update [8/8] Kevin Roderick at LA Observed on August 4 2009 9:20 PM published an excerpt of the original daily journal article – available h e r e. since than the mayor sam's sister city blog published the entire article following.
Daily Journal Exclusive on Federal Investigation involving Councilman Jose Huizar and former School Board Member David Tokofsky
By Ciaran McEvoy and Greg Katz Daily Journal Staff Writers
LOS ANGELES - Federal authorities are investigating Los Angeles City Councilman Jose Huizar and former Los Angeles Unified School Board member David Tokofsky in connection with payments they received from a nonprofit group founded by late labor leader Miguel Contreras, the Daily Journal has learned.
The heart of the probe involves what, if any, work the officials completed for the roughly $30,000 in fees they were each paid while they were both sitting school board members, three sources with direct knowledge of the investigation said. At the time, school board members were paid about $24,000 a year for their official duties.
Authorities are also investigating whether the money for payments from Voter Improvement Program Inc. originated from entities that had business before the school board that the two officials could influence, according to sources who spoke on the condition of anonymity because of the sensitivity of the investigation.
It is legal for elected officials to earn outside income in addition to their public work. But it is illegal for them to receive personal income from outside sources related to the discharge of their official duties.
In an interview, Tokofsky said he was unaware that he was the subject of any federal investigation. He defended the money he received from the group, saying the work he did for VIP was legitimate. He declined to elaborate.
Huizar, who was contacted in person at his home, would not comment. He later issued a statement through a spokesman saying he "would be willing to cooperate with any inquiry."
It is unclear when or whether an indictment will come down. Some sources said criminal charges may be close, but others indicated prosecutors may ultimately decide not to file a case.
Witnesses have recently been called to testify before a grand jury. Thom Mrozek, spokesman with the U.S. attorney's office in Los Angeles, declined comment.
Several sources told the Daily Journal that documents were filed under seal in February and March asking a judge to remove Assistant U.S. Attorney Craig H. Missakian from prosecuting the case because of his political history as a Republican candidate for the California Assembly.
In 2000, union-backed Democrat Dario J. Frommer defeated Missakian in a hotly contested race for the 43rd Assembly District in the Glendale-Burbank area. Secretary of State campaign finance records show that the Los Angeles County Federation of Labor donated directly to Frommer's campaign -- and also made a donation to VIP for its efforts to get Frommer elected.
Frommer served in the Assembly from 2000 to 2006 and was its majority leader from 2004 to 2006.
U.S. District Judge Christina A. Snyder declined to disqualify the prosecutor from the case, several sources said.
LAUSD records show Huizar and Tokofsky both reported receiving payments from VIP for amounts between $10,000 and $100,000 in 2003 and 2004.
Tokofsky filed his 2003 report, which disclosed his personal income from VIP, a year late, in 2005. He paid a $100 fine for the late disclosure, which he documented in his report for 2004.
While Huizar and Tokofsky were not the only consultants hired by VIP, sources said the timing and payment amounts were similar enough to arouse suspicion. It was unclear what either did for the get-out-the-vote organization.
The payments to Huizar and Tokofsky stopped after Contreras died in 2005, the same year Huizar was elected to the city council. Tokofsky left the school board in 2007 after deciding not to seek a fourth term.
Sources said the investigation into Huizar and Tokofsky spun off from a broader look at VIP that has been going on for years.
The organization was founded in 1997 to register and educate voters as well as campaign for ballot initiatives. Contreras, head of the powerful Los Angeles County Federation of Labor, was chairman of VIP's board of directors until he died in 2005.
VIP, which identified itself as a fundraising and political advocacy organization, attracted scrutiny several years ago for its political activism on behalf of union-backed causes and candidates. It solicited money from entertainment conglomerates, energy companies, unions and others, some of whom later said they thought the funds were strictly for voter education drives.
Unions are forbidden from taking employers' money in their fundraising. VIP, which was not a union but was founded and run by prominent union organizers, raised money from employers.
The group also appears to have done political work. Antonio Villaraigosa, for instance, hired VIP to provide phonebanking for his failed 2001 mayoral run, records show.
In 2005, then-state Assembly Speaker Fabian Nunez, D-Los Angeles, came under fire for accepting $35,000 a year from VIP for consulting work. He subsequently cut his ties to the group.
VIP dissolved in 2006 and its remaining funds were transferred to Los Angeles Alliance for a New Economy, records show. Among VIP's board members was Madeline Janis, LAANE's executive director.
"It was a group that had a mission and a purpose," she said of VIP. "Hundreds of volunteers knocked on doors in south L.A. and East L.A. to get people to vote."
Janis declined to comment on the investigation.
Missakian was also involved in the prosecution of former Los Angeles City Councilmember Martin Ludlow, who resigned as head of the labor federation in light of embezzlement allegations in 2006. The case was prosecuted jointly by the U.S. attorney's office and Los Angeles County district attorney's office.
Authorities accused Ludlow of scheming with the head of Service Employees International Union Local 99 to pay workers for Ludlow's city council campaign out of union coffers. The pair were alleged to have falsified union records and fabricated documents.
Ludlow, who was the federation's political director under Contreras, pleaded guilty to conspiring to violate federal labor laws that prohibit embezzling from a labor organization.
ciaran_mcevoy@dailyjournal.com
greg_katz@dailyjournal.comLink to the Daily Journal here. (Daily Journal is a "paid subscription" site)
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