EXCLUSIVE: Bribery Allegations Threaten California Political Dynasty
UPDATE: A federal grand jury has indicted California state Sen. Ron Calderon on a host of charges, including accepting bribes from an undercover FBI agent posing as a filmmaker named Rocky Patel and from hospital executive Michael Drobot.
His brother, Thomas, has also been charged with money laundering and conspiracy to commit money laundering.
The Calderon brothers “took the bribes in return for official acts such as supporting legislation [favorable] to those that paid him bribes and opposing legislation that would be harmful to them,” U.S. Attorney Andre Birotte Jr. said.
If convicted on all charges, Ron Calderon faces up to 396 years in federal prison. Tom Calderon would face a statutory maximum sentence of 160 years in prison.
(02/05/2014): LOS ANGELES — Just over 18 months ago, the movie studio owner known as “Rocky Patel” traveled to the heart of the political empire of California state Sen. Ronald Calderon and his family. At a restaurant in the gritty community of Pico Rivera east of downtown Los Angeles, he sat down to talk to the Democratic lawmaker, whom he had met for the first time only four months earlier.
As Hollywood dealmakers often do, Patel talked numbers. Calderon’s daughter Jessica was looking for people to produce a film called “American Gigolo 2” and, Patel told Calderon, it might be worth investing in the movie if the state would amend its tax code. Instead of granting a tax credit only to movie productions with a budget of at least $1 million, he suggested, the Legislature could reduce the threshold to $750,000.
“There might be a play, you know, to lower the tax credit,” Calderon told the owner of United Pacific Studios. It would depend on “what negotiating position I put myself in and how much they’re actually willing to give us.”
“It’s all about creating jobs, keeping the movie industry here in California, right?” he added, eventually assuring Patel that “I can make that play, and I know that it can happen.”
Calderon had good reason to be confident. He’d served in the Legislature since 2002 and, with his brothers Thomas and Charles, had created a well-oiled political machine. A couple of weeks before his meeting with Patel, his 26-year-old nephew Ian had won the Democratic primary election for an Assembly seat. As a member of the California Film Commission, Ron Calderon rubbed shoulders with the likes of Clint Eastwood and Danny DeVito.
The Calderons “certainly think of themselves as something of a political dynasty,” said Louis DeSipio, a political science professor at the University of California, Irvine.
But as would be revealed when the FBI searched Ron Calderon’s offices in June, Rocky Patel was not really interested in getting a tax break. He was, in fact, an undercover FBI agent. And he was wearing a wire.
According to the search warrant affidavit, agents had begun an investigation of Calderon and his brothers in October 2007, and there was “probable cause to believe” he had committed the crimes of conspiracy, bribery, fraud and extortion by, among other things, accepting $60,000 in bribes from “Rocky Patel” in exchange for supporting the tax-credit legislation and hiring Patel’s purported girlfriend to work in the state Senate.
As part of the scheme, Calderon allegedly had Patel funnel $30,000 to his daughter Jessica, whom the undercover agent had agreed to take on as a purported employee.
“All I need her to do is make enough money to pay for the rest of her schooling,” Calderon told Patel at the Pico Rivera restaurant.
A grand jury has been hearing testimony, and Calderon appeared before the panel in July last year. But he has not been indicted on any charges and has adamantly denied any wrongdoing. In a complaint filed in federal court in January, he alleged that two other powerful members of the Legislature — Senate President Pro Tem Darrell Steinberg and Sen. Kevin de Léon — were the “main targets” of the corruption investigation, “for which Senator Calderon was requested to be the FBI’s informant,” and that the government had leaked the affidavit to the media to “fast track and strong-arm a meritless case against Senator Calderon through the grand jury process and then apparently shame Senator Calderon into accepting a plea agreement.”
A spokesman for Calderon said he would not comment on the allegations for this article. But the scandal has already cost Calderon his coveted chairmanship of the Senate Insurance Committee and his seat on the California Film Commission.
“He has absolutely no power until the floor vote,” said former Assemblyman Rudy Bermudez.
The allegations have also shined an unflattering spotlight on the Calderon family, who, by all appearances, have not been shy to take advantage of a political system in which the needs of campaign donors and special interests often come before those of constituents.
The family has compiled an unbroken string of service in the California Legislature going back to 1980, when Charles Calderon, the oldest brother, was elected to the Assembly. For 34 years, one or more Calderons has represented the tough, working-class, largely Latino communities to the east and southeast of downtown L.A. — unglamorous places like Montebello, Downey, Norwalk and Pico Rivera. The brothers still live in Montebello.
“In his early childhood growing up in East L.A., Calderon saw first-hand the despair of poverty and the paralyzing effects of gangs on his community,” a campaign bio of Charles says.
The Calderons have worked on each other’s campaigns, with Tom, the middle brother, being elected to the Assembly in 1998 after serving as Charles’s campaign manager and consultant. Other family members have chipped in, too — Charles’s sister-in-law Leslie Rodriguez ran the 2012 Assembly campaign for his son, Ian.
Ron Calderon first won office in 2002, succeeding Tom as assemblyman for the 58th District. He held that position until 2006 when he was elected to the state Senate. In that same year, the merry-go-round continued — Charles, who had taken an eight-year break from the Legislature, returned to office as assemblyman for the 58th District, succeeding Ron.
In the state Capitol, the brothers have chaired so-called juice committees such as the Assembly and Senate insurance committees, giving them a significant advantage in attracting campaign donors from outside their districts. According to MAPLight, a nonpartisan research group that tracks money in politics, Charles Calderon’s campaign contributions from Jan. 1, 2007, through May 17, 2010, totaled $1,116,396, 94 percent of which, or just over $1 million, came from outside the 58th District.
The Calderons have been less successful in statewide races. Charles, a former prosecutor, lost the 1998 election for attorney general, while Thomas failed in a 2002 bid for insurance commissioner, despite raising $1.5 million from insurance companies. But in the Calderons’ home territory, “The combination of the name and the political machine has made for something that has been unbeatable,” said Bob Stern, former president of the Center for Governmental Studies.
Rudy Bermudez experienced the Calderon clout first-hand when he ran for election from the 57th Assembly District against Ian Calderon, Charles’ son. The former parole officer had a lot more legislative experience than his opponent, having served as a city councilman in Norwalk before moving on to the state Assembly, where he represented the 56th District from 2002 to 2006. Ian Calderon’s main claim to fame, by contrast, was as a college surfer.
“He had absolutely no background,” Bermudez told MintPress in an interview. “He didn’t even know the district he was running in.”
The 57th District, like the 58th, is heavily Democratic — nearly 48 percent of registered voters are Democrats, 27 percent are Republican, and 17 percent are independent. Within two weeks of the crucial June 5, 2012 Democratic primary election, Bermudez had a handy lead in pre-election polls. But on May 23, campaign finance records show, Ian Calderon received a $371,000 contribution from StudentsFirst, a national lobbying group for charter schools headed by Michelle Rhee, the controversial former chancellor of Washington D.C., public schools. The contribution was roughly double the amount Calderon had raised from individual donors.
According to Bermudez, Charles and Ron Calderon had previously met with other Latino lawmakers at the Capitol in Sacramento and announced that “Chuck was going to lead the charge for StudentsFirst and initiate all these anti-teacher bills.”
Most of the StudentsFirst money — $250,000 — was used to buy time for a TV and radio advertising blitz. Another $50,000 went toward polling voters, and $30,000 was spent on producing the ads. Bermudez, who had raised $190,000, some of it from teachers unions, couldn’t keep up. In the primary, Calderon edged Bermudez by less than one percentage point. The following November, he easily defeated Republican Noel Jaimes in the general election.
“They had a losing campaign and [the StudentsFirst money] turned it around for them,” Bermudez said.
In February 2013, just a few months after Ian Calderon won his Assembly seat, his uncle, Thomas, met with StudentsFirst’s Rhee in Sacramento. The following day, his other uncle, Ron, introduced Senate Bill 441, a sweeping education reform measure that was championed by StudentsFirst and opposed by public school teachers unions.
By that time, however, Ron Calderon had, according to the FBI, met several times with “Rocky Patel” and a federal magistrate judge had authorized the government to search his email account for evidence relating to his support of tax credit legislation “in exchange for bribes.”
“The evil isn’t in the money”
Calderon was well-placed to help the supposed filmmaker. In addition to sitting on the California Film Commission, he had co-authored the legislation that created the tax credit program in 2009 as part of an effort to keep movie productions in California. He and his brothers also had a track record of supporting legislation favorable to special interests and opposing bills detrimental to them, sometimes even having special interests “ghost write” bills that they carried in Sacramento.
According to MAPLight, Charles Calderon received more in direct campaign contributions connected to the payday and title loans special-interest group — $31,450 — than any other member of the Assembly in the 2009-10 or 2010-11 sessions. In the state Senate, brother Ron received the most from the payday group — $50,000.
In March 2011, Charles proposed legislation raising the payday loan borrowing limit from $300 to $500. Critics charged that the bill would benefit payday lenders at the expense of financially vulnerable constituents who would become trapped in spiraling debt. Assembly Bill 1158 passed the Assembly but stalled in the Senate.
Ron Calderon, meanwhile, introduced in 2012 a bill promoted by the fireworks industry that allowed the sale of fireworks between Christmas Day and New Year’s Eve. In 2010, he voted against a bill prohibiting the sale of infant formula in bottles containing the toxic chemical bisphenol A — three weeks after receiving a $1,000 contribution from Abbott Laboratories, a maker of infant formula.
But according to the San Jose Mercury News, 39 percent of all California laws proposed during one recent legislative session were written by special interest groups, not lawmakers. And the Calderons have strenuously denied ever practicing “government for sale.”
“The evil isn’t in the money,” Charles Calderon has said. “The evil is in the heart, and our hearts are in the right place.”
At the Pico Rivera restaurant on June 21, 2012, according to the FBI’s affidavit supporting a search of Ron Calderon’s offices, Patel indicated to Ron Calderon that he would be willing to put Calderon’s daughter Jessica on his payroll the following week if the tax credit threshold could be lowered “sooner rather than later.” But at a Montebello diner eight days later, Calderon cautioned the agent, “We cannot have a ‘quid pro quo’ conversation.”
“I cannot take payment or negotiate payment for Jessica … with the understanding that I’m going to do this for you, and it’s going to be deliberate,” he said.
But the affidavit says Calderon “made it clear to the [agent] … that he would ‘do everything [he] can’ for it to happen.” He also allegedly told another undercover agent in March 2013 that if the agent hired Tom Calderon as a consultant, “it would make the tax credit legislation happen faster.”
To prove bribery, the U.S. Supreme Court has said, prosecutors must show a “quid pro quo” — that payments were made “in return for an explicit promise or undertaking by the official to perform an official act.” But the line between lawful persuasion of an official and illegal bribery is a murky one.
The problem, Professor Bennett L. Gershman of the Pace Law School has written, “boils down to the reality of our contemporary political culture in which massive amounts of money are lavished by corporations and wealthy donors through their lobbyists for the specific purpose of influencing lawmakers — the messy, dirty political culture of back-scratching, secret deal-making, and unsavory favors.”
In the affidavit, the FBI said it had probable cause to believe Ron Calderon had crossed the line into illegal conduct, citing not only the negotiations with Patel over the tax credit legislation but also another $28,000 he allegedly took to protect the interests of Michael Drobot, the owner of a busy spinal surgery clinic in Long Beach, Calif. The investigation of the Calderons had begun in 2007, according to the affidavit, after the FPPC tipped off federal authorities about a $1 million payment from Drobot to Tom Calderon, made after Calderon left the Assembly.
Ron Calderon has responded aggressively to the allegations in the affidavit, hiring high-profile attorney Mark Geragos to represent him. The FBI, he said in his federal lawsuit, has retaliated against him for refusing to wear a wire to secretly record conversations with Sens. Steinberg and de León as part of an investigation of Steinberg’s ties to Drobot.
The Calderons are still raising money, with Ron so far collecting $28,500 for his legal defense fund. But back on the family’s home turf, Bermudez says things have changed.
“People are upset in the district and rightfully so,” he told MintPress. The allegations have damaged the community’s image and deprived it of legislative clout in Sacramento.
But constituents also complain that the Calderons have not used much of that power to help them deal with their tough, “real-life” issues.
“If you ask anybody in the community, they’re going to tell you the Calderons never really represented their interests,” Bermudez said. “They represented the interests of special interests.”
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