Calderon, brother indicted on public corruption charges; Steinberg calls for resignation (updated)
Federal officials announced indictments against State Sen. Ron Calderon (D-Montebello) and his brother, Tom, Friday on public corruption charges alleging that they took tens of thousands of dollars in bribes from a businessman and from undercover agents posing as Hollywood film executives. The indictments come months after FBI agents searched Ron Calderon's offices.
- Update 4:59 p.m. Tom Calderon pleads not guilty to money laundering
- Update 4:51 p.m. State Senate majority leader Steinberg calls for Ron Calderon's resignation
- Update 12:42 p.m. More details of the charges; Drobot pleaded guilty
- Update 12 p.m. Tom Calderon surrenders, Ron Calderon expected to surrender Monday
- Previously: State Sen. Ron Calderon, brother indicted on public corruption charges
Tom Calderon pleads not guilty to money laundering
Tom Calderon pleaded not guilty Friday afternoon to federal money laundering charges. He entered a courtroom in downtown Los Angeles wearing a blue button down dress shirt, gray slacks and in handcuffs, which were attached to a chain that went around his waist.
His bail was set at $25,000 and he was ordered to surrender his passport. Tom Calderon showed no emotion during the brief hearing.
Afterward, his attorney Shepard Kopp said his client is innocent.
“Tom categorically denies every charge. We look forward to a vigorous defense,” Kopp said after the hearing. “The truth will come out.”
The defense lawyer also questioned the evidence against his client.
“Where’s the evidence that he had any knowledge or understanding that there was any impropriety in the financial transactions?” Kopp asked.
Tom Calderon sat alongside eight other defendants, including Marvin Norwood, who was recently convicted of assault in the Bryan Stow beating case. Norwood is now being prosecuted on federal weapons.
When asked how his client was holding up, Kopp answered: “He’s holding up as well as can be expected for someone who has been charged and arrested for crimes he did not commit.”
If convicted on all charges, Tom Calderon faces a statutory maximum sentence of 160 years in prison.
— Frank Stoltze
Update 4:51 p.m. State Senate majority leader Steinberg calls for Ron Calderon's resignation
Senate leader Darrell Steinberg issued a statement Friday calling for state Sen. Ron Calderon to resign following a federal indictment announced earlier in the day.
Steinberg said he has the full support of the Democratic caucus. Steinberg's statement also offers the alternative of Calderon taking a leave of absence until criminal proceedings are completed, and says that if Calderon does not either resign or take that leave of absence voluntarily, the Senate will move to suspend him.
Read Steinberg's statement:Calderon faces 24 criminal charges, including bribery.
— Mike Roe
Updated 12:42 p.m.: More details of the charges; Drobot pleaded guilty
A 24-count indictment against State Sen. Ron Calderon and his brother, Tom, announced Friday, includes a laundry list of public corruption charges and accuses the Montebello politician of taking tens of thousands of dollars in bribes.
The charges include mail fraud, wire fraud, honest services fraud, bribery, conspiracy to commit money laundering, money laundering and aiding in the filing of false tax returns, according to a statement released by the U.S. Attorney's office in Los Angeles.
Calderon allegedly solicited and accepted $100,000 in cash bribes, along with numerous gifts such as plane trips, gourmet dinners and golf trips, in exchange for supporting or opposing legislation.
In one case, he is alleged to have taken bribes from Michael Drobot, former owner of Pacific Hospital in Long Beach.
Drobot admitted to authorities that he paid bribes to Ron Calderon to help preserve a law that provided him a loophole that he exploited in a long-running health care fraud scheme. He has agreed to plead guilty to charges of conspiracy and paying illegal kickbacks, according to the U.S. Attorney's office.
"As his plea agreement reflects, Mr. Drobot has acknowledged and accepts responsibility for his actions. He is providing information to assist the government in its expanding investigations," Drobot’s attorneys Jeffrey Rutherford and Janet Levine, said in a statement.
A representative from the State Insurance Department was at the Department of Justice press conference and called it "the largest insurance fraud" in California history.
In another case reminiscent of major federal sting operations such as Shrimpscam and Abscam, Calderon solicited and then accepted bribes from federal agents posing as independent film studio executives in exchange for supporting an expansion of the state's Film Tax Credit. Calderon agreed to support the legislation in exchange for his daughter being paid $3,000 a month for a job he knew she couldn't perform, according to the indictment.
Tom Calderon is charged in the money laundering conspiracy and with seven substantive counts of money laundering.
If Ron Calderon is convicted, he faces up to 396 years in federal prison. Tom Calderon would face a statutory maximum sentence of 160 years in prison.
Fernando Guerra, professor of political science and director of the Center for the Study of Los Angeles at Loyola Marymount University, told KPCC's Larry Mantle that the indictments could break the power of the Calderons, who represent a political dynasty in southeast Los Angeles County.
Termed out of the Senate
Ron Calderon is termed out of his Senate seat this year. Tom Calderon at one point planned to run for his brother's seat, but he abandoned the race last fall. Days later, a sealed affidavit was leaked, naming the Calderons as targets of an FBI investigation.
Tom Calderon was in the Assembly for four years until 2002. His name surfaced in that affidavit because of money that had been funneled to his consulting firm from the Latino Legislative Caucus. The money was allegedly part of an agreement that Ron Calderon would not seek the chairmanship of the Caucus.
Their older brother, Charles Calderon, was elected to the state Senate 24 years ago and ultimately termed out as Assembly Majority Leader in 2012. He recently registered to run for a Los Angeles Superior Court judgeship.
Charles Calderon's Assembly seat was inherited by his son, Ian, who is seeking re-election this year. Ian Calderon could see his position diminished in the Assembly, Guerra said.
The family had gained political momentum by entering the fray right at the time when Latino political empowerment was beginning and because they made use of the best new techniques in get-out-the-vote efforts, Guerra said on AirTalk.
"They were always at the cutting edge of what new electoral techniques were being used to mobilize individuals, identify voters, get the vote out. And so they not only got themselves elected, but they got people elected to the Montebello City Council, the school board, other cities around there, water districts, etc., because of the organizational techniques that they had," Guerra said.
Senate President Pro Tem Darrell Steinberg told Mantle that he learned this morning the indictments were imminent.
Steinberg stripped Calderon of his committee assignments after the federal affidavit was leaked last year. He told Mantle on AirTalk that he did not know what steps he would take next until he was familiar with the details.
"I want to have the opportunity to fully read the indictment itself before I make a comment. Obviously, this whole chapter is very troubling."
In the leaked affidavit, Calderon is quoted as telling an FBI undercover agent: "I am in so tight with [Steinberg]...He will do whatever I want."
Before the FBI searched Ron Calderon's office last June, Steinberg had endorsed Tom Calderon's candidacy for his brother's senate seat.
Assemblymember Cristina Garcia, who is co-chair of the Assembly Ethics Committee, called the scope of the indictment "stunning."
"Much of this corruption has occurred in my own backyard, where I have fought for ethical behavior and public accountability at all levels of government," Garcia said. "Today’s charges are a setback and damaging to our political system. All of us in public office must be part of rebuilding public confidence and I am committed to authoring a legislative package of reforms to make democracy work for everyone in our state."
The Senate Ethics Committee had been asked by the Department of Justice not to conduct its own investigation until federal officials had completed theirs. The committee could now take action against Calderon if it chooses.
Another state senator from Southern California, Rod Wright of Inglewood, was recently convicted of lying about whether he lives in the district he represents. Wright was stripped of the committee he chairs, but was allowed to remain as a member of other committees.
Updated 12 p.m.: Tom Calderon surrenders, Ron Calderon expected to surrender Monday
State Sen. Ron Calderon and his brother Tom were indicted Friday on public corruption charges eight months after FBI agents raided his Sacramento office, the U.S. Attorney's office said in a news conference.
Tom Calderon surrendered to authorities Friday morning and was slated to appear in court later Friday. Ron Calderon was traveling and is scheduled to surrender on Monday. (Read the full indictment below.)
Federal authorities spoke at a midday news conference to discuss the indictments.
According to the indictment:
- Ron Calderon "executed a scheme to defraud the citizens of the state of California of their right to the honest services of their elected officials through bribery and kickbacks, and the concealment of material information."
- Ron Calderon sought bribes and kickbacks for himself, his children, the Calderon Group (this is Tom's consulting group) and Californians for Diversity (a nonprofit run by Tom Calderon)
- Michael Drobot, former chief executive of Long Beach's Pacific Hospital, is alleged to have paid bribes to Ron Calderon. Ron Calderon also allegedly sought employment from Drobot for his son, got trips on private planes, ate at expensive restaurants and played golf at high-end resorts
- Drobot, 69, pleaded guilty to two counts in a scheme in which he billed workers’ compensation insurers hundreds of millions of dollars for spinal surgeries performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks, the Department of Justice said. Drobot was cooperating with federal prosecutors. He faces a possible sentence of 10 years.
- Ron Calderon's son was hired by Drobot to work in the summers of 2010, 2011 and 2012. Each summer, the son was paid $10,000, and each summer he worked just 15 days.
- Regarding bribes from undercover FBI agents posing as film studio executives, Ron Calderon took trips to Las Vegas, received meals and got employment for his daughter. Eliminating the spinal pass-through could have saved California taxpayers $60 million.
Previously: Calderon was elected to the state Assembly in 2002 and joined the state Senate in 2006. Federal authorities have tracked him on and off since 2007 after receiving a complaint from the Fair Political Practices Commission.
It wasn't until the fall of 2011 that an undercover FBI agent, posing as a film studio executive, began to cultivate a relationship with the senator. Over a period of about 18 months, the undercover officer allegedly gave Calderon $60,000 in exchange for favorable legislation on film tax credits. Details of that FBI sting were first made public last fall when Al Jazeera America obtained a confidential FBI affidavit.
TIMELINE: The FBI's investigation of Ron Calderon
That document also detailed an apparent scheme between Calderon and Michael Drobot, CEO of Long Beach's Pacific Hospital. According to the affidavit, Calderon accepted $28,000 in bribes from Drobot in exchange for legislation to delay or limit changes to the state's workers' compensation laws.
Calderon has denied any wrongdoing.
Calderon is part of a political dynasty that has ruled southeast Los Angeles County for decades. His older brother, Charles Calderon, was elected to the state Senate 24 years ago and ultimately termed out as Assembly Majority Leader in 2012. That Assembly seat was inherited by his son, Ian, who is seeking re-election this year.
Tom Calderon was in the Assembly for four years until 2002. His name also surfaced in that leaked affidavit because of money that had been funneled to his consulting firm from the Latino Legislative Caucus. The money was allegedly part of an agreement that Ron Calderon would not seek the chairmanship of the Caucus.
The leak of that affidavit prompted Senate President Pro Tem Darrell Steinberg and the Senate Rules Committee to strip Ron Calderon of his committee assignments.
Steinberg told KPCC's Air Talk Friday that the FBI informed him that the indictments would be announced on Friday. Steinberg said he wanted to read the indictment before he made any comment, but he did say "this whole chapter is very troubling.”
Stripping Calderon of his committee assignments left him with very little power.
"He's wounded terribly," Jaime Regalado, emeritus professor of political science at Cal State Los Angeles, said at the time. "There's no question about that."
The FBI investigation has brought back memories of "Shrimpscam." Twenty-five years ago, federal agents posed as reps for a shrimp processing company during an undercover operation. The agents bribed selected officials in exchange for their support. Ultimately, three lawmakers went to jail.
This story will be updated; please check back frequently for more information.