FBI Agent Jim Wedick was in his Sacramento office trying to close the books on the biggest political corruption case of his career--a sting that netted four crooked state senators and 10 other public officials--when the call came in from Fresno County.
A city councilman allegedly was shaking down a developer on a rezoning vote. The angry developer had captured the $10,000 deal on a hidden tape recorder.
A fix in California’s heartland is not the kind of case to get Wedick’s juices immediately flowing, not after the huge “shrimp scam” sting that nabbed one fugitive senator in Costa Rica. At most, he figured, the Fresno matter would be a blip on his career screen.
Twenty months later, Wedick has lost count of how many times he has made the dreary, three-hour trek down California 99 to Fresno. His quickie case--now dubbed Operation Rezone--has become one of the biggest municipal corruption investigations in the country.
Federal authorities say as many as 25 elected officials, lobbyists and developers in Fresno and neighboring Clovis will be indicted before it is over. Already, the Clovis city councilman and six Fresno businessmen have been charged with one or more crimes of graft.
Investigators say they have uncovered a decades-long practice of developers subverting local zoning and environmental laws by buying off politicians in this fast-growing farming region. In some cases the alleged cash payoffs were delivered the old-fashioned way in bags.
“The problem is way too deep and way too broad to have developed overnight,” said Charles Stevens, the U.S. attorney in Sacramento and the Department of Justice official overseeing the case. “It’s the kind of corruption that has developed over decades, if not generations.”
Stevens, an appointee of President Clinton, said the government was prepared to “shut down the development industry in Fresno” to root out the corruption.
“What flabbergasts me is not only the scope of the problem and the number of people involved, but the brazenness of it. It’s a type of old-fashioned corruption that you would think just doesn’t exist anymore, at least not in California.”
Two targets of the investigation have pleaded guilty and agreed to cooperate with authorities, including Jeffrey T. Roberts, a Fresno land use consultant long suspected of being a bagman for politicians and developers. It was Roberts’ personalized license plate, REZONE, that gave the investigation its name. The others charged so far have pleaded not guilty.
Fresno’s political firmament has been shaken by the FBI allegations. Some politicians deny that the problem is as widespread as the federal agents allege, but others are not waiting to take action.
For the first time, Fresno has passed an ordinance requiring lobbyists to register. Mayor Jim Patterson, whose 1992 election was bankrolled by developers, announced recently that he would not accept money from the building industry for his reelection campaign.
Jeffrey Harris, head of the local building industry association, said he was surprised by the allegations. “I guess maybe I was naive,” Harris said. “I just didn’t think that kind of thing was going on.”
But he cautioned that “an indictment is certainly not a conviction. From my perspective, to think it is as pervasive as the FBI is indicating, I find that hard to believe.”
Transforming Farm Belt
To be sure, suspect land development practices are not limited to the San Joaquin Valley, which is being transformed from the nation’s richest farm belt into a chain of sprawling cities. Authorities say the practices found here are probably even more time-honored in Southern California.
But manipulation of local land use decisions appears to be stubbornly entrenched across this valley. And some builders, who are used to operating without effective local watchdogs or outside competition, have perfected ways to bend the system.
“We’ve got an element down there that I never dreamed of,” said Wedick, the lead agent who declined to discuss the case in detail. “There are things going on I still can’t believe.”
Rumors of bribery and extortion have been part of the political landscape here for so long that Operation Rezone has been met by collective apathy. Although some of Fresno’s social and fiscal problems can be traced to some developers having their way with the land, the Fresno Bee newspaper has received few letters on the issue and some of those have scolded the Feds for meddling in the town’s affairs.
“This investigation could be a real turning point in Fresno’s history, but I get the sense that people could care less,” said Jim Klein, an electrician who was removed from the city Planning Commission by the mayor in 1992 after voting against developers. “There has been no public outcry. No nothing. It’s scary.”
How did this place, known for author William Saroyan, plump raisins and prize-winning poets, get to a point that astonishes even veteran FBI agents.
Whether a function of detached geography--180 miles south of San Francisco, 210 miles north of Los Angeles--or its complacent citizenry, Fresno has had a long, colorful history of corruption.
In the 1920s, Prohibition Agent Tom Nicely, a former Fresno police officer, discovered that this town was one of the wettest in the state. Hiding in the trunk of a bootlegger’s roadster, Nicely gathered evidence of a huge liquor syndicate that involved farmers, the mayor and a quarter of the police force.
Half the profit, $5,000 a month, was handed over to the cops. "[This is] a gigantic web of corruption and graft and God only knows where it ends,” Nicely told reporters. The evidence presented was overwhelming, but only one of the 13 defendants was convicted. The mayor and police chief were untouched. Nicely left town a broken man.
Latter-day Fresno has limped from scandal to scandal with hardly a housecleaning. In the 1950s, Washington columnist Drew Pearson portrayed the city as a hotbed of gambling, prostitution and payoffs to friendly police and politicians. In the 1970s, prominent farmers and businessmen--again with the suspected complicity of police and sheriff’s officials--financed loads of marijuana and cocaine flown in from Mexico.
The 1980s brought a new but generally legal temptation. A farmer barely meeting his mortgage could quadruple the value of his land by selling to the right developer with the political juice to finagle a rezoning. The farmer’s jackpot was nothing compared to the developer’s take.
Fresno soon became one of the fastest-growing cities in America. In a 15-year boom, the population has nearly doubled to 400,000, making it the sixth-largest city in the state. Housing tracts now sprawl across 100 square miles of fertile farmland, to the San Joaquin River bottom itself.
Some of Fresno’s largest builders are not content to fund local campaigns and hope that their candidates win as a way to gain political access, according to federal authorities involved in Operation Rezone. A group of longtime builders routinely meets to handpick candidates and plan their campaigns, sometimes deciding what the candidates will say and how they will say it, the investigators said.
These home builders and their army of plumbing and flooring subcontractors give generously to the effort--tens of thousands of dollars in legal contributions. And if it isn’t enough to cover the costs of political signs or TV spots or voter polls, they frequently find an illegal way to launder the cash, authorities said.
In recent years, some elected officials have become even more grabby. Playing local builders off big national construction firms drawn by Fresno’s rapid growth, politicians have accepted outright bribes and become business partners with Fresno-area builders, federal authorities allege.
“Once the big boys hit town, some of the politicians raised the cost of doing business,” said one Fresno developer who is cooperating with the investigation. “A small rezoning matter that used to cost a few hundred dollars in tickets to a fund-raiser now might cost $10,000 under the table.”
“We call it the ‘envelope run,’ ” said another prominent developer who is not a target of the probe and who, like others interviewed, did not want to be identified. “It’s been going on for years. Now, the envelope is just fatter.”
For years, the building industry has silenced critics and befriended honest politicians by pointing out that it was helping people fulfill the dream of buying affordable houses. But even before Operation Rezone, neighborhood groups had complained repeatedly that city officials in Fresno and Clovis were going too far to meet the growing demands of builders.
There were the little things such as scheduling controversial rezoning votes the day before Thanksgiving or Christmas to discourage neighborhood groups from mounting effective opposition. Or the city Planning Commission being headed by a real estate broker whose partner was among the first to be indicted in the investigation.
And there were bigger questionable decisions that changed the very look of the city, said Joani Johnson, a leader in Fresno’s largest homeowners group.
The 1984 Fresno General Plan, the city’s blueprint for growth, was strongly shaped by one powerful developer who was involved socially with a City Hall bureaucrat who oversaw the plan, Johnson recalled. The developer succeeded in getting the city to annex his large land holdings north of town even though the area lacked adequate water and sewer service.
The city’s 1995 General Plan was influenced in a similar way by Roberts, the consultant who pleaded guilty to charges under Operation Rezone. Roberts and developer Jon Thomason, who also is cooperating with federal authorities under a promise of immunity, were named to the citizens committee that mapped out future growth. Roberts told the City Council what zoning he wanted where, including property that Thomason owned and Roberts represented. It was Roberts who colored in the zoning on the final map approved by the City Council.
“They each had an economic stake in the outcome,” said Johnson, a committee member. “And when they didn’t get all they wanted from us, they made an end run to the City Council.”
Johnson and other activists point out that 15 years of pro-developer votes have drained local coffers.
Some home builders have used their considerable influence to get Clovis school officials to excuse them from developer impact fees. The decision has cost Clovis schools about $30 million in fees to build classrooms. Instead, officials gambled that taxpayers would vote to assume the burden of financing new schools through a bond measure--which they finally did after rejecting the idea twice.
Likewise, Fresno has taken on a huge debt to accommodate the visions of builders. Housing tracts and mini-malls sprawling onto farmland typically cost more in public services than they generate in tax revenues. One way to make up this loss is to charge developers adequate impact fees, but Fresno levies some of the lowest fees in the state for a city its size.
The city has had to borrow hundreds of millions of dollars in bonds to pay for new sewer and water treatment facilities. To meet the immediate bond debt, the city has committed itself to build thousands of houses each year and make new residents pay higher fees. Critics compare this to a kind of Ponzi scheme--each new revenue-losing subdivision having to pay for the losing subdivision before it.
“The developers keep asking for more and more,” said Tom Bohigian, a former city councilman. “And no one has the guts to tell them no.”
None of the traditional watchdogs seems to have great interest in pursuing the cozy relationships. Fresno County Dist. Atty. Ed Hunt has failed to prosecute a single case of municipal corruption during his 13-year tenure.
It is not because of a lack of interest, he said. “We’ve had more than one person tell us they were pressured to make a political contribution,” Hunt said. “But none of them was willing to step forward and be counted.”
Critics point out that Hunt has close ties to a number of developers who have contributed heavily to each of his campaigns. Several of these builders are now under FBI investigation, among them John Bonadelle, who started subdividing land in the early 1950s and has enjoyed influence with an ever-changing cast of politicians and bureaucrats. Hunt and Bonadelle share the same political consultant.
“Every year John Bonadelle holds these lavish parties for his friends with jumbo shrimp and salmon and all the booze you want,” said one former city councilman. “And every year, Ed Hunt is there.”
“Anyone who knows me,” Hunt said, “knows that it doesn’t make a difference who I associate with. If they’re involved in a crime, I’ll prosecute them.”
Others point to the Fresno Bee, saying that the San Joaquin Valley’s biggest newspaper has never assigned a full-time reporter to the growth beat.
Keith Moyer, the paper’s new executive editor, has promised a more aggressive approach. He assigned two reporters to the growth beat and recently the paper has broken ground with a number of hard-hitting stories on local corruption. “We see ourselves as a watchdog and we’re going to continue to focus on these issues,” Moyer said.
Operation Rezone involves a painstaking paper trail. FBI Agent Wedick and his main partner, IRS Special Agent Howard Moline, have worked their way through a mountain of campaign contributions, tax forms, real estate records, bank loans and City Council votes dating to 1990.
Investigators said they have been surprised by two things: the incredible wealth concentrated in the hands of a small circle of developers and the arrogance and conceit of some of the town’s leading citizens. “Every time we turn over a rock, there’s something else worth investigating,” said Stevens, the top federal law enforcement official in the San Joaquin Valley.
In 1992, then-Fresno City Councilwoman Esther Padilla cast a controversial vote to allow Bonadelle to build homes in the city’s rural reserve--a swath of land that the City Council had designated off limits to growth.
At first, Padilla did not seem to realize that the vaguely worded motion was hammered out by Bonadelle himself, who was a major force behind her election. She cast the swing vote against the 75-year-old builder, who became irate and stormed out of a council meeting. City staff saw Bonadelle verbally tear into Padilla’s assistant.
Several minutes later, Padilla switched to allow Bonadelle to build hundreds of houses in the reserve. “He raised hell and she changed her vote,” said Karen Humphrey, the mayor at the time. “It was highly unusual.”
Padilla, whose relationship with Bonadelle is a focus of the investigation, has not been charged. She did not return repeated phone calls. Bonadelle, who has had records subpoenaed by federal investigators, said he runs a clean operation.
Federal officials also are looking at Fresno City Councilman Bob Lung and favorable votes that he cast on behalf of developer Thomason. These votes came after Thomason arranged a $70,000 loan for the financially strapped Lung. The loan is one of the subjects on which Thomason is cooperating with federal authorities, they say. Lung, who has not been charged, has declined to comment on the investigation.
And authorities also are interested in Mayor Patterson, who has not been shy about voting in favor of his biggest supporters in the building industry. In 1992, Patterson was the swing vote that gave one project belonging to Thomason unusual traffic access to Herndon Avenue, the town’s main east-west thoroughfare.
Two years later, Patterson encouraged city staff to give free water to a golf course built outside city limits. The golf course belongs to the Tatham family, which gave Patterson a questionable $40,000 loan during the campaign. Patterson denies making any tit-for-tat deals with developers.
“Everybody is fair game,” said FBI Agent Wedick. “We came down there with a two-defendant case and now we’re up to 25 people. There’s no end in sight.”