Thursday, October 31, 2013

Exclusive: Hollywood sting

FBI investigation of a California political dynasty uncovers alleged bribery and corruption in the shadows of Tinseltown


LOS ANGELES — Ronald Calderon is a powerful state senator in California who holds sway over the glamorous Hollywood movie industry. He is also, according to the Federal Bureau of Investigation, a politician on the take.

A hefty 56-year-old Democrat with salt-and-pepper hair, Calderon has been a red-carpet star in California politics for more than a decade. As an assemblyman and now a state senator representing suburban Los Angeles, he has established a well-earned reputation for spending campaign money and taxpayer funds on himself.

He’s used campaign cash to cover the finer things in life — plush golf outings, lavish trips to Cuba and Las Vegas, meals at exclusive restaurants and hotels. When California offered to purchase cars for the state’s elected officials, Calderon chose the most expensive one: a $54,830 Cadillac STS V8 luxury sedan.

But his days as a big spender may soon be over. The FBI is hot on his trail in an investigation that could become California’s biggest legislative scandal in more than two decades and could signal the downfall of a political dynasty. The FBI employed an undercover sting for more than a year that ended when agents raided the senator’s office in Sacramento in June.

Al Jazeera’s Investigative Unit subsequently learned of the secret operation. This account is based on a 124-page affidavit, still under seal, filed by the FBI in U.S. District Court in Sacramento in support of a search warrant used in the raid.

The names of several other senators, including the Senate president and the chair of the California Latino Legislative Caucus, have surfaced in the case, although none has been implicated.

The document lays out a sordid tale of alleged bribery and corruption. Undercover FBI agents posed as independent movie executives interested in taking advantage of a program in which films with budgets of $1 million or more are eligible for special tax credits. The agents, focusing on Calderon, asked the senator to help lower the budget threshold to $500,000. Calderon, who chairs the Senate Select Committee on California's Film and Television Industries, agreed to help lower it to $750,000 but wanted financial assistance provided to his grown children, the affidavit says.

On June 21, 2012, for instance, in a restaurant in Pico Rivera, Calif., outside Los Angeles, Calderon said he could lower the budget threshold if the movie executive would hire his daughter, Jessica.

“There might be a play, you know, to lower the tax credit.” He went on: “Any help you could do for my kids is — you know, that’s diamonds for me.”

The agent agreed to hire Calderon’s daughter for $3,000 a month if the senator could help reduce the movie budget threshold “sooner rather than later.”

They had a deal. Calderon’s wife, Ana, would draw up an employment agreement for Jessica and the movie executive. That written agreement, Calderon said, was “to keep it legit.” The FBI summarized his thinking in the court document: “You never take money directly from people and you have to be careful about a tit-for-tat relationship.”

In reality, the record says, the arrangement was tit-for-tat: There was no work for Jessica, and payments to her were linked to Calderon’s efforts to sponsor favorable legislation. Over the course of the sting operation, the affidavit says, the FBI provided $60,000 to Calderon, much of it through his two children.

For the senator, such arrangements weren’t unusual. Separately, the FBI court filing says, Calderon also used his son, Zachary, to accept kickbacks from a hospital executive, Michael D. Drobot, whose companies have received more than $161 million in state insurance payments. The state has sued Drobot, alleging he was behind “multiple fraudulent schemes.”

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