Zwartz Talk

Los Angeles, Thy Name is Corruptionism

criminal extortion

By Scott Zwartz

Monday, April 4, 2016

Corruptionism refers to the situation where businessmen have purchased the government and have perverted the goal of government away from providing for the common welfare to aggrandizing the personal wealth of the businessmen. Los Angeles has a particularly virulent form of Corruptionism called Garcettism.

The City of Los Angeles is a perfect example how a city council is owned lock, stock, and barrel by a few businessmen. Corruptionism always involves a degree of criminality, but the illegal operating procedure of the Los Angeles City Council constitutes a magnificent criminal enterprise.

The FBI defines a criminal enterprise as “as a group of individuals with an identified hierarchy, or comparable structure, engaged in significant criminal activity. These organizations often engage in multiple criminal activities and have extensive supporting networks.” Federal law, however, exempts city councils from its racketeering statute, RICO (Racketeer Influenced and Corrupt Organizations). The fact that the politicians had one federal statute exempt city councils from criminal prosecution does not immunize city councils from all federal and state criminal statutes.

Let’s look at the Los Angeles City Council to see how it measures up against the FBI’s definition of a criminal enterprise.

     (1) A Group of Individuals

Fifteen (15) people who meet three times each week to conduct business certainly constitute a recognizable and defineable group.

     (2) Hierarchy and/or Structure

The council is divided into 15 subareas each with its own staff, not completely dissimilar to La Cosa Nostra.

      (3) Engaged in Significant Criminal Activity

The main criminal behavior of the Los Angeles City Council is best understood as a form of Accounting Control Fraud [see William K. Black] which Zwartz Talk also calls Enron Accounting. It is the systematic looting of the corporate or public treasury for the benefit of private citizens. In the case of Enron, it was Ken Lay and other officers of Enron. In Los Angeles, the beneficiaries are certain real estate developers and the councilmembers.

Los Angeles City Council’s Criminal Enterprise is held together by its criminal vote trading agreement. California Penal Code § 86 criminalizes any form of vote trading among city councilmembers. Los Angeles City Council has a vote trading agreement which has been termed Mutual Bribery.

     How Mutual Bribery works:

Each member of the Los Angeles City Council agrees to “defer” to the councilmember in whose district a construction project has been proposed. The “deferment” means that no councilmember may vote “No” on any development project in another Councilmember’s district. The glue that holds together the criminal enterprise is the reciprocal nature of the vote trading. In return for not voting No on a construction project in another Council District, each Councilmember knows that no Councilmember will vote “No” on any project is his district.

This division of spheres of influence is the same way that gangs divvy up a city into turfs. In a way, the structure of the City Council criminal enterprise is brilliant. The city is already divided into fifteen council districts which become the spheres of influence. Because the law draws definite boundaries, no disputes arise over the territorial boundaries, except when the US census requires a redistricting.

Los Angeles City Council has a unique voting rule, which we have not found in any other city. Council Rule 48a may or may not be criminal in and of itself, but it nonetheless plays a crucial role in the criminal enterprise. Under Council rule 48a, all “Non Votes” are automatically counted as “Yes Votes.”

      Why Is Council Rule 48a Crucial

Without Council Rule 48a, councilmembers could adhere to the voting trading agreement not to Vote No, by simply not voting. That presents a problem to the functioning of the criminal enterprise. If a majority of councilmembers simply did not vote, then projects would not pass. One solution would be to change the vote trading agreement to require only Yes Votes. The other solution is Council Rule 48a – all Non Votes are Yes Votes.

As a result the criminal enterprise is effectuated by councilmembers doing nothing; they simply do not vote. Council Rule 48a is why the L.A. City Council approves over 99.9% of all agenda items unanimously.

Let’s take note. It is not that the LA City Council approves all items 99% of the time. It approves then unanimously over 99% of the time.

That is also the key to knowing that there is a criminal vote trading agreement. It is statistically impossible for over 99% of the items to be approved unanimously. There have been well over 10,000 votes in city council since Garcetti became Council President in 2006 and the idea that the unanimous voting over 99% of the time is by chance are too small for calculation.

     Council Rule 48a does to Undo the Criminal Vote Trading Pact

Naturally, law enforcement has neither the desire nor the intention to acknowledge the perpetual criminal nature of the Los Angeles City Councils vote trading agreement. The State Attorney General refuses to discuss it. One should note that she is running for the US Senate, and thus, she needs campaign contributions. The US Attorney is a political appointee of Barack Obama who developed the Too Important to Prosecute Doctrine. Thus, politics again protects the Los Angeles City Council.

The common excuse one will hear from law enforcement is that Council Rule 48a is not unlawful, and therefore, the entire voting arrangement is okay. That is similar to saying since the wheel man in a bank robbery had a driver’s license, the bank robbery was okay. This is a unique rule of law which applies only to massive white collar crimes – if one of the predicate acts in the criminal enterprise is not illegal, then the whole enterprise is legal.

This bizarre reasoning is applied behind the scenes to prevent any law enforcement investigation. Such an absurd notion would be laughable if made in open court as a defense, but it works very well in the back chambers where insiders decide which crimes a grand jury will investigate. It does not take the world’s most politically sophisticated person to realize that all the law enforcement agencies are politicalized and no underlying will risk his job in a futile gesture of going after the crooks who make the campaign contributions to his/her boss.

     What Is the Harm of the Vote Trading Agreement

The Vote Trading agreement allows real estate developers to be nice to only one councilmember in order to be able to construct whatever project that desire. It does not matter how many laws it breaks or whether the developer will receive millions of dollars in subsidies and tax breaks from the city. It does not matter if the extra millions of dollars which the city council approves for the project is earmarked for providing disability facilities. As the lawsuit, Independent Living Center of Southern California et alia v City of Los Angeles, Community Redevelopment Agency [CRA], United States District Court for the Central District Court of California, Case Number SACV12 0062JST.), shows the LA City Council has been running a systematic scam to take hundreds of millions of dollars from the federal government in order to make projects disabled accessible, but allowing the developers to do nothing to make their projects accessible to the handicapped. The hundreds of millions of tax dollars which flow to the developers is all gravy and each theft of the funds for the disabled comes with the unanimous approval of the city council.

Los Angeles allegedly has a housing crisis in Affordable Housing, but it too is a scam receiving the city council’s unanimous approval. The city allows developers to tear down thousands of rent controlled unit and then “replace” the with a few “affordable units.” The projects with the Affordable Units are subsidized through one of Mayor Garcetti’s favorite agencies, HCIDLA (Housing Community Investment Department), which operates through the city Council’s Housing Committee.

This is a scam ingenious as it is corrupt. The city allows developers to demolish rent controlled housing and then declares a crisis in Affordable Housing in order to allow the developers who are tearing down the affordable units to get hundreds of millions of tax dollars to build new high rise luxury apartments, which allegedly have a few “affordable units.” Of course, the units won’t be handicapped accessible despite the additional millions of dollars that the city funneled to the developers to make the project disabled accessible. April 2, 2016, LA Times, More Rent-controlled Buildings Are Being Demolished to Make Way for Pricier Housing, by Ben Poston and Andrew Khouri

      Now You Know why LA’s Infrastructure is Decaying

The criminal voting enterprise is responsible for Los Angeles’ crumbing infrastructure. The L.A. City Council rule to Never Say No makes it impossible for councilmembers to stop the diversion of hundreds of millions of tax dollars to developers. It is estimated that between 2001 when Garcetti was first elected Councilmember for CD 13 and the present, over $2 Billion dollars in tax dollars have gone to the real estate developers. These tax dollars should have gone to pay for maintenance on the city infrastructure. The favorite agency for transferring tax dollars to Friends of Eric was the corrupt Community Redevelopment Agency [CRA/LA], which the State of California abolished effective February 1, 2012 due to massive corruption.

The 2009-2010 CRA/LA budget, for example, was $680,050,442.00. In one year alone, that was 2/3 of Billion dollars which did not go to repair streets and sidewalks, did not go to repair water mains, did not go to improve fire or paramedics, did not go to fund pension funds. $600 Million, $600 Million there and after a while, it adds up to real money.

Each and every councilmember had a stake in preventing the city from squandering billions dollars on the corrupt CRA and in maintaining Los Angeles’ infrastructure, but instead they adhered to the criminal voting pact to never vote No.

Garcetti and the other councilmembers used a variety of scams to suck money out of the city treasury. One of the most infamous was the Cesspool on Vine. The CRA project at 1601 N. Vine was in Garcetti’s CD #13. Both the CRA and the developer obtained appraisals on the property at 1601 N. Vine. The CRA appraisal was for $4 Million, but the developer appraisal was for $5.4 Million. In bringing the sale to the city council Garcetti only presented the higher $5.4 Million appraisal, thereby causing the City to pay an extra $1.4 Millions for the land. Then a few years later, Garcetti had the CRA sell the same land back to the developer for only $835,000.00. That’s a nice trick – sell land to CRA for $5.4 Million and then re-purchase the same land for only $835,000.00. With a City Council which is a criminal enterprise, it is guaranteed that such corrupt exchanges are always approved.

       We Are Paying for the Corrupt Through Higher Fees and Taxes

In addition to suffering with some of the worst infrastructure in America and Europe, Angelenos are now facing higher fees and taxes. The Department of Water and Power [DWP] recently increased its rates each year for five years. The city did not tell the voters that it skims 18% off the DWP revenues. If the City had simply stopped skimming 18%, the DWP would have had enough money to make the repairs and up-grading of the water system. By approving the rate hike, however, the City kept its 18% and took 18% off the top of the rate hikes.

The DWP rate hikes are not the last of the tax and rate increases which the City plans to impose on Angelenos. This November 2016, they have measures to increase sales tax by a one-half percent which will give $120 Billion to transit developers to construct special transit projects to serve the mega-development projects which the city is approving including a subway tunnel beneath the Sepulveda Pass. Fixed-rail transit like subways serve one purpose, that is, to tie the mass transit to specific piece of property in order to make those land owners vastly more wealthy. That is the reason the city favors reducing bus service and promoting light rail. Buses can go anywhere the roads go and that means a bus can serve lower density areas as well as high density areas.

      Garcettism as a Special Brand of Corruptionism

Eric Garcetti has his form of corruptionism down to a well oiled machine. While Garcetti got his start as Councilmember for Council District #13 in 2001, he became City Council President in the same year that Penal Code § 86 criminalized vote trading in city councils. The law did not deter Garcetti who was actually proud of the extremely high rate of unanimous voting. Hundreds of millions of dollars flowed to developers, primarily through the corrupt CRA.

Garcetti’s council district suffered the most from Garcettism so that by 2010, so many people had left Council District #13, that it did not have enough people to be a legal council district. In 2006, Director of Planning Gail Goldberg had warned Garcetti that allowing developers to set the zoning rules was leading to disaster. 2008-2-7 LA Weekly, City Hall’s “Density Hawks” Are Changing L.A.’s DNA, By Steven Leigh Morris

Disaster, like beauty, is in the eye of the beholder. For people who want an honest government which has the quality of life as its prime concern, Garcettism is a disaster. For developers who want to loot the city treasury and construct harmful projects, Garcettism is a godsend.


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