Capitol Alert

The latest on California politics and government

Calderons.JPGSen. Ron Calderon and his brother, former Assemblyman Tom Calderon, have been indicted by a federal grand jury on multiple criminal charges, including money laundering.

Ron Calderon faces 24 charges including bribery, money laundering and tax fraud, which carry a maximum sentence of 400 years in prison, U.S Attorney André Birotte Jr. said during a press conference Friday in Los Angeles. Calderon agreed to surrender to authorities on Monday, Birotte said.

Tom Calderon faces seven counts of money laundering and is scheduled to be arraigned Friday afternoon.

Michael Drobot, the former CEO of Pacific Hospital of Long Beach, has made a plea deal with authorities and admitted paying bribes to Ron Calderon, Birotte said. He is pleading guilty to two counts that carry a maximum sentence of 10 years.

Ron Calderon, a moderate Democrat, is known for fancy out-of-state political fundraisers, carrying legislation that benefits specific industries and being one of three brothers who treat Capitol politics as a family business. He has served in the California Legislature since he was elected to the Assembly in 2002, when he replaced his brother Tom Calderon in the seat representing several blue-collar communities in southeast Los Angeles County. Their brother Charles Calderon took the seat when Ron Calderon moved to the Senate in 2006. Charles Calderon's son Ian Calderon now holds the seat.

Ron Calderon has denied wrongdoing. His attorney did not return calls from The Bee on Friday.

"More than robbing us of money, corruption robs us of trust in government," FBI assistant director Bill Lewis said.

A spokesman for Senate President Pro Tem Darrell Steinberg said the Democratic caucus is discussing the indictment Friday afternoon. After an FBI affidavit outlining many of the allegations against Calderon was disclosed by Al-Jazeera America in October, Steinberg stripped Calderon of all committee assignments, but he has continued to attend floor sessions and cast votes.

Federal authorities allege that Ron Calderon accepted nearly $100,000 in bribes from Drobot and an undercover FBI agent posing as a film studio owner, and that his brother laundered money through a nonprofit group called Californians for Diversity.

"Ron Calderon, we allege, took the bribes in return for official acts, such as supporting legislation that would be favorable to those who paid him bribes, and opposing legislation that that would be harmful to him," Birotte said.

"The indictment further alleges that Calderon attempted to convince other officials to do the same."

The indictment does not name any other members of the California Legislature, but describes Calderon's attempts to influence colleagues labeled Senators A, B and C.

It lays out two major policy areas that authorities allege Calderon tried to influence in exchange for bribes: tax breaks for film productions and the rate at which hospitals that treat workers compensation patients are reimbursed for performing spinal surgery.

An undercover agent posing as a film studio owner asked Calderon to change California's tax credit program for filmmakers so that smaller productions would qualify for the credit. Under a bill Calderon carried in 2009 and an extension passed in 2012, productions that cost at least $1 million and are shot in California can enter a lottery to get a tax break. Authorities allege that Calderon accepted bribes from the undercover agent to lower the threshold to $750,000 -- an effort that was ultimately unsuccessful in the Legislature.

"This legislation would have been a financial boon to the small independent studios and the indictment specifically alleges that Ron Calderon agreed to support this new film tax credit legislation in exchange for his daughter being paid $3,000 a month for a job that he knew she would not perform," Birotte said.

Federal authorities' other main bribery allegation concerns Calderon's relationship with Drobot, the former hospital executive. The facility he used to run -- Pacific Hospital of Long Beach -- specializes in performing surgery on patients who are being treated through California's workers compensation system. How much the state pays such hospitals for inserting medical hardware during spinal surgery became a source of debate among lawmakers in 2012. The indictment alleges that Drobot paid Calderon -- by giving his son summer jobs -- to try to steer the legislation in ways that would help his business.

"Mr. Drobot has acknowledge and accepts responsibility for his actions," a statement from his attorney, Janet Levine, says. "He is providing information to assist the government in its expanding investigations."

Authorities allege that Drobot's business engaged in a massive ring of fraud by paying kickbacks to doctors and chiropractors who referred patients to him for spinal fusion surgery - a lucrative stream of business because the state paid double for spinal implants. Briotte said Drobot's business billed to the state's workers compensation system for $500 million over five years.

Eric Weirich, deputy commissioner of the state Department of Insurance, described Drobot's alleged scheme as the largest case of insurance fraud in California history.

The practice was exposed by the Wall Street Journal in 2012 and last year The Sacramento Bee examined the history of state legislation affecting spinal fusion surgery for injured workers.

After leaving office, Tom Calderon went into business as a consultant who helps clients navigate state government, but did not register as a lobbyist. His clients included Drobot's Pacific Hospital of Long Beach as well as the Central Basin Municipal Water District.

Tom Calderon also is president of a nonprofit organization called Californians for Diversity, which the indictment describes as a vehicle he used to launder money for personal use. The Yes We Can Political Action Committee, an independent fundraising committee that has had ties with the Legislature's Latino Caucus, made a $25,000 contribution to Californians for Diversity early last year. The PAC closed down on Dec. 31 of last year.

Ron Calderon has accepted more gifts from lobbying groups than any other state lawmaker, a Bee review of lobbyist disclosure reports shows. Since 2000, he has accepted roughly $40,000 worth of gifts, more than double the amount given to any other legislator during that period. Calderon's gifts included many dinners and golf outings, as well as airfare to Hawaii and tickets to see the Lakers, Kings and Britney Spears.

Calderon has carried many bills to benefit businesses over the years. Among them: legislation to permit fireworks to be sold during Christmas week, allow shoes made of kangaroo skin to be sold in California, expand the kind of betting allowed on horse races and increase the amount of money payday lenders can loan.

But he has also carried bills backed by more liberal interests, including government watchdog group Common Cause and the animal advocates Humane Society of the United States. In 2011, Calderon carried legislation to increase fines for cockfighting participants and spectators. In 2008, he authored the bill that now allows voters to register online.

PHOTO: California State Senator Ron Calderon, right, comforts his brother former state assemblyman Tom Calderon at a memorial service for Tom's wife Marcella Calderon at the Montebello Applied Technology Center High School in Montebello on Jan. 14, 2012. Genaro Molina/ Los Angeles Times)


RELATED STORIES

FBI raids offices of state Sen. Ron Calderon

Sen. Ron Calderon no stranger to political fire

Legislature veteran Tom Calderon turns to business consulting

Graphic: Calderon family tree

Calderon family wields political clout

FBI searched two businesses with ties to Calderons in April

Sen. De Leon to testify as California Capitol probe expands

California lawmakers tussled over payments for spinal implants

Subpoena spotlights Southern California water district's projects with Calderon ties

California state Sen. Ron Calderon accepted $88,000 in bribes, FBI affidavit alleges

Read the FBI affidavit in the Ron Calderon investigation

Undercover FBI agent created elaborate persona in Calderon sting

Who is Michael Drobot? Leaked affidavit touches on embattled donor

FBI Capitol sting shines light on Latino caucus

Ron Calderon says FBI asked him to secretly record conversations with Steinberg, de León

Timeline: Key events in the FBI's Calderon family investigation



FOLLOW US ON FACEBOOK

More Capitol Alert

Capitol Alert on Twitter

FOLLOW US | Get more from sacbee.com | Follow us on Twitter | Become a fan on Facebook | Watch Bee news, lifestyle videos | View our mobile versions | e-edition: Print edition online | What our bloggers are saying

Popular Categories

Categories


February 2014

Sun Mon Tue Wed Thu Fri Sat
            1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28  

Monthly Archives


Latest California Clips