Los Angeles-Area Sen. Ron Calderon Charged in Massive Corruption Case
In the nine months since the FBI raided his Sacramento office, state Sen. Ron Calderon has maintained one steady defense: He had never been charged with a crime. The Los Angeles County Democrat stuck to that line last fall after an explosive leaked FBI affidavit accused him of accepting tens of thousands of dollars in bribes.
That changed Friday when federal prosecutors charged Calderon with 24 counts of corruption, including fraud, wire fraud, bribery, money laundering and aiding in the filing of false tax returns. The lawmaker, who will turn himself into authorities on Monday, now faces up to 400 years in federal prison.
Calderon’s brother, former Assemblyman Tom Calderon, has been charged as well with multiple crimes, including money laundering. And a Southern California medical executive is pleading guilty to what prosecutors describe as “a long-running health care fraud scheme that involved tens of millions of dollars in illegal kickbacks in exchange for referrals of thousands of patients who received spinal surgeries.”
Prosecutors say Ron Calderon accepted about $100,000 in bribes from Pacific Hospital’s Michael Drobot, as well as undercover FBI agents posing as independent movie producers. In both cases Calderon allegedly took payments in exchange for legislative favors that benefited the alleged bribers’ business interests.
The bribes were primarily paid out in the form of phony jobs for Calderon’s children. His daughter earned nearly $40,000 for her work at the fictional movie studio set up by FBI agents. Calderon’s son actually did report to work for Drobot. He was paid about $10,000 per summer for “approximately 15 days of work. “Anything you can do, any help you could do for my kids is – you know that’s diamonds for me,” Calderon told an undercover FBI agent, according to the leaked affidavit. “That’s diamonds.”
The indictment formalizes the allegations that have been dogging Calderon since October, when Al Jazeera America first published a 124-page FBI affidavit detailing the bribery schemes.
The fake movie producers
The FBI agents pretended to be independent film producers. They wanted Calderon to help pass a bill lowering California’s film tax credit threshold from $1 million to $750,000. In addition to the money they allegedly funneled to Calderon through his daughter’s fake job, the agents lavished Calderon with trips to Las Vegas and meals far exceeding legislative gift limits.
According to the leaked affidavit, one of those Vegas trips led to Calderon partying with rappers Nelly and T.I. on the federal government’s dime.
The film tax credit was never lowered, but Calderon wrote letters, introduced legislation and pushed other lawmakers to create a lower threshold.
The insurance scam
It’s hard to top undercover FBI agents bribing politicians – especially with “American Hustle” contending for best picture this year – but state officials are calling the second aspect of this case “one of the largest workers’ compensation fraud cases in the history of the Department of Insurance.” Michael Drobot, who owned Pacific Hospital in Long Beach, has admitted to funneling more than $30,000 to Calderon in exchange for the lawmakers’ help in blocking an insurance reform bill.
Drobot needed to stop the legislation because it would have put an end to a $500 million scam. For years, Drobot’s hospital had performed spinal fusion surgeries, jacked up the prices of the devices it was implanting, and then charged health insurance providers for the inflated costs. And to generate more business, Drobot paid $10,000 to $15,000 kickbacks to doctors who referred spinal surgery patients to Pacific Hospital.
The hospital was able to charge insurance companies for the spinal implants because of a loophole in California law. Medical hardware was billed separately from other fees. Lawmakers ultimately removed this “pass-through” language in 2013, but before that, Drobot bribed Calderon, the Insurance Committee chair, to try and block the efforts.
Confrontation at the Bellagio
In separate court filing, federal prosecutors responded to Calderon’s earlier claims that they were targeting him due to his refusal to wear a wire and take part in a “sting operation” targeting Senate President pro Tem Darrell Steinberg.
The filing says Calderon’s claims had “no merit,” and revealed that FBI agents first confronted Calderon during a May encounter at one of Las Vegas’s most famous casinos. When Calderon arrived at the Bellagio, ostensibly for another lobbyist-funded romp, “The FBI agents explained to Calderon that they worked for the FBI’s Public Corruption Squad and had been investigating Calderon for quite some time.” Calderon talked to them for three hours that day, and met with the FBI five more times that month.
The federal document reveals Calderon volunteered to wear a wire, and subsequently recorded several conversations with “another individual.”
“Calderon’s recorded conversations with the individual were brief and did not result in any criminal charges against the individual.”
Call To Resign
Calderon will turn himself into authorities on Monday. He has previously denied any wrongdoing. Earlier this month he told KQED he had been “unfairly targeted and retaliated against.” Calderon has has yet to comment on today’s charges.
But Calderon’s fellow Senate Democrats now want him out. In a statement released Friday afternoon, Steinberg called on Calderon to resign.
While acknowledging that as a criminal defendant, Calderon is innocent until proven guilty, Steinberg said, “given the seriousness of charges that strike at the very heart of what it means to be a public official, Senator Calderon’s continued service is a cloud over all the important work that we must get done this year. It is in the best interests of the people and the Senate if he resigns.”
“At a minimum, he should take a complete leave of absence until the criminal proceedings are finished,” Steinberg added. “If he does not resign, or take that leave of absence voluntarily, the Senate will seek to suspend him.”