Corruption Arrests in Carson
Federal agents unveiled evidence Thursday of widespread corruption in Carson, charging four present and former City Council members with extorting bribes totaling hundreds of thousands of dollars from waste haulers and other firms seeking municipal business.
Prosecutors portrayed a majority voting bloc on the five-member City Council as corrupt, more interested in lining its own pockets than in shopping for high-quality public services at the best price. All, along with two middlemen and three waste-hauling executives also charged in the case, face the possibility of 10 years in prison if convicted.
Carson City Councilman and Mayor Daryl Sweeney and former Mayor Pete Fajardo were arrested and charged with extorting money from businesses over the last three years.
Charged with related crimes were City Councilwoman Raunda Frank and former City Councilman Manny Ontal. Until Ontal resigned his seat in April, he, Frank and Sweeney constituted the council majority that prosecutors allege was for sale.
Unbeknown to his colleagues, Ontal was working as an undercover operative for federal investigators.
He had walked into the U.S. attorney’s office in Santa Ana with a lawyer in September 2000 and proclaimed that he was tired of the corruption, said the lead prosecutor in the case, Assistant U.S. Atty. John Hueston. Ontal confessed his own corrupt acts, Hueston said, and agreed to expose others. Ontal then secretly taped conversations relating to the award of a lucrative waste-hauling contract. Ontal has agreed to plead guilty to accepting an earlier, unrelated $5,000 bribe.
Sweeney, 45, the part-time mayor who serves as chief of staff for Los Angeles City Councilwoman Jan Perry, was portrayed in a grand jury indictment as the ringleader. He told Ontal on tape, prosecutors said, that he saw the award of the multiyear garbage contract as a “long-term opportunity” for council members to collect six-figure supplements to their incomes.
He also said he looked to other city contracts for future payoffs. Seeking to assure Ontal that each of the conspirators would get his fair share, Sweeney said: “I think there are enough things coming down the pike where, if all of them pop, everybody’s going to be set,” prosecutors related in court filings.
Sweeney’s lawyer, John Sweeney, a distant relative, said, “The allegations in the indictment are shocking, and they are untrue.”
Sweeney’s employer, Perry, is “neither a subject nor a target” of what lead prosecutor Hueston described as a continuing, wide-ranging investigation into possible corruption in other cities. Perry said Sweeney was put on unpaid leave after his arrest.
Sweeney’s personal lawyer, Robert Dennis Pryce Jr., 52, of Tarzana, was charged with helping to arrange some of the bribes. His lawyer, Michael Proctor, said Thursday that Pryce looked forward to telling his side of the story and expects to be exonerated.
Former Inglewood city councilman and former Los Angeles Police Officer Garland Hardeman, 46, was charged with attempting to arrange bribes for the accused Carson council members. He has agreed to plead guilty, court records show.
Pryce and Hardeman offered their services to waste-hauling firms as consultants who could help them secure city contracts.
Waste Management, the country’s largest waste hauler, refused to retain either man and lost out, although, the government said, it was low bidder for a 10-year contract, worth tens of millions of dollars, to haul commercial waste.
Two executives with Browning Ferris Industries, a subsidiary of the nation’s second-largest waste hauler, Allied Waste Industries, were charged with agreeing to pay nearly $600,000 in bribes through Pryce late last year.
In return, Sweeney, Frank and Ontal voted earlier this year to award BFI the contract, although the firm submitted the high bid, prosecutors said. BFI later fired the executives who allegedly agreed to the bribe, and was not charged. U.S. Atty. Debra Yang said that is because the firm has cooperated with federal investigators.
Michael Aloyan, president of a relatively small competitor, Compton-based Hub City Solid Waste, offered to pay the largest bribe in the case -- $1.5 million to Ontal, prosecutors said. Aloyan, who later made a token payment of $10,000, court documents show, has agreed to plead guilty and cooperate with authorities.
Lead prosecutor Hueston said Aloyan “is attempting to cooperate” by providing information “beyond the Carson schemes.” Hueston refused to be more specific. Aloyan was an admitted middleman in a separate bribery scandal involving former Compton officials a decade ago.
Earlier this year, The Times reported claims by Waste Management and another firm, CalMet Services, that Aloyan had promised to deliver them a lucrative Compton city garbage contract if the firms paid him $1 million. After they refused, the Compton City Council awarded the contract to Aloyan.
The Times also reported claims by Waste Management that Carson Mayor Sweeney had referred the firm to Pryce when it sought to renew its garbage contract. Pryce allegedly asked for $1 million at one point to help deliver City Council approval, Waste Management told the newspaper.
On Thursday, prosecutors also alleged that:
* Former Carson Mayor Fajardo, 60, who left office last year, offered to guarantee the award of a $700,000 engineering contract in 1999 in return for a $70,000 bribe, which was not paid. The job then went to another firm. Hueston would not say whether that firm had paid.
Fajardo also was charged with accepting $50,000 in bribes from the owner of a senior citizens apartment complex. In return, Fajardo allegedly helped the owner, Michael Padilla, obtain an $850,000 city grant. Padilla, who was not charged, is regarded as a victim, prosecutors said.
* Sweeney’s lawyer, Pryce, abused an unrelated position as one of 45 U.S. Bankruptcy Court trustees in the Central District of California. He allegedly used his position to collect kickbacks.
As a trustee, Pryce was the court’s designee to control debtors’ financial affairs. He allegedly agreed to use Nelson Shelton and Associates as his real estate agent to sell debtors’ properties. The firm hired Pryce’s daughter, public school teacher Kelly Walecki, and paid her half its sales commission. She did nothing to earn the money, and over time, prosecutors said, the Shelton firm paid Walecki $310,000. She returned more than $130,000 to her father. Neither the Shelton firm, which prosecutors view as a victim, nor Walecki were charged.
Pryce also was charged with negotiating a kickback from a construction firm, Scorza and Sons, for repairs on properties owned by debtors. Prosecutors said Scorza was paid about $1.3 million for repairs on two properties and returned about $170,000 to Pryce in cash. The firm was not charged.
The Central District’s chief trustee, Maureen A. Tighe, said in a statement: “This is the first time a bankruptcy trustee has been indicted in this district, and the allegations in the indictment, if proven, would constitute one of the most egregious frauds committed on the bankruptcy system in this district’s history.”
* Former Councilman Ontal told prosecutors that he accepted his $5,000 bribe in 2000 in exchange for making a motion to extend a public bus service contract held by Transportation Concepts. The company was not charged. Prosecutors said they had insufficient evidence -- only Ontal’s uncorroborated account. Ontal also agreed to plead guilty to evading taxes on $33,000 in unreported income.
Councilwoman Frank, a deputy Los Angeles County public defender, has agreed to plead guilty to conspiracy to commit extortion and cooperate with the government, according to court papers filed Thursday.
Sweeney, Pryce, Fajardo and former BFI executive Douglas Allyn Moore were arrested at their homes Thursday morning, and arraigned in the afternoon at the federal courthouse downtown. The other former BFI executive, David Duan Robinson, turned himself in Thursday. His lawyer, Michael Nasatir, said Robinson is “innocent of these charges.”
All but Fajardo posted bail and were freed, prosecutors said. Calls to lawyers representing Fajardo and Moore were not returned Thursday.
The investigation, led by FBI Agent Craig Howland and IRS criminal investigator Steve Berryman, carries a lesson for businesspeople and politicians, U.S. Atty. Yang said at a news conference: “Money does not buy you access. Money buys you a criminal indictment.”
The probe picked up steam last year as a six-year garbage-hauling contract, valued at $36 million and held by Waste Management, neared expiration.
Waste Management sought to negotiate a contract renewal without having to compete against other companies.
Among those who offered help was Hardeman, the former Inglewood councilman. Hardeman asked Waste Management for $1.8 million if he succeeded in getting its contract renewed, prosecutors said. The charges against Hardeman, who is cooperating with the government, say he planned to share the money with any council members who asked; Sweeney and Ontal allegedly asked.
Waste Management ultimately did not employ Hardeman. But at one point, Hardeman believed that Waste Management would pay him $250,000, officials say. He offered $50,000 apiece to Sweeney and Ontal, but Sweeney told him that was not enough, prosecutors said. “I need all of that [$250,000],” prosecutors allege Sweeney said.
Sweeney later told Ontal that he was unhappy with Hardeman, saying that he “would rather have somebody in place ... that I can trust and that is used to dealing ... with big, big, big dollars,” according to a federal indictment.
Sweeney’s lawyer, Pryce, wrote Waste Management, offering his services as a lobbyist for $300,000 in advance and $300,000 upon council approval of the contract extension, prosecutors said.
An attorney for Waste Management then met with Sweeney and was told that if Waste Management paid Pryce, it would get the council votes it needed, the government charged.
Waste Management rejected Sweeney’s alleged offer, but Pryce tried again. In August 2001, prosecutors said, Pryce told Sweeney that Waste Management seemed willing to pay $25,000 per month over three years. Pryce was wrong, prosecutors said.
Waste Management again refused, and the City Council requested bids from all interested garbage haulers.
Last December, Sweeney named himself and Ontal to evaluate the bids, officials said.
Pryce drew interest from executives at Browning Ferris Industries, prosecutors said. Pryce allegedly told Ontal that BFI would pay $585,000: $45,000 in advance and $15,000 a month for three years.
But Sweeney had a problem. He and Ontal had narrowed the field to four firms. BFI was the highest bidder, Waste Management, the lowest.
Sweeney observed that BFI would have to reduce its bid and Pryce then faxed BFI details of Waste Management’s confidential bid, prosecutors said.
Pryce’s fax was sent to an uninvolved city worker, apparently by mistake. The worker circulated it, raising suspicions.
Pryce allegedly told confederates later in the winter that he gave Sweeney and Ontal $10,000 each, and Frank $5,000. Pryce met Ontal at a hotel, handed him a newspaper and told him, “There’s an article inside you need to read,” according to an indictment. Inside were two envelopes stuffed with cash.
Hardeman, the Inglewood consultant, continued to labor on behalf of another waste-hauler finalist, Vernon-based Klistoff and Sons. Hardeman offered Ontal at least $30,000 if he voted to give Klistoff part of the commercial contract. Prosecutors said it was not clear that Klistoff knew of Hardeman’s offer. Klistoff was not charged.
Ontal, Sweeney and Frank voted in February to award BFI the city’s commercial hauling contract for 10 years. BFI then started making its monthly payments of $15,000, court documents allege.