By Gustavo Arellano
By R. Scott Moxley
By Alfonso Delgado
By Courtney Hamilton
By Joel Beers
By Peter Maguire
By Charles Lam
By Charles Lam
Following a Santa Ana City Council brouhaha in March, when Councilmanstood accused of body checking rival Councilman Brett Franklin, Moreno denied everything and chuckled confidently to the Weekly: "If Mr. Franklin wants to continue this, let's go on Judge Judy." Moreno now probably wishes he were making a simple appearance before the officially toothless daytime TV judge and author of Don't Pee on My Leg and Tell Me It's Raining. Instead, the proselytizing, often-confrontational politician--who ranks as one of Orange County's youngest elected officials--faces an Aug. 31 federal arraignment to answer far-more-serious charges.
This week, a lengthy FBI sting operation into Orange County's political corruption snared Moreno, 31; fellow councilman and city probation officer Tony Espinoza, 30; and their associates: unsuccessful 1996 City Council candidates Hector Olivares, a 31-year-old parking lot manager, and minister Roman Palacios, 37. The men deny wrongdoing.
Officials with the local U.S. attorney's office, the FBI and the IRS claim evidence gathered during a secret two-year investigation convinced a federal grand jury in Los Angeles to issue a detailed 24-count indictment on Aug. 25. Moreno and his allies are charged in a case that centers on bribery, extortion, perjury, mail fraud, conspiracy, money laundering, and a host of "knowing and willful" election violations. At the heart of the federal probe were alleged attempts in 1996 to extort more than $46,000 from two Santa Ana businessmen who had matters pending before the City Council. Convictions could bring hefty fines and federal prison sentences of up to 20 years.
The indictment specifically alleges that the men extorted $31,000 in campaign contributions from a Santa Ana gas-station owner who wanted a beer-and-wine license from the city. Unbeknownst to the politicians, the FBI had been tipped. FBI agents say they supplied most of the bribe and then tracked the funds as they were illegally funneled through a series of campaign committees and ultimately used for mailers like one titled, "Ted Moreno: A Family Man With Family Values."
The indictment also alleges Moreno demanded $15,000 and received a $9,820 cash bribe (a portion of the money was delivered in South African Krugerrands) from a property owner who wanted the city to grant him more favorable zoning for a 16-acre proposed housing development on North Bristol Street. According to the FBI, Moreno kept an envelope containing $2,000 in cash taped under his bedroom dresser.
If the allegations are proven, longtime government watchdog Shirley Grindle said, "It's the most brazen display of extortion in Orange County I've ever seen. It tells you something that even the lobbyists were complaining about what was happening in Santa Ana. Power corrupts."
Hours after his indictment, an uncharacteristically soft-spoken Moreno sounded exhausted. "I'm fine," he told the Weekly in a late-night telephone interview. "I've got nothing to hide from, [but] this is not how I want to be spending my election campaign. We're not the big, mean people they describe us as. It's in God's hands. I believe in miracles, and miracles do occur."
The two-term Democratic councilman, who doubles as a real-estate agent at Century 21's Irvine office and occasionally spouts religious-fundamentalist rhetoric, said he is the innocent victim of election-year sabotage by political rivals who, he claims, are "squeezing" campaign contributions from businesses.
Asked if he plans to drop his mayoral campaign against incumbent Miguel Pulido, Moreno regained--at least temporarily--his near-legendary verve. "Oh, no. Heck no. I plan to win in November," he said. "Just because they are accusing me doesn't mean I'm guilty."
Law-enforcement officials appear equally confident of their case. According to FBI Assistant Director in Charge Timothy McNally, Moreno spearheaded a 1996 conspiracy with Espinoza, Olivares and Palacios to take over the Santa Ana City Council. As a unified voting bloc able to dominate the seven-member council, the four men allegedly planned to demand bribes from businesses seeking liquor permits, zoning changes and city contracts.
News of the indictment wasn't exactly shocking. Rumors of bribery, influence peddling and strong-arm fund-raising tactics have circulated in Santa Ana for years. In 1995, the LA Times reported that the Orange County district attorney's office was investigating allegations that Moreno was shaking down potential campaign contributors. The story--and the investigation--never went anywhere.
"There were some people who wouldn't talk to us," says Deputy District Attorney Guy Ormes, who supervised the case.
In March, the Weekly asked Moreno about rumors that he'd bullied and intimidated the owners of a carpet store into giving him a sweetheart deal while they had matters before the council. Moreno denied it. "I haven't heard that one yet," he said jovially. "My house has hardwood floors." But when reminded that he also owns a condo, Moreno replied smoothly, "Oh. Actually, I thought I overpaid."
Robert Hoffman, who headed redevelopment and real estate for the city at the time, claims the carpet-store owners called him. He says they feared Moreno might block the $10,000 the city owed them. Hoffman says he wrote a letter to the DA, detailing the call.
Hoffman claims he also received calls from people who claimed Moreno used his political office to direct clients to his real-estate business. In one case, Hoffman says, residents alleged that Moreno attempted to gain listings by suggesting he was the official real-estate agent for a city street-widening project.
Moreno flatly denied representing himself as an agent of the city on those calls. "That would be illegal," he said. "It would be a conflict of interest. I can't offer. I can't represent. No. Never."
Nor were Moreno's problems limited to residents and businesspeople. His clashes with City Council colleagues are legendary. Once, a councilman was near tears when Moreno ditched protocol and made a ceremonial motion himself, rather than letting the councilman who'd done the work make the motion of record. Asked whether he didn't think that was discourteous, Moreno giggled. "He was practically crying," Moreno said, sounding satisfied.
In one meeting, Moreno lectured the city clerk for seven minutes (even asking her like a stern, hectoring mom, "What do you have to say for yourself?"); informed Pulido he had reported him to the DA and the Fair Political Practices Commission; lambasted "the media"; and campaigned blatantly from the dais, saying: "Our current mayor blows with the wind. I won't be a weak mayor!"
Sadly, council insiders note that Moreno and Espinoza seem to have had a falling-out. For the past couple of months--about the time that Moreno used $3,000 in campaign funds to hire a defense attorney--they haven't talked to each other at meetings or even sat next to each other at informal council study sessions. Moreno says they avoid each other for appearance's sake, so people won't think they're conspiring.
"We will always be friends--for the rest of our lives," he said. "We're just being tested at this point in our relationship."
The grand jury did not indict any of the contributors to Moreno's political campaigns. Among the most frequent contributors were the employees of Riverside-based Mercer Construction. Mercer has done business in Santa Ana at least twice in the past several years: they built shopping centers at 17th Street and Bristol and on Tustin Boulevard.
Five Mercer secretaries, account executives and other low-level administrative assistants--none of whom live in Orange County--gave Moreno and his allies several hundred dollars each, several times during the 1996 election cycle. Such contributions are legal so long as they are not shielding the true source of the contribution.
Most of Mercer's employees identified in the campaign reports as donors aren't listed in the phone book. But Robert Erickson, who is listed as giving Moreno and Espinoza $249 each in 1996--even though he lives an hour away in Murrieta--confirmed that he worked for Mercer. However, when a Weekly reporter mentioned the campaign-finance indictments as a way to warming up to the question, "So what's a Murrieta-livin' guy like you doing giving to a Santa Ana city councilman like Ted Moreno?" Erickson interjected, "Oh, no. You've got the wrooong person." Then he hung up.
Among Moreno's supporters there is speculation that the indictments are payback for the councilman's outspoken opposition to what he saw as overly generous pay for Santa Ana's top police administrators. According to one prominent Santa Ana political insider, "Word on the street since 1997 has been that the police were furious with Ted and that he had better watch his back."