, 940 Hill LLC, to the then-councilman and former aide George Esparza. Within days of payment, Huizar allegedly smoothed out a union problem that had stopped the proposed mixed-use development from moving forward.
“There was one man who had a lot of power in this landscape,” Palmer said in her opening statement, explaining that Huizar was head of a powerful city planning committee that reviewed the city’s biggest development projects.
As chairman of the panel, Palmer said, “Huizar’s vote mattered, and the defendant knew his vote mattered. They needed José Huizar on their side.”
Lee and 940 Hill — named for the address of the proposed downtown retail and residential project — face charges of bribery, honest services fraud and obstruction.
Defense attorney Ariel Neuman painted a different picture of his client, telling jurors Lee was conned by Kim, who told the developer the money was needed for a legitimate business fee.
“He made the mistake of trusting the wrong person,” Neuman said of Lee. “He was taken advantage of by a liar and a thief. David Lee did not knowingly or intentionally bribe anyone. He thought he was paying a consulting fee.”
The defense attorney insisted that the government’s entire case against his client is based on statements of Kim, who has a “sweetheart deal” with prosecutors in exchange for testifying against Lee.
Kim admitted to facilitating the payment from Lee and pleaded guilty to a federal bribery offense. Lee and 940 Hill are also accused of falsifying accounting and tax records to cover up the alleged bribe — the basis for the obstruction charge.
Both Kim and Esparza, who also pleaded guilty to a federal charge, are expected to testify for the prosecution during the trial.
U.S. District Judge John F. Walter broke up the complex six-defendant indictment into three separate criminal trials after finding that the size of the case against Huizar alone would likely overshadow evidence against his co-defendants.
Huizar and former Deputy Mayor Raymond Chan, who was general manager of the Department of Building and Safety before becoming the city’s deputy mayor of economic development, are scheduled to be tried on racketeering conspiracy, bribery, honest services fraud and other charges in February.
Huizar, the central figure in a six-year probe of suspected corruption in City Hall politics, is accused of receiving $1.5 million in cash and benefits as part of a pay-to-play scheme in which developers were shaken down for cash and campaign donations in exchange for help getting downtown real estate projects through the city’s approval process.
Huizar’s lawyers deny the allegations against their client, claiming the former councilman was merely “an evangelist for robust development” in downtown and Boyle Heights, which he represented from 2005 to 2020.
An October trial date is scheduled for Shen Zhen New World, a company owned by a fugitive Chinese billionaire developer who is also a defendant. The company, which acquired the L.A. Grand Hotel Downtown in 2011, planned to redevelop it into a 77-story tower, allegedly in a quid pro quo arrangement with Huizar. The developer, Wei Huang, is believed to be in China and has never appeared for a court date in the case.
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