City Hall Insider Accused of Bribery

Leland Wong, a power broker in former Mayor James K. Hahn’s administration, surrendered Wednesday to face a bribery and conflict-of-interest indictment that makes him the only public official accused of crimes in a three-year probe of alleged “pay to play” contracting practices in Los Angeles.

Wong was accused by the Los Angeles County Grand Jury on Tuesday of accepting $100,000 in bribes from Ren-Gung Shyu, executive vice president of Taipei-based Evergreen Marine Corp., to get the giant Taiwanese shipping line more space at the Port of Los Angeles. Shyu, whose testimony remains under seal, was not accused of a crime.

Wong’s indictment marks a milestone for prosecutors. A longtime figure in the city’s elite governing class, he served as a powerful commissioner during three mayoral administrations. His case is the first in which prosecutors have filed charges involving alleged influence-peddling by a Hahn appointee.

But the charges are not the ones prosecutors set out to explore -- trading city contracts for campaign contributions. News reports about such alleged practices by other mayoral appointees dogged Hahn during his unsuccessful bid for reelection in 2005 but resulted in no indictments. Hahn has not been accused of a crime.

Los Angeles County Dist. Atty. Steve Cooley said in a statement that he regarded the grand jury’s indictment as “a significant step in rooting out corrupt public officials and exposing corruption within public institutions.”

But Janet Levine, an attorney for Wong, said her client was the victim of a politically motivated “witch hunt.”

After a three-year, joint federal-state probe, “They needed to point to someone,” she said. “We expect to show they pointed to the wrong person.”

No further indictments are imminent, according to people familiar with the corruption probe, who spoke on condition that they not be identified because the investigation is continuing and subject to grand jury secrecy rules. One person said no more indictments are likely unless Wong cooperates with the government.

According to the indictment, Wong began receiving bribes in 2002. At that time, the mayor’s office was trying to accommodate Evergreen’s request for more space at the port and was pushing an Evergreen affiliate, EVA Airways, to move its cargo operation from busy Los Angeles International Airport to underused Ontario International.

Wong, an airport commissioner, was involved in the transfer talks with EVA. Hahn said later that he was unaware that Wong was also a paid consultant to Evergreen when he accompanied the mayor on a trip to Taipei, where a tentative, and still unconsummated, deal to move EVA to Ontario was announced as a triumph.

The next year, top Hahn administration officials intervened on behalf of Evergreen with the Harbor Commission, which had been leaning toward granting the space to a rival shipping firm.

The indictment was vague in describing what Wong, who once served on the Harbor Commission, did for Evergreen at the port, and prosecutors declined to be more specific, citing grand jury secrecy laws.

But Evergreen did not wind up with the port property. The Harbor Commission ultimately decided to ask shipping lines to vie for the lease in a formal competition and selected the Evergreen rival that officials had wanted all along.

However, that firm, P&O; Nedlloyd, was acquired by another company and decided that it no longer needed the land, which remains vacant, port spokeswoman Theresa Adams Lopez said.

Wong appeared in court Wednesday and entered a not-guilty plea before Los Angeles County Superior Court Judge David Wesley, who ordered his release on his own recognizance pending an appearance Sept. 7.

Prosecutors had asked that Wong be required to post $390,000 bail.

Wesley said he did not regard the 49-year-old Wong as a flight risk. “I think the charges are extremely serious,” Wesley said. “But I don’t see how he is a danger to the community [or] a danger for flight.”

Wong, who grew up in L.A.’s Chinatown and maintains a home in San Marino, owed his rise in civic life to his willingness to raise money for politicians and his longtime day job as Kaiser Permanente’s director of government and community relations. The position gave him sway over $4 million a year in Kaiser grants to Southern California charities, labor unions and community groups.

It was “the best base” a local political operator could wish for, said a veteran commissioner, who did not want to be named so as not to alienate colleagues. “If Councilman A said, ‘I need a new play set in my park’, Kaiser bought a new play set. If Councilman B really believed in muscular dystrophy, Kaiser would contribute to muscular dystrophy.”

His position also gave him the chance to hand politicians treats such as tickets to Lakers games and other events at Staples Center, paid for by the HMO giant.

In addition to the public corruption charges, the grand jury charged Wong with 13 counts of embezzlement for allegedly reselling some of those tickets and keeping the proceeds for himself.

He was also accused of filing false income tax returns with California for 2002, 2003 and 2004 that failed to report the alleged bribes from Evergreen, which prosecutors said were paid from June 2002 to January 2004, in $5,000 cash increments.

In addition, Wong was charged with perjury for failing to report payments from Evergreen on an economic disclosure form that he filed with the city Ethics Commission.

In a 2002 filing, he disclosed that he was a consultant to the firm and had earned between $10,000 and $100,000. But in a March 2003 filing, he omitted the financial relationship. By then, the indictment said, $35,000 in bribes had been deposited in his overseas bank account.

Wong ran into trouble with Kaiser and ultimately with law enforcement authorities after he was named in an Oct. 23, 2003, Times article detailing the activities of a close friend, Los Angeles lobbyist and businessman Art M. Gastelum.

The article quoted a lobbyist and a business consultant as saying Wong had used his position as an airport commissioner in 2002 to pressure them to steer a lucrative concession to Gastelum’s daughter. Wong said at the time that he had made a suggestion but had not exerted any pressure.

The district attorney’s office and the U.S. attorney’s office began looking into Wong’s activities, ultimately pooling resources.

If convicted, Wong faces an estimated maximum sentence of 10 years in prison, a district attorney spokesman said.

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Back story

Leland Wong’s indictment is the most serious criminal case to arise from a long-running investigation into allegations that Los Angeles city contracts were being traded for political contributions. The corruption scandal, which surfaced in 2003, came to be known as “pay to play” and was cited as a factor in former Mayor James K. Hahn’s 2005 reelection defeat. In October 2003, The Times reported that Wong, then a city airport commissioner, allegedly used his position as an airport commissioner to try to steer a lucrative concession to the daughter of lobbyist Art M. Gastelum. That December, City Controller Laura Chick asked authorities to investigate “potential illegal acts” in airport affairs. A month later, Wong resigned as a city commissioner. The city’s business dealings during the Hahn era came into the spotlight again later in 2004, when former Fleishman-Hillard Inc. employees told The Times that the public relations giant routinely inflated billings on a contract to improve the Department of Water and Power’s image. Fleishman executives Douglas R. Dowie, a Hahn confidant and fundraiser, and John Stodder were convicted in May of multiple counts of conspiracy and fraud.

Los Angeles Times