LOS ANGELES (CN) — A night at a karaoke bar with escort girls and a Los Angeles City Council member helped convince a real-estate developer to pay a $500,000 bribe for assistance resolving a labor coalition's opposition that threatened to stall his project in downtown LA, according to the man who organized the party.
Justin Kim, a real estate appraiser and consultant who helped American-Korean businessmen expedite communications and meetings with city officials, testified Wednesday at the trial of Dae Yong Lee, aka David Lee, an entrepreneur and investor who owns dozens of businesses and properties and who's accused of bribing former City Council member José Huizar.
Kim has pleaded guilty to bribery and aiding and abetting Lee's alleged bribery, and he's the government's second cooperating witness to testify at what is expected to be a series of trials involving multiple defendants in the sprawling corruption scheme federal prosecutors uncovered at LA's City Hall with Huizar and his entourage at the center.
In August 2016, the Coalition for Responsible Equitable Economic Development or Creed LA, an organization that seeks that have union labor work on big construction projects, appealed the city's approval of a 20-story, mixed-use development that Lee wanted to build at the site of a one-story commercial structure. Lee then contacted Kim for help because of Kim's connection with Huizar as a major fundraiser.
Huizar, 53, served as downtown LA’s representative on the City Council from 2005 to 2020, a period that saw an unprecedented development boom in the area with foreign money pouring into ambitious residential and hotel projects. He also chaired the city’s influential Planning and Land Use Management Committee until November 2018, when the FBI raided his offices and home.
"I explained to Mr. Lee that Councilman Huizar was the final decisionmaker for development in the entire city," Kim told the jury.
Kim testified that he and Huizar had become close during a 2012 trip to Seoul with a group of local LA politicians. The group had ended up at a big nightclub where workers started to offer women to the visitors, and Kim had intervened and moved the group out of the club, which he said earned him Huizar's gratitude.
Afterward, Kim became a fundraiser for Huizar, soliciting money from Korean businessmen in the downtown LA's fashion district, where Lee has a fashion accessories wholesale business, and in exchange got Huizar's office to do him small favors for things such as parking meters and stop signs in the fashion district, he testified.
In response to Lee's request for help, Kim got in touch with George Esparza, Huizar's assistant and confidante who's also pleaded guilty and is a cooperating government witness. Kim and Esparza arranged for a meeting with Huizar at a Korean restaurant where the council member agreed to help squash Creed LA's challenge to Lee's development.
After dinner, the group went to a private room at a karaoke bar where Kim asked Lee to join them. They were also joined by escort girls but under questioning by Assistant U.S. Attorney Mack Jenkins, Kim confirmed that nothing illegal happened involving the women.
The point of asking Lee to join them was to show him Kim's access to an elected official in a close setting "with alcohol and working women," Kim testified.
"Mr. Lee was there to see my interaction with Councilman Huizar," Kim said.
The next day, Kim testified, he met me with Esparza who told him that Huizar expected money for his help in making the Creed LA appeal go away. Although Lee balked at Huizar's initial request of $1.2 million, conveyed through Esparza and Lee, he eventually countered with a $500,000 cash bribe.
Whereas Esparza earlier testified that Lee made two payments of $200,000 each through Kim and that Kim got half the money as part of an agreement with Huizar, Kim could only remember one payment and said he took $100,000 of that on his own accord.
"It was a lot of money and I got greedy," he told the jury.
When the FBI started to interview Kim and Esparza later in 2017, Kim said, Huizar and Esparza didn't want the final $100,000 installment from Lee. Kim said he told Lee, however, that he still needed to pay and kept the $100,000 for himself.
After Lee had paid the first $200,000, Huizar instructed Esparza to meet with a Creed LA lobbyist and convince them to drop their opposition to Lee's development in exchange for a promise that union labor would be hired for another, larger project Lee was planning downtown, according to Esparza's testimony.
Ariel Neuman, Lee’s attorney, said in his opening statement last week that Lee never intended the $500,000 as a bribe but that he thought it was a consulting fee for Kim to help resolve the Creed LA appeal. The only evidence that Lee thought to bribe Huizar comes from Kim, a convicted liar, Neuman told the jurors.
This week, Lee's chief assistant testified the developer didn't ask him to record the $500,000 cash payment as a loan to the LLC that nominally owns the proposed development for entitlement expenses until March 2019. That was about two years after the alleged bribe to Huizar and after the FBI subpoenaed the records of 940 Hill LLC.
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