L.A. councilman under fire over FBI probe, Vegas trip with his indicted former boss

Just a week ago, Los Angeles City Councilman John Lee was smiling ear to ear in a roomful of cheering and clapping supporters after the first round of election results showed him with a strong lead over his rival, Loraine Lundquist.

Now Lee is facing calls to resign, even as votes remain to be tallied in the race.

The reason: Lee confirmed Monday that he was on a Las Vegas trip where a businessman allegedly lavished his former boss, Mitchell Englander, with cash and other illicit perks. He disclosed the information hours after Englander surrendered to federal authorities, outraging critics who said voters should have been told about the FBI investigation before election day.

“I understand the Justice Department doesn’t want to bring out things about candidates right before an election, but it would have made a big difference if people had known about this,” said Chatsworth resident Richard Mathews, a Lundquist supporter who drafted a petition calling for Lee to step down.

Englander, a former councilman, is facing criminal charges of obstructing a federal investigation into allegations that he accepted cash, hotel rooms, costly meals and the services of a female escort during 2017 trips to Vegas and Palm Springs from an unnamed businessman. He pleaded not guilty and is scheduled to appear again in court later this week.

The federal indictment unsealed Monday said that Englander was accompanied on the Las Vegas trip by “City Staffer B” — a high-ranking staffer who worked for him until roughly June 2017. Lee stepped down that month as Englander’s chief of staff.

Lee said Monday that he was with Englander in Las Vegas but “was unaware of any illegal activities for which Councilmember Englander is being charged.” The San Fernando Valley councilman said in a statement that he had cooperated with the FBI and done “everything in my power to pay for and reimburse expenses related to this trip.”

Lee did not answer questions about whether he is the person identified as City Staffer B or explain what steps he took to pay for expenses incurred in Las Vegas. Federal investigators have not accused Lee of wrongdoing or charged him in the case. His spokeswoman, Grace Yao, added that he was “absolutely not” the recipient of any escort services.

Lee “asks that everyone please look at the facts and not jump to conclusions,” Yao said in a statement Tuesday. The councilman was last contacted by law enforcement about the matter in 2017, his spokeswoman added.

“Given that there is an ongoing legal proceeding, he wants to respect that process and will not be making further comment at this time,” Yao said.

The federal indictment states that City Staffer B was provided with some of the same perks as the councilman and others who attended the Vegas trip, including a hotel room with “VIP” amenities, an expensive meal and bottle service and drinks at a nightclub. Two months after the trip, City Staffer B was interviewed by the FBI about the trip, according to the indictment.

After Englander became aware of the FBI probe, he sent a $442 check to the businessman, backdated to appear as if he had reimbursed the man for some expenses in August before hearing from federal investigators, the indictment states. The package also included a $442 check from City Staffer B with the same August date, according to the indictment.

Federal investigators cited the backdated check as part of a scheme by Englander to “falsify and conceal material facts,” which included coaching the businessman to falsely state that Englander had repeatedly tried to reimburse him.

Lundquist, who has not conceded in the council race, said that “if in fact John Lee is Staffer B, he participated in the cover-up by backdating his ‘reimbursement’ check.”

“And if that is the case, he should resign,” Lundquist said.

Hundreds of people have signed Mathews’ online petition calling on Lee to step down if he is ultimately declared as the winner of the council seat. Among them is Porter Ranch resident Amy Hood-Rettberg, a Lundquist supporter who called it unfair that the federal indictment was unsealed days after the election.

“I have a hard time imagining that he didn’t know something was going on,” Hood-Rettberg said of Lee, citing the fact that he was on the Vegas trip. “We need an overhaul of our City Council. Corruption is rampant. I want someone there who would do something about that.”

Phyllis Winger, a former City Hall planning deputy who worked with Lee in the past, said she still supports him and would have voted for him even if the allegations had emerged sooner. She complained that “no one seems to want to hold back and wait for facts and truth to come out.”

“He’s totally competent and able to continue in the position he has deservedly won,” Winger said Tuesday. “I see no reason for John to step down. ... These are just accusations.”

Lee did not answer questions about what expenses, if any, were left outstanding from the Las Vegas trip. He did not report any gifts on a government form that details his economic interests during that period.

Under Los Angeles rules, council aides are generally supposed to report gifts from people doing business in the city, although a gift does not count as a gift if the giver is promptly reimbursed.

Englander announced he was giving up his City Council seat in October 2018, roughly a year after the FBI first reached out to him for an interview. He left City Hall at the end of December, triggering a special election that Lee ultimately won last August. Lee then went up for a rematch with Lundquist this year.

The U.S. Department of Justice has cautioned prosecutors to “never select the timing of investigative steps or criminal charges for the purpose of affecting any election” and encourages them to seek guidance from the department if they have a question about the timing of charges near an election.

Former federal prosecutor Richard Drooyan, who now works in private practice, called it a longstanding “general policy” of the department.

“Most people feel that the criminal justice system should not influence the outcome of an election,” Drooyan said. “If that individual did something wrong, they will be charged and convicted afterwards and then removed from office.”

Democratic political consultant Brian VanRiper said the FBI appeared to have done the right thing in holding off. But he argued that Lee shouldn’t have run for office knowing about the federal investigation into his former boss.

“If this had come out a week ago, I think Loraine would be on top right now,” VanRiper said.

But Kathay Feng, executive director of watchdog group California Common Cause, said it’s not yet clear to her whether the information contained in the indictment would have been enough to swing the election against Lee. As of the last tally Tuesday, Lee was more than 1,700 votes ahead of his opponent, putting him at nearly 52% of the vote.

And while Englander has been accused of accepting envelopes of cash and the services of an escort, the indictment does not say that Lee or any other city official also received those things, she said.

“Prostitutes make a difference in an election. Cold cash makes a difference,” Feng said. “Sad to say, I don’t know if voters get riled up” about potential violations of gift laws, she said.