A Chinese company's Arcadia subsidiary has agreed to pay more than $1 million to resolve allegations that it bribed city officials, including former Los Angeles City Councilman Jose Huizar, with campaign contributions, foreign travel and Katy Perry concert tickets to ensure support for its downtown building projects, it was announced today.
The non-prosecution agreement with Jia Yuan USA Co. Inc. is the latest development in the ongoing investigation into a wide-ranging pay-to-play scheme at City Hall. China-based Shenzhen Hazens established the company to redevelop the Los Angeles Luxe City Center Hotel, which it purchased in 2014 for more than $100 million.
Jia Yuan "planned a massive redevelopment that would include retail space, residential units, and hotel rooms, valued at approximately $700 million," according to a statement of facts accompanying the NPA.
Under the agreement, Jia Yuan will, among other actions, pay the fine within two weeks, continue to cooperate with the FBI's ongoing public corruption probe, and fire George Chiang, a real estate consultant who pleaded guilty to participating in a Huizar-led racketeering enterprise, according to the U.S. Attorney's Office.
The document filed in Los Angeles federal court outlines Jia Yuan's conduct in relation to Huizar, who faces trial next year. On Aug. 3, Huizar pleaded not guilty to charges in a 34-count racketeering indictment that alleges he led a criminal enterprise designed to enrich himself and his associates, give favorable treatment to developers involved in the payment of bribes, and elect his relative to preserve the enterprise's power when his term expired at the end of this year.
In the statement of facts, Jia Yuan admits a series of acts, including:
-- a Jia Yuan employee provided Katy Perry concert tickets to Huizar soon after the councilman and an unnamed official previously identified as the city's then-deputy mayor for economic development intervened in a compliance issue at a Hazens-owned hotel;
-- Jia Yuan employees made campaign contributions to several U.S. political candidates, some of which were later reimbursed by the company at the direction of a foreign national, who was prohibited from participating in U.S. elections;
-- Jia Yuan provided in-kind contributions to several U.S. political candidates by hosting reduced-cost fundraising events at the Luxe Hotel, some of which took place at the direction of a foreign national who was prohibited from participating in U.S. elections;
-- the chairman of the Hazens companies facilitated an introduction that resulted in a contract that paid indirect bribe payments to Huizar, who, in his official capacity, introduced and voted on a motion to benefit the Luxe Hotel project; and
-- Chiang organized a Huizar family trip to China that Hazens partially subsidized.
After receiving all of these benefits, Huizar voted to approve the Luxe Hotel project before the city's Planning and Land Use Management Committee, which he chaired until shortly after federal agents executed search warrants at his Boyle Heights home and city offices in November 2018, prosecutors allege.
The statement also details how Chiang and the economic development official asked the Hazens chairman on several occasions to make a $100,000 contribution to a political action committee established to benefit a Huizar relative who was planning to run for his council seat. While the chairman did not authorize the donation, Chiang told Huizar that Hazens would make the $100,000 donation, which prompted Huizar to take additional officials acts to approve the Luxe Hotel project, it says.
The NPA does not preclude or limit the investigation or prosecution of individuals, including any current or former Jia Yuan officer, employee or agent, federal prosecutors said.