LOS ANGELES: FBI Investigation Exposes Chinese Imperialism’s Hand in City Council Corruption

By Ulrike Salazar

A federal investigation into the Los Angeles City Council has exposed collusion between Chinese developers and public officials and further corroborated the critical role nonprofits play in gentrification.

The ongoing investigation goes far beyond 14th District City Councilmember José Huizar, whose house was raided first by federal agents on November 7, 2018. Other city council members, their aids, and their families are all being investigated by the Federal Bureau of Investigation (FBI) for political corruption in big city-backed real estate developments, according to a federal warrant made public last week.

The warrant lists the crimes committed by local government officials as bribery, kickbacks, conspiracy, money laundering, extortion, racketeering, unethical conduct and lying about conflicts of interests. The warrant also names several imperialist Chinese real estate developers.

Huizar, whose offices in Boyle Heights and Downtown LA were also raided, was the first member of the city council to be targeted by the FBI, but his corruption has been obvious for some time. He has faced allegations of discrimination and retaliation, and he has been the subject of at least two lawsuits filed by former staffers for sexual harassment (twice, once in 2013 and again in 2018).

During his tenure, Huizar’s district has seen rampant urban development and multi-million dollar gentrification projects.

The FBI investigation has revealed that Huizar may have been receiving payouts in exchange for pushing particular development projects and using his city-funded staff to fundraise for his wife and her job at the private Catholic Salesian High School, his alma mater.

In addition to overseeing a strategic district in LA, Huizar’s rise to the head of the city council’s powerful Planning and Land Use Management Committee gave him even more power and control over land development for the entire city.

The LA masses are not blind to the corruption at City Hall, but the evidence pouring out in Huizar’s case is staggering even to the cynic.

José Huizar, Friend to Chinese Imperialism

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José Huizar

Huizar has been a city council member since 2005 – through four election cycles – and is set to end his last term in 2020. Over the years, he has amassed political power by playing a key role in supporting major developments, especially with foreign investors.

Greenland USA, an imperialist Chinese multi-billionaire real estate developer, was named in the federal warrant released last week. Greenland USA’s parent company is Greenland Holdings Group which is one of the richest real estate developers in the world. Recently, they were ranked number one on Forbes 2018 Global Growth Champions List, making $44.8 billion in sales and $1.5 billion in profits last year.

Greenland USA’s biggest project in LA is the Metropolis Project, the mega-project that is set to be “one of the largest real estate developments in the history of Downtown L.A.,” according to Forbes. Metropolis will be a mixture of luxury apartments, a luxury hotel and a high-end commercial center.

The city council, at the behest of Huizar, approved city funding of $18.7 million to Greenland USA for the Hotel Indigo in 2014. A few years later, Greenland USA is now selling the hotel due to pressure from the Chinese imperialist state, according to news reports.

Greenland USA is not the only Chinese imperialist gentrifying Los Angeles. Shenzhen New World Group/Shenzhen New World Investment, INC. is another mega-group that’s been buying up luxury hotels and apartment buildings in downtown Los Angeles with the full endorsement of the city council and have been advocated for in particular by Huizar.

Perhaps more than any other local politician, Huizar is leading the private Chinese imperialists into Los Angeles by the hand, parceling off pieces of the land like a semi-feudal and semi-colonial comprador.

Chinese Imperialist Crisis Leads to US Gentrification

As part of China’s multi-trillion dollar “Belt and Road Initiative,” an imperialist infrastructure campaign for oppressed nations in Europe, Asia, South America and Africa, Chinese state capitalists have cracked down on private investments that do not align with the state-backed initiative of dominating oppressed nations.

The Chinese state capitalists under the directive of President Xi Jinping have pressured the private capitalists like big real estate developers with stricter regulations on foreign investment such as restricting investment into real estate, hotels and entertainment.

The revisionist-imperialist “Communist” Party of China’s reason for the crackdown is primarily two-fold: stabilize finance capital and bolster imperialist expansion.

Chinese private capitalists have invested billions of dollars overseas but with little to no return of capital back to China.

Additionally, like any imperialist nation, China has been facing its own internal crisis of finance capital. Similar to the US economy, the Chinese economy is a powder keg waiting to explode due to the instability of finance capital that ties all major industries together.

For every large investment that fails to yield enough profit to repay an initial debt, the entire Chinese economy is put at risk of destabilization. The Chinese state capitalists are panicking as Chinese multi-millionaires and billionaires turn their backs on the teetering economy.

The national loyalty of private capitalists is secondary to their pursuit of profits. They will go to any market on earth if it promises a high return, including US markets.

A Rotten Orchard

Even after all the facts of this corruption investigation are laid out in plain daylight, the defenders of capitalism will fight hard to uphold the LA city council at any cost.

These phony critics will make the case that Huizar and the others being investigated are exceptionally corrupt. They will opportunistically use this line to push a bourgeois partisan agenda, blaming the Democratic Party for the crimes of its party members (all LA city council members are Democrats). They’ll push for so-called authentic progressives as alternatives, revisionist candidates from the Green Party or Democratic Socialists of America who wait like vultures for the soon-to-be vacant city council seats.

But the federal investigation is not a question of one or two bad apples.  If it weren’t the Chinese private capitalists gentrifying Los Angeles and displacing the working class, it would have been other home-grown capitalist developers who have their own ties to City Hall.

Los Angeles, like the entire country, is dominated by millionaire and billionaire real estate developers. The housing and construction industry is one of the biggest contributors to the country’s Gross Domestic Product.

It isn’t a problem of corruption. It is a problem of capitalist exploitation. It is a problem of the working class not having political power and self-determination over the economy and their own day-to-day lives.

At the core of capitalism is the robbing of surplus value from the working people who produce all the wealth. There doesn’t exist a progressive candidate that can reconcile this contradiction. It is irreconcilable.

Local anti-gentrification group Defend Boyle Heights’ slogan is to “fight gentrification through revolution.” The displacement of the working class in oppressed neighborhoods cannot be stopped by reforms. It is a political issue and not simply an economic one.

Revolutionaries must convince the masses that the federal investigation is not expunging corruption from city government with this investigation. Huizar and the rest of the capitalist parasites in office are not special cases. They are the standard product of capitalism and imperialism.

Revolutionaries must also unmask the self-described “progressive” defenders of capitalism, the revisionist parties and the nonprofits. In fact, an Incendiary investigation into the 13 people named in the federal warrant has revealed how reformism has accelerated the gentrification of LA neighborhoods.

The Big Gentrification Backers 

Joel Jacinto, board of directors for Alliance for California Traditional Arts

joel jacinto
Joel Jacinto sits on the board of directors for the statewide nonprofit Alliance for California Traditional Arts that focuses on funding art programs. He had also been appointed by Mayor Eric Garcetti to the Board of Public Works in 2015, but submitted his resignation last Friday amidst the FBI investigation.

While that alone doesn’t paint a picture of corruption, it is telling that one of their major partners is the arch-gentrifier California Endowment, one of the vital arteries of financial support to the nonprofit system in the entire state of California.

Through the Building Healthy Communities initiative the endowment funnels millions of dollars into nonprofits that support big redevelopment projects under the guise of “community improvement.”

In Boyle Heights in particular, the California Endowment has given millions to pro-gentrification nonprofits such as the East Los Angeles Community Corporation and Self-Help Graphics & Art.

Additionally, Jacinto also occupies a strategic position of leadership within Search to Involve Pilipino Americans (SIPA) which has multiple ties to city council. SIPA board of director, Stephanie Uy, is the legislative deputy for the 12th District and Ysabel Jurado, who works in the Office of Mayor Eric Garcetti, also sits on the SIPA board of directors.

Chief of Staff Deron Williams to Council President Herb Wesson and the 10th District

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Deron Williams

Herb Wesson heads the city council and oversees the 10th District, which is a historically Black working-class neighborhood in South Central. Rampant real estate development steered by the city and private developers has gentrified huge parts of the district, especially West Adams.

 

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Herb Wesson

Wesson, like the rest of the poverty pimp-politicians, pushes gentrification as a sham job-creating strategy. He supports transient-orientated development along the ever-growing Metro construction and line extension which has contributed to the displacement of working class communities.

Artists like Alise Barret and Eva Chimento, who was recently kicked out of Boyle Heights, are attracted to West Adams precisely because of Wesson’s corrupt capitalist endeavors. In an article on Culture Trip, Barret boldly defends gentrification and calls for more of it.

“‘All we need now,” Barrett said, “is some walkable bars and restaurants. Then this place will be perfect.’”

The federal warrant names Wesson’s Chief of Staff Deron Williams but not much information is available on him as of yet. This will undoubtedly change in the near future as more comes out from the FBI investigation.

Deputy Mayor of Economic Development Raymond Chan

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Raymond Chan

Raymond Chan retired in 2017 but not before being in a key position of power for development and gentrification in Los Angeles.

Chan was the subject of some controversy when his son Jeremy was an intern for the law firm Sheppard Mullin that represented the Millennium Hollywood developer.

During this time, in 2013, Millennium Hollywood was building two skyscrapers in Hollywood. Opponents to the development cited concerns over earthquake faults underneath the construction site as well as a conflict of interest between Chan and the developer. But after a quick and toothless investigation, no chargers were filed and the project was approved.

Sheppard Mullin has been in the cross-hairs of the Defend Boyle Heights coalition, according to several statements, for its notorious support of gentrification in Boyle Heights. The law firm has represented several gentrifiers under the guidance of the firm’s land use lawyer Alfred Fraijo, Jr., who coincidentally sits on the board of directors for Self-Help Graphics & Art.

The Department of Building and Safety, even prior to Chan, has been on the radar of the FBI for some time. In 2010, they were investigated for political corruption and bribery. At least four employees were charged and one employee was sentenced to two and a half years in prison for accepting bribes from developers.

A gentrifier developer must go through the city council to get his project approved but he must also get the necessary building permits for construction. Every point of contact a private capitalist developer has with local government is a potential site of corruption, which is often the case.

Councilmember Curren D. Price, Jr. and the gentrification of the 9th District

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Curren D. Price, Jr.

Price is named in the federal warrant but not much has been made public as to why he is under federal investigation. But as a member of the powerful Planning and Land Use Management Committee, he is responsible for the major displacement in the 9th District.

For the 9th District, also in South Central, one of the biggest development projects was the $1.2 billion Reef Project, pushed and approved by Price.

This luxury hotel, retail sky-scrapper mega deal was popularly protested against by the masses of South Central. But despite this, it passed with a unanimous vote of 12-0. Price led the charge with the poverty-pimp promises of more jobs for the working Black poor of South Central.

Although the Reef is perhaps the biggest project, it is only one of many. South Central has become a focus for imperialist investment. It is imperialist because it doesn’t seek to grow the working class in these neighborhoods. It only wants to increase its investment in non-productive entertainment industries like the multi-million dollar remodeling of the Los Angeles Coliseum and the construction of the new Banc of California Stadium.

This has greatly affected the working class of South Central Los Angeles, both the Black working class and the Spanish-speaking undocumented immigrant masses of Latin America. ICE has collaborated with law enforcement at Exposition Park, where the coliseum and stadium are located. Immigrant street vendors have been brutalized, arrested, ticketed and in a few cases they have been detained in immigration detention centers.

Organizations like the Unidades de Defensa Populares Revolucionarias (People’s Revolutionary Defense Units) have taken on the struggle against the repressive state. Incendiary has followed the story and its revolutionary developments.

The neighborhood redevelopment of South Central has intensified class struggle in the area in all imaginable sectors of society, especially housing. Working-class renters have been evicted around the park due to gentrification development. The University of Southern California, as another big gentrifier, has pushed out working-class residents to build student housing for mostly rich petite-bourgeois and out-of-state students. A local nickname for USC is the University of Spoiled Children due to its reputation for having rich white students.

Price is one of the most important gatekeepers for capitalist developers and the gentrification of South Central. The masses know this and Communists must organize their clamor into rebellion.

Others named in the warrant: Yan Yan, George Chang and Mason Situ

By no means is the list of names in the federal warrant conclusive. Less information is known about Yan Yan and George Chan, but Mason Situ is the general manager of another big imperialist Chinese real estate development company, Shehzhen Hanzen Group.

Situ’s big development project is the $700 million Luxe City Center Hotel in downtown Los Angeles. The hotel is set to open its doors later this year.

Several other city council members, city staff and private developers connect back to Huizar, but more importantly the general corruption of city politics points back to a greater fundamental problem: capitalism-imperialism.

In the final analysis, local government corruption is secondary to the moribund nature of imperialism. The crimes of Huizar and his accomplices are symptomatic of an unstable, exploitative and oppressive economic system.

The city council capitalists and their Chinese collaborators are guilty of carrying out the interests of their class: exploiting the working class and dominating oppressed nations. The task of the Communists and the masses is to carry out the interests of the proletariat and end all classes once and for all.

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