Mayor Antonio Villaraigosa "does not
discuss his friends' private business matters with them...It's not part of the mayor's agenda to worry about people's private
business dealings."
That is one of the most laughable quotes of all time, laughable if it wasn't the best that Deputy Chief of Staff Matt Szabo could do to deflect questions about a dirty deal that stinks so bad all the hot air in City Hall won't be able to blow it away.
In a story that took many weeks of tough reporting to nail down, David Zahniser in the LA Times revealed today how mayoral insider, pal and key adviser Ari Swiller' outmaneuvered the Department of Water and Power to buy the 68,000-acre Onyx Ranch in Kern County for a wind farm site.
The deal "highlights the dual roles played by ...Swiller, an entrepreneur whose field, renewable energy, has received a significant boost from the mayor's pledge to make Los Angeles 'the greenest big city in America," Zahniser reports
The threads of the story tie together like a noose.
Ties between the mayor and Swiller date back to when Villaraigosa and Swiller were both employed by supermarket billionaire Ron Burkle in 2001. Swiller was a key fund-raiser in that campaign and subsequent campaigns, emerging as the man in charge of those operations and political appointments even as he was buying the valuable wind farm property DWP had tried to get for years.
Swiller's company, Renewable Resources Group, was founded in 2004 to develop and invest in clean energy with the help of David Freeman, who was appointed in April to handle environmental issues for Villaraigosa and who has taken the lead in driving the mayor's effort to make LA "the greenest city in America."
Swiller's partner in the Onyx Ranch deal is none other than the CIM Group, the Hollywood-based real estate company that ranks near of the top of the list of beneficiaries of City Hall's special-favors-for-special interests practices.
"City Hall. Over the last seven years, city agencies have agreed to provide CIM with $58 million worth of loans and subsidies," Zahniser report. "And two city pension boards have agreed to invest up to $115 million in CIM funds on behalf of city retirees...CIM Group had persuaded the California Public Employees Retirement System to invest up to $200 million in a new infrastructure fund managed by the firm."
It's not like Swiller doesn't give a damn about the city he's helping the mayor to ruin.
He offered to sell half the Kern County property to the DWP for $65 million -- a property he bought out from under the DWP for $48 million.
Business is business, just ask DWP General Manager David Nahai who is doing everything he can to engineer billions of dollars in solar, wind and other renewable energy projects for distribution among the friends and allies of the mayor.
"(Swiller) has this friendship to the mayor. He's an advisor to the mayor. But at the same time, he's a business person," Nahai said. "So if nothing untoward occurred here, he'd be as free as anybody else to try to do a business deal."
That, my friends, is the moral sensibility of the people who running LA , the people who want blank checks for billions of dollars in public money so they can profiteer from the environmental concerns we all share.
It's a small world inside City Hall, small and laughable if it weren't so dirty.
That is one of the most laughable quotes of all time, laughable if it wasn't the best that Deputy Chief of Staff Matt Szabo could do to deflect questions about a dirty deal that stinks so bad all the hot air in City Hall won't be able to blow it away.
In a story that took many weeks of tough reporting to nail down, David Zahniser in the LA Times revealed today how mayoral insider, pal and key adviser Ari Swiller' outmaneuvered the Department of Water and Power to buy the 68,000-acre Onyx Ranch in Kern County for a wind farm site.
The deal "highlights the dual roles played by ...Swiller, an entrepreneur whose field, renewable energy, has received a significant boost from the mayor's pledge to make Los Angeles 'the greenest big city in America," Zahniser reports
The threads of the story tie together like a noose.
Ties between the mayor and Swiller date back to when Villaraigosa and Swiller were both employed by supermarket billionaire Ron Burkle in 2001. Swiller was a key fund-raiser in that campaign and subsequent campaigns, emerging as the man in charge of those operations and political appointments even as he was buying the valuable wind farm property DWP had tried to get for years.
Swiller's company, Renewable Resources Group, was founded in 2004 to develop and invest in clean energy with the help of David Freeman, who was appointed in April to handle environmental issues for Villaraigosa and who has taken the lead in driving the mayor's effort to make LA "the greenest city in America."
Swiller's partner in the Onyx Ranch deal is none other than the CIM Group, the Hollywood-based real estate company that ranks near of the top of the list of beneficiaries of City Hall's special-favors-for-special interests practices.
"City Hall. Over the last seven years, city agencies have agreed to provide CIM with $58 million worth of loans and subsidies," Zahniser report. "And two city pension boards have agreed to invest up to $115 million in CIM funds on behalf of city retirees...CIM Group had persuaded the California Public Employees Retirement System to invest up to $200 million in a new infrastructure fund managed by the firm."
It's not like Swiller doesn't give a damn about the city he's helping the mayor to ruin.
He offered to sell half the Kern County property to the DWP for $65 million -- a property he bought out from under the DWP for $48 million.
Business is business, just ask DWP General Manager David Nahai who is doing everything he can to engineer billions of dollars in solar, wind and other renewable energy projects for distribution among the friends and allies of the mayor.
"(Swiller) has this friendship to the mayor. He's an advisor to the mayor. But at the same time, he's a business person," Nahai said. "So if nothing untoward occurred here, he'd be as free as anybody else to try to do a business deal."
That, my friends, is the moral sensibility of the people who running LA , the people who want blank checks for billions of dollars in public money so they can profiteer from the environmental concerns we all share.
It's a small world inside City Hall, small and laughable if it weren't so dirty.
Ron Kaye
We've got a new city attorney. Can we get him on this case and start throwing some CIM bandits in jail.
this is a call for the federal goverment to step in and beging criminal investigations
there is more to this so call mayor and city hall and ladwp
this criminala have runn los angeles if they where the mafia
looks like the mayor help his so call friend before he help ladwp on this deal
city hall have ranksack los angeles we need to stop them.
It’s pathetic the same individuals who continue to complain about the mayor are the individuals that voted for him. You got what you voted for.
It’s pathetic that the same individuals who continue to complain about the mayor are the same individuals that voted for him. You got what you voted for.
Brilliant David “Zuma Dogg” Saltsburg
He went off on a tirade against Essel, Krekorian and Galatzan that brought cheers from the crowd and squeals of laughter from some.
"CHRIS ESSEL IS THE QUEEN OF SPECIAL INTERESTS!!", he erupted. He made another passing mention about Tamar getting in the Mayors 2 million dollar "getaway car" to get on the LAUSD board.
He attacked Krekorian and his time in the State Legislature by saying "Krekorian bankrupted the State! He took us there!!".
The same individuals who complain about the mayor will vote for the “Big 3 Special Interest Group Providers.”
David captured the quote of the evening, when, talking about Krekorian, Essel, and Galatzan, he said "talk to them tonight, because once they get an office in City Hall, they will never talk to you again!!"
Angelenos in Council District 2 need to get out and VOTE on Tuesday, September 22. If you don't vote, you don't count.
Vote for a TRUE REFORMER "David (Zuma Dogg) Saltsburg"
When you say it's a property "the DWP had been trying to get for years," don't you mean, wanted but wasn't willing to pay enough for? If Swiller didn't buy it, someone else could have, and used it for massive development. The speed with which you just to criminal conclusions is just bizarre.
The article concludes by saying that the city of Vernon may be the "target of its (DWP's) eminent domain lawsuit," in other words, the DWP is trying to just take the land. Maybe that's an indication of how DWP's handled the "neogiations" all along. Much as I want the DWP to be a good negotiator and get value for the buck, something sounds fishy here.
Good for Nahai not agreeing to spend more than the DWP has or thinks the land was worth, but nowhere in the article does it say how much DWP was offering the Rudnicks even though they and private parties had been haggling for years. Also just because Swiller's joint venture resold some of the land for a profit, does not mean as Zahniser claims that the Rudnicks could have done the same: if they could have, they'd have done so years ago. Zahniser starts his article admitting that family members had disagreed for years over how to proceed with disposing of the land - the value of an asset is what the buyer believes it is, and how they use and pitch it. It's also faulty to quote Patsouris' speculation as though it were fact.
The L.A. Times's headline is misleading.
The DWP was not "outmanuevered" at all.
Rather, the evidence indicates that all the entities are being maneuvered according to a single plan: cronies buy land at low price, then have their career politician lackeys buy the land from them at a high price, using taxpayer money.
This is the same story that happens every day downtown. It's a variant on the multi-million-dollar subsidies for the downtown developers and "anti gang" programs, and the dollar-a-year leases.
They get away with it because the local media -- with a few remarkable exceptions like David Z -- are too lazy to hammer home to oblivious voters how badly they're being ripped off.
Meanwhile, those of us stupid enough to have stayed here this long better start heading towards the exits. There is no scenario where this town pulls out of the nose-dive.
To all the apologists for the midget mayor:
Do you understand now why did he attend that "Clean Energy Summit" in Las Vegas? The topless pool wasn't the main objective, no -- he was lining up more deals to enrich himself & his cronies.
So many interesting coincidences in this story:
1) A mayor's pal Swiller just happens to be an investor in renewable energy;
2) "Swiller's company, Renewable Resources Group, was founded in 2004 to develop and invest in clean energy with the help of David Freeman, who was appointed in April to handle environmental issues for Villaraigosa";
3) "Swiller's partner in the Onyx Ranch deal is none other than the CIM Group, the Hollywood-based real estate company that ranks near of the top of the list of beneficiaries of City Hall's special-favors-for-special interests practices.".
So don't give me that cr*p about Villar bringing green jobs to LA. He's raking money in his pockets, that's for sure.
Congratulations on your excellent choice for a mayor!
Walter, not following your logic. If "cronies buy land at low price, then have their career politician lackeys buy the land from them at a high price, using taxpayer money" shouldnt that mean that the LADWP would buy the land from Swillar and his company? In this case, Swillar tried to sell to LADWP but Nahai didnt buy it and they sold it to Vernon.
Nahai did a good job on this one.
My comment @2:03 is not an apology for "the midget mayor," just saying that Swiller didn't do anything wrong from the looks of things, and clarifying some insinuations and quotes intended to bolster David Z's pre-ordained conclusions. If David Z and the Times want to go after the mayor, they should stop doing it indirectly by attacking people he knows, something they've done for a while. It's cowardly and unprofessional.
And 8:09 has a point, underscoring that this couldn't have been some "plan" hatched by the mayor and Swiller in cahoots with DWP since DWP didn't buy the land from Swiller, and is not trying to just take it from Vernon by eminent domain. Sounds like Swiller steppsd in and saw an opportunity when the other players couldn't make up their minds or come to an agreement. (What about the bigger half of the land that Swiller didn't sell to Vernon? Does DWP want to negotiate for that? The article doesn't say.)
The problem is that the Mayor seems to be associated with the dregs of society including CIM that has looted the city treasury at the Mayor's directive via CRA.
To: 8:25
That Swiller must be quite a genius businessman indeed! To be in the right place at the right time to make this killer of a deal, wow!
I'm sure he's as pure & innocent as Mother Theresa!
To: 8:09
You're missing an interesting point in the article:
"... CIM Group had persuaded the California Public Employees Retirement System to invest up to $200 million in a new infrastructure fund managed by the firm.
A marketing booklet promoting that fund talked up plans to "acquire a 68,000-acre ranch located near Tehachapi" for development of a wind farm. A spokesman for the firm declined to say if any of its investment funds financed the purchase of Onyx Ranch."
So it's very possible that it was the taxpayer money that financed the deal of this very ingenious entrepreneur and good friend of the mayor, Mr. M Swiller who, of course, didn't have ANY conflict of interest whatsoever.
More Kool-aid please!
Hey, Walter, you're a lawyer -- do we, the taxpayers, have any recourse in any of this? Can we petition the city attorney to open investigations into this deal as well as mayor's ties with AEG (what did AEG get in return?).
if it looks like a duck and quacks like a duck, maybe (just maybe!) it's duck!
You know that Mother Theresa had trouble with her faith......
Jake: I like the new City Attorney, he comes across as a professional and a Maverick. However there is one problem that was exposed at the Neighborhood Forum. Although Trutanich said he represents the Citizens. He also said that the City Council, officials [and the Mayor] are his clients.
9:11; you are missing the point from 8:09; how did Swillers political connections help him in this deal?
Nahai and the DWP turned down their offer to sell them 1/2 the land. Swiller and Company asked for more than it was worth and the DWP turned them down. They then sold to the City of Vernon. Again, how did Swillers connections help him there. If DWP bought the land, you could say he profited from connections. But they did not.
The famous question from the Watergate investigation applies to this incident:
"What did he know and when did he know it"?
Did the Mayor's friend have "inside information" about DWP's intention to purchase? Or did the Mayor's friend "tip" the Mayor about the site and then somehow a suggestion was made to the DWP to purchase the land?
This goes to the heart to State ethics laws and conflicts of interest.
In any case, it doesn't pass the smell test. Any investigation should be conducted by an agency removed from the City. County, State, or Federal. There needs to be a firewall between the investigating agency and the City/Mayor.
It is a real shame that an honorable person, U.S. Attorney Thomas O'Brien has left his post for private practice. He was purported to be investing the Mayor and perhaps could have expanded his investigation in this matter.
Nahai may have passed on Swiller's deal, but we must ask WHY?
Is there a better crooked scheme in the offing?
Like Laura Chick said of the the underhanded, self serving deal known as Measure B, "The process here stinks."
This is in reply to 9:42 and 8:09
To 9:42: Do we have a remedy? Yes. Every four years, we have elections. The local media and the voters just blew the last one. You may look forward to four more years, minimum of this kind of abuse of trust.
To 8:09: Let me try again:
1. The newspaper said the DWP was outmaneuvered by the company that bought the land. The company outbid the DWP for the land, supposedly disappointing the DWP. With me so far? Yes, you are.
2. My point is that the DWP was not "outmaneuvered" by the company at all. Rather, the evidence suggests to me that the plan was to have the company buy it first, THEN sell it to the DWP at a higher price. That's the beginning and end of the point and the logic.
3. You point out that the City of Vernon then bought SOME of the land from the company at an inflated price.
a. That does not show that the DWP was outmaneuvered by the company.
b. At most, it would show the power brokers, the City and the DWP were outmaneuvered by Vernon.
c. I would be very interested to know why Vernon bought it. I'd love to see some grand jury subpoenas on that one. I mean, Vernon?!
d. I also have never heard of one city obtaining another city's property through eminent domain. That sounds completely impossible to me.
4. The company that bought the land still has more land, right? What do you want to bet that part of the plan -- maybe it's Plan B -- is to have the City buy the remaining land from the company.
Nahai's quote about Shiller being just a businessman who is free to act reminds be of another famous quote from Tammany Hall: "I saw my opportunities, and I took them."
Self-dealing and conflict-of-interests are NOT the values of a good government.
First off, the original Onyx Ranch owners, the Rudnick Clan, got screwed big time (else there is some big time under the table cash being passed). They sell to Swiller for $48 million, with financing by State money CALPERS.
Then the City of Vernon buys ABOUT HALF the property for a wind farm for $42 million. Swiller and his cronys have just made a huge profit. Vernon was probably desperate to increase it's "clean" energy usage. They were probably threatened by the Feds to increase "green" or else lose big money Fed Grants.
Nahai at DWP says he's unwilling to pay $65 million for the REMAINING HALF for it's wind farm. Of course, Nahai is a liar and will pay anything to get the property. So my guess is that Nahai and DWP will eventually pay a little less than $65 million.
So, the taxpayers will get screwed again for overpaying for property and Villaraigosa's cronys (ie. Bill Clinton and the Billionaire Boys) get rich at our expense.
Regarding eminent domain, only Kern County can declare it and take the property. But, there must exist some buddy-buddy (I'll scratch your back you scratch mine) relationship between Los Angeles City and Kern County to take any implied threats of eminent domain seriously.
Ron, normally you're a good read and you're reporting is not as lazy as this blog post. You filled your post with innuendo rather than fact.
Businessman, who is friends with Mayor, knows that a property is very valuable, so he buys it; sells half of it for a nice profit.
How is this any different than if I bought a house and flipped it for a big profit?
Should we all grab torches and head to City Hall? Of course not.
Come on, Ron. The fact that the guy is friends with the Mayor is not a reason to be up in arms.
Dude, L.A. has so many problesm, who cares if a guy bought land and tried to sell it to the DWP for more than he paid for it? When did that become illegal?
I have a feeling that Ronnie Kaye would arrest the owner at my local deli for making a profit on a salami sandwich. Let's see... the salami costs the market 20 cents a slice, but if you put in a sandwich, it costs $5! What a mark-up! And the deli owner is friends with the Mayor! Conspiracy!
Is there any way that I can sign up to work for J. Ari Swiller? Sounds like a smart businessman.
Or alternatively: Swiller bought the property for $48MM and tried to sell half of it to DWP for $65MM. DWP said NO, because they can use eminent domain to force Swiller to sell them the whole property at market value, which is clearly the $48MM that Swiller just paid for it.
So Swiller sold to the City of Vernon the same half of the property for only $42MM. Why did Vernon pay only $42MM, while DWP was being asked for $65MM for the same property?
Ownership by Vernon protects the property from eminent domain and Vernon's reputation for corruption makes LA look amateurish. In the stock market, this is known as 'parking'. It would seem the goal is still to sell the property to DWP for a profit.
I wonder whether Swiller's original calculations were derailed by the fact that Trutanich got elected City Attorney instead of Jack Weiss, who was Antonio's and Swiller's guy and was expected to be a shoo-in for the job.
I don't see how the City of Los Angeles can exercise the power of eminent domain in BAKERSFIELD.
Am I missing something? Or should we just start taking over, say, the Golden Gate Bridge and Yellowstone? Then Frensno can swoop in and use eminent domain to take them from us.
I don't think the City of L.A. can use eminent domain to take the land away from the City of Vernon, the City of Bakersfield, or anyone else outside the city limits.
Then again, I have the limited vision of someone who passed the bar, as opposed to our Mayor, who doesn't feel bound by technicalities like, say, the state constitution -- as evidenced by his attempt to take over the LAUSD.
You know, I like the mayor. I think he's been assertive about addressing a number of serious problems in the city that no mayor addressed before. However....
I do not understand how staying close with one group of insider friends is supposed to insure him or any city council member victory in future elections. Money may be the mother's milk of politics, but money alone is not enough to get the job done anymore; not since this pesky thing called the Internet become so popular.
It used to be that with enough $$ and friends, anyone could get elected and stay in office. Now we have bloggers and oh boy do they blog!
The editors at the L.A. Times and Daily News may or may not feel an issue is important, but the bloggers do.
And let's not even talk about local radio.'Cause they read the blogs and have assistants who are scouring the blogs.
It's a massively large city. It used to be so easy to hide. It's not so easy anymore. Let's hope the true public servants can rise to the level of transparency that this new,involuntary accountability demands.
The DWP would have had a hard time getting the property thru eminent domain. CMI and J. Swiller sold half the property to Vernon for a profit. If that means DWP now can't get the entire property thru eminent domain, tough luck for the DWP.
Why is that CMI's problem? They're a business.
This piece by Ron Kaye reminds me of what those of us who are from Fresno say about our hometown: "There is no there there." Nice try, though.
Walter Moore and Anonymous on September 16, 2009 11:45 AM,
Kern County (or Bakersfield City, whichever has jurisdiction) can force eminent domain and then lease the land to Vernon City, and/or the DWP, or else whoever for their windfarm... this is just one possible scenario.
Ah, let me see. I have several millions to invest, but I don't know where my money will get the best returns. I happen to be friends with the Mayor, whom I advise to go green through wind power. He agrees to promote that, but where will we put those turbines. Don't worry, there are plenty of places in the desert where they can be installed. Mayor, go ahead win the next big seat as the greenest Mayor, and I'll take care of the rest.
To say these were all innocent dealings is crap. Can the Mayor tell me what the next big thing is on his agenda, so I can make a killing on a deal. Or maybe I'll advise him that the Palmdale airport will be the biggest hub in California, and while he promotes it as more environmentally sound than LAX, I'll buy all the land around it. Hey, just a business deal.
Maybe this comes from a statement a while back from Nahai. He said that we needed investors to invest in the solar infrastructure - buy the bonds because the City could not apply for the tax rebates.
You could have private investors buying the land to qualify for rebates for wind as well.
Maybe we can ask these big questions at the DWP meeting.
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