SoCal officials are focus of federal probe of pot licensing – Los Angeles Times

A federal grand jury has issued subpoenas seeking information about cash and other payments to public officials and cannabis consultants as part of a criminal investigation into pot licensing in Baldwin Park and nearby cities, The Times has learned.

Federal authorities, including agents from the FBI and Internal Revenue Service, have been interviewing witnesses and are seeking a wide range of records regarding Baldwin Park city officials who approved cannabis licenses and consultants who helped businesses obtain the permits, according to interviews and a copy of a grand jury subpoena reviewed by The Times.

Agents are also probing connections between Baldwin Park businesses and consultants who have obtained or sought cannabis licenses in other cities, including Montebello and El Monte, according to the subpoena and interviews.

The subpoenas follow a series of scandals in Baldwin Park, a 6.8-square-mile city 23 miles east of Los Angeles, in the heart of the San Gabriel Valley.

Late last year, The Times reported that FBI agents had served search warrants at the city attorney’s office and the homes of two officials in other cities as part of an investigation into cannabis licensing and allegations that Baldwin Park officials had received illegal payments from businesses seeking permits.

A former Baldwin Park City Council member, who was an early champion of legalizing cannabis, pleaded guilty in a separate federal case after admitting to taking tens of thousands of dollars in bribes from a police officer to vote for a police union contract, according to federal court records that were unsealed earlier this year. He agreed to cooperate with authorities in ongoing public corruption investigations.

And a state audit last year found that the city had been poorly managed and flagged deficiencies in its accounting practices. The audit also raised concerns about wasteful spending, including an engineering project that was never finished but cost taxpayers more than $500,000.

The commercial cannabis licensing program, which was approved by the City Council in 2017, has been mired in allegations of bribery, conflict of interest and bias.

In a sworn declaration filed last year in an unrelated lawsuit, former Baldwin Park Police Lt. Christopher Kuberry, who was in charge of inspecting cannabis businesses, said three operators had complained to him about questionable practices in the city and “having to pay $250,000 in a brown paper bag to city officials.”

The scope of the subpoenas includes requests for records of meetings, emails and payments to any city cannabis consultants and Baldwin Park council members, as well as any records connected to cannabis consultants or cannabis licensing in cities outside of Baldwin Park.

FBI agents have asked about cannabis consultants in Baldwin Park who assisted applicants in El Monte and Montebello, according to sources interviewed by federal agents. The sources spoke on the condition of anonymity because they did not have permission to publicly discuss the investigation.

A spokesman for the U.S. attorney’s office declined to comment. An FBI spokeswoman declined to comment on the subpoenas but said the investigation is ongoing.

The grand jury subpoena reviewed by The Times also seeks records regarding Baldwin Park City Atty. Robert Tafoya. In October 2020, FBI agents searched Tafoya’s downtown Los Angeles office, as well as the homes of Isaac Galvan, a member of the Compton City Council, and Gabriel Chavez, who was a San Bernardino County planning commissioner.

Chavez declined to comment; Galvan could not be reached for comment.

Mark Werksman, an attorney who represents Tafoya, said he was aware that a federal grand jury had issued subpoenas, but his client had not been contacted by authorities.

“He’s a hard-working, honest lawyer for the city who never did anything illegal or broke the law,” Werksman said. (Werksman has represented Times journalists in unrelated matters.)

Baldwin Park City Attorney Robert Tafoya

Baldwin Park City Atty. Robert Tafoya.

(Glenn Koenig / Los Angeles Times)

Tayofa began working for Baldwin Park under a contract in 2013 and has had a controversial record. In 2017, he drafted a contract stating that the police chief could be fired only if he committed a felony and preventing the chief from receiving annual evaluations by city leaders.

Tafoya drafted and negotiated cannabis development agreements for the city. That resulted in controversy when one company, Rukli Inc., became the sole distributor for Baldwin Park, requiring other cultivators and manufacturers to use Rukli to transport their products.

Two cannabis companies filed lawsuits alleging that the distribution agreement created a monopoly. The city eventually renegotiated with Rukli by having the firm give up its sole distribution rights in exchange for a free permit for cultivation and manufacturing. The city also waived $300,000 in fees owed by the company.

Baldwin Park Mayor Emmanuel Estrada said in a phone interview he was concerned about the agreements Tafoya struck with cannabis businesses. Some were charged city fees, while others were not, he said, and some were required to pay upfront, while others were allowed to pay once they were up and running.

Estrada said he was unaware of a federal grand jury investigating Baldwin Park’s cannabis licensing and had not heard of any subpoenas being served at City Hall. Tafoya, he said, is no longer dealing with cannabis matters, and the city has hired a new attorney to take over the cannabis licensing program.

Last year, Tafoya hired Anthony Willoughby II to serve as a contracted attorney for Baldwin Park, a role that included handling cannabis-related matters. His father, Anthony Willoughby, is also an attorney and initially represented Galvan after the FBI search warrant was served.

Local activists and an attorney representing cannabis businesses have questioned the younger Willoughby’s hiring.

In 2018, Willoughby II was vice president of Tier 1 Consulting & Advocacy and negotiated a cannabis cultivation agreement with Baldwin Park, city records show.

In an email response to questions from The Times, Willoughby II said his father had owned Tier 1 but sold it. Willoughby II said he was an employee with no ownership interest.

“There is no conflict when a person that was formerly employed by a private business within the city takes a job working for the city,” Willoughby II said, adding that the matter was a “nonissue.”

One of the new Tier 1 owners, David Ju, told The Times he and his partner dealt only with Willoughby II when they purchased the cannabis development agreement in April 2019.

Willoughby II said he was unaware of a federal grand jury and had not received a subpoena or been contacted by federal authorities.

One of Baldwin Park’s early supporters of legalizing cannabis was former Council Member Ricardo Pacheco.

In June 2020, Pacheco pleaded guilty to accepting $37,900 in bribes from a Baldwin Park police officer who was a member of the officers union but was working undercover for the FBI.

The bribes, paid in 2018, included an envelope with $20,000 in cash that the officer gave Pacheco at a Baldwin Park coffee shop, according to a plea agreement with federal prosecutors. The remaining $17,900 was distributed through checks made out to Pacheco’s church and to “sham political committees” under the names of other people but controlled by Pacheco, federal authorities said in a news release announcing the guilty plea.

The heavily redacted plea agreement makes reference to $219,755 in illegal proceeds that Pacheco agreed to forfeit — including more than $83,000 in cash found inside his home and buried in his backyard. The court records did not specify how he obtained the money. As part of his plea agreement, he agreed to cooperate with federal authorities and provide any “tangible evidence” to investigators.

Pacheco, who resigned from the City Council, agreed to cooperate with federal authorities 10 months before his plea agreement was made public, court records show. He is awaiting sentencing.

Pacheco declined to comment through his wife, who confirmed that he is in contact with federal authorities.