Discovery motions will name informants, witnesses in alleged extortion of California State Athletic Commission
By Zach Arnold | August 8, 2014
There was a media circus Thursday afternoon in San Francisco at the District Court with a flood of status conference hearings involving California state senator Leland Yee, Chinatown figure Raymond “Shrimp Boy” Chow, Yee’s fundraising consultant Keith Jackson, and about 25 other individuals who were named in a superseding Federal indictment relating to all sorts of allegations from extortion to transferring ballistic missiles. Not exactly your garden variety criminal case.
Despite a gag order being enforced on both the prosecution & defense teams, there was quite a bit of procedural news that came out of Thursday’s court sessions. First, prosecutors are confident that many of the defendants will agree to plea deals and turn State’s evidence against the biggest fish in the case. The LA Times notes that there will be several trials involving the defendants rather than one large circus.
“Breyer concurred Thursday that the case must be split but postponed the decision until after all evidence is turned over and sensitive issues involving the wiretaps and identities of informants and agents are resolved.”
Let the discovery motions begin.
There will be a court hearing on Monday discussing wiretap evidence and it is expected that this evidence will be turned over to defense lawyers by the end of the month. The next court date after Monday’s meeting is expected to happen on November 12th, 2014.
There’s also a twist in the case: one of the FBI’s undercover agents was yanked from the Federal investigation due to allegations of $ misconduct. You don’t say.
Given Yee’s high-profile name and the interest in the case, there’s a pretty strong possibility that we will find out soon who exactly the Feds claim was targeted for extortion. Everyone wants to know who the Feds claim Yee & his fundraiser Keith Jackson were extorting in regards to an NFL team owner and individuals who wanted to keep the California State Athletic Commission alive.
Until this information is released via the courts, no proclamations can be made as to which individuals were allegedly extorted, who may be unindicted co-conspirators, and who may have been working for the Feds as informants. It would be reckless to make declarations right now when we don’t know all the facts of the case.
Given the fact that nobody on the outside-looking-in knows who was exactly targeted, there is only so much investigating you can do. However, the motive in the Federal indictment is very clear: money. We have been scouring through lobbyist disclosure records, political contribution records, and publicly-listed business relationships to try to figure out why Leland Yee & Keith Jackson allegedly thought they could score cash & connections from individuals who wanted to keep the Athletic Commission alive.
And this led us to carefully re-watch the video of a state senate committee meeting from April 29th, 2013 regarding SB309 — the bill that would extend the life of the Athletic Commission by two years. And given the claims made in the superseding Federal indictment, what we watched on video has raised some new & very intriguing questions.
Image from California Channel video of April 29th, 2013 state senate hearing
At the April 29th, 2013 state senate meeting regarding SB309 and whether or not the bill should be passed on to Appropriations, Yee curiously was the only senator who had any public comment. Noticeably, his entire focus was about CSAC Executive Officer Andy Foster.
“Let me just say that I participated in the hearing, the Joint Hearing on Sunset relative to this particular commission and I will tell you that the revelation out of the audit report and some of the responses from various parties, except Mr. Foster, were lacking to say the very, very least. It seems as if the Governor’s Office and all the stakeholders are pinning their hopes on Mr. Foster. If this is going to survive, he’s going to really have to step up to the plate.
“I did, in fact, attend one of those Mixed Martial Arts events and I will tell you, you know, this is not for the weak and I’m pretty weak. So, so… (laughs)… so we have got to do whatever we can to be supportive of Mr. Foster because I think as some of the testimony indicates, if we are going to attract the large venues, you know, we really have got to ensure the safety of the participants, the integrity of that entire process and I just say as one member, you know, I’ve turned my perspective around and also now [am backing] Mr. Foster [and] pinning my hopes on Mr. Foster in terms of making this a venue whereby the participants are protected, the public is protected, and the state of California’s protected. So thank you, thank you very much.”
Yee was focused simply on the money. His language here is strikingly similar to language that was used by UFC Chief Legal Officer Kirk Hendrick at that April 29th, 2013 meeting. It’s also the same language used by current CSAC Vice Chairman John Carvelli, who has his own “large event” subcommittee. Given the allegations in the superseding Federal indictment, it’s not a surprise that Yee focused on the money.
California State Athletic Commission Executive Officer Andy Foster
Andy Foster’s appearance at the April 29th, 2013 meeting was brief.
In the superseding Federal indictment, the court document alleges that Leland Yee talked with someone regarding SB309 on March 2nd, 2013 and that he “did a number” on that person, which allegedly led to Yee’s fundraiser Keith Jackson supposedly soliciting Individual A for lobbying cash in exchange for a Yee “yes” vote. A few days after that initial contact, the indictment claims that an Individual B arrived with A and was allegedly being solicited for donations to Yee’s campaign and to bring in others who would also supposedly contribute money to Yee.
Any sort of payment made directly to Keith Jackson Consultancy for lobbying would not be publicly disclosed unlike direct campaign contributions made to Leland Yee.
Questions: Is Andy Foster either Individual A or Individual B?
- If Andy Foster is either Individual A or B, who was the other person involved in the alleged discussions?
- Is one of the Individuals connected to Governor Jerry Brown’s office?
- Is one of the Individuals connected to the Department of Consumer Affairs?
The indictment alleges that Individual B was solicited for not only a campaign contribution but also fight promoter contacts who theoretically could have contributed money as well. Individual B was allegedly asked to reach out to someone with sway in California Democratic Party circles who could have helped out Yee’s Secretary of State 2014 campaign.
According to the Secretary of State’s web site, campaign contribution records show that Andy Foster did not contribute any money to Leland Yee’s Secretary of State campaign. However, CSAC Chairman John Frierson did contribute to Yee’s Secretary of State campaign.
Questions: If Andy Foster was either Individual A or B, did he contact the Governor’s Office or anyone at Consumer Affairs about the alleged solicitation?
- If Andy is not either Individual A or B, did A & B contact him or the Governor’s Office to alert higher-ups about the supposed solicitations for cash & connections?
While we do not know the answers to these important questions, we do know that Andy Foster came from Georgia and took the California job because he felt that he could come in and improve the combat sports landscape in the state. We also know that he was confident about his skills as a lobbyist and that he often worked outside of the Consumer Affairs framework so that he could head to the Capitol and talk to politicians directly. SB309, the legislative bill extending the life of the Athletic Commission into 2016, was priority number one when Andy became Executive Officer in November of 2012.
Andy Foster was at the April 29th, 2013 state senate hearing that Leland Yee attended. Also at that meeting for a brief cameo appearance was UFC Chief Legal Officer Kirk Hendrick.
Zuffa LLC Chief Legal Officer Kirk Hendrick
At that April 29th, 2013 senate meeting in Sacramento, Hendrick was very clear about UFC’s support of Andy Foster.
“We are in here of support of the athletic commission.
“We support what Mr. Foster has been doing since he came on board with the Athletic Commission and we strongly support having an athletic commission in this state so that you can continue to attract to the big boxing and big Mixed Martial Arts events.”
It is a fact that the only major fight promoter that lobbied California politicians for both the passage of SB309 and for the appointment of Andy Foster as the Executive Officer of the California State Athletic Commission was the UFC. The UFC stepped up to the plate.
And the Fertitta’s main man for lobbying in Sacramento is Tim Lynch of Platinum Advisors LLC. Platinum has both the UFC & Station Casinos as top clients. Given the Fertitta’s business interests in internet gambling, tribal gaming, and combat sport they have made sure to pony up significant cash in California political circles.
California Lobbyists, lobbyist firms, and the clients they represent have to file quarterly F635 disclosure forms with the Secretary of State. The forms disclose the amount spent lobbying, any gifts given to politicians, and what the purpose of the lobbying efforts were about.
Recent lobbying records from Platinum Advisors LLC, UFC’s lobbyist in Sacramento
Since the legalization of Mixed Martial Arts in California (2006), the UFC has aggressively donated money to politicians and has paid Platinum Advisors LLC a substantial amount for their lobbying efforts. A cursory look at filed Platinum Advisors LLC F635 lobbying disclosure forms gives good insight as to the amount of money spent and the reasons it was spent.
In years 2013 & 2014, Zuffa spent well over six-figures in cash in lobbying fees with Platinum Advisors. The F635 lobbying disclosure forms note that Zuffa lobbied for SB309 from April of 2013 through September of 2013. The superseding Federal indictment against Leland Yee alleges that he & Jackson extorted money from individuals wanting to keep CSAC alive starting in March of 2013 until the end of December of 2013.
In April of 2013, lobbying disclosure records revealed that Zuffa gifted Leland Yee two tickets for their April 20th, 2013 San Jose Arena event that aired on Fox. Nine days after that UFC event, Yee along with Andy Foster & Kirk Hendrick attended the state senate hearing in Sacramento that resulted in SB309 being passed onto Appropriations.
Right after SB309 was passed in the California Legislature in mid-September 2013, the author of the bill (state senator Ted Lieu) received a campaign contribution from Zuffa.
Three months after SB309 passed, Station Casinos made this campaign contribution:
Given the significant amount of cash that UFC & Platinum spent lobbying to get SB309 passed and to support Andy Foster politically, some serious questions need to be asked.
Questions: Why was UFC so heavily invested in Andy Foster politically?
- Why was UFC so heavily invested in keeping the Athletic Commission alive rather than allowing Consumer Affairs to sunset the commission and take regulatory activity in-house?
At the April 29th, 2013 state senate hearing, both UFC & Leland Yee expressed the importance of keeping Andy Foster as the Executive Officer of the California State Athletic Commission. Yee noted that the Governor’s Office was invested in Andy Foster as well. Leland Yee & Kirk Hendrick both focused their attention on attracting big fights to California.
Questions: Did Leland Yee talk with UFC officials at that April 20th, 2013 San Jose Arena event? If so, what was exactly discussed?
- What exactly changed Yee’s mind about Andy Foster after watching that event?
- Were the Feds wiretapping Yee’s communications to and from that UFC event?
- Did Leland Yee or Keith Jackson talk with Tim Lynch/Platinum Advisors LLC or UFC employees during the time that SB309 was ping-ponging back and forth between the state Senate & Assembly (April of 2013 ~ September of 2013)?
- If so, what was said in those conversations?
California State Athletic Commission Vice Chairman John Carvelli (image credit: Liberty Dental web site)
Approximately one week after SB309 was sent to Appropriations by Yee & other senators at the April 29th, 2013 meeting in Sacramento, Governor Jerry Brown’s office appointed dental HMO businessman John Carvelli to the Athletic Commission board. His company is called Liberty Dental. He is an associate for the Government Reglations Group consulting firm and deals with Medi-Cal consulting.
Screen shot of some of the various clients Platinum Advisors LLC has
Given the politicized nature of the dental industry in California, John Carvelli has had plenty of experience lobbying politicians on both sides of the aisle. Guess which lobbying firm Liberty Dental uses? Platinum Advisors LLC, the same firm that has both UFC & Station Casinos as clients.
Liberty Dental & Platinum Advisor lobbyist disclosure forms show that Carvelli’s company has spent nearly $400,000 in the last few years with Platinum to lobby the state Legislature over a variety of different bills & budgets.
Carvelli and Platinum Advisors have spent an extensive amount of time lobbying Governor Jerry Brown’s office on budgetary matters. Given the major budgetary challenges facing the California State Athletic Commission, you can see why Governor Jerry Brown thought that John Carvelli would be a logical choice as an appointment. Carvelli knows how Sacramento operates and has demonstrated his willingness to spend the cash to lobby politicians.
Carvelli’s big focus so far at the Athletic Commission has been attracting big fights to the state. His words often sound like they come from the same playbook both Leland Yee & Kirk Hendrick used at the April 29th, 2013 state senate meeting. Carvelli has repeatedly mentioned the idea of utilizing GO Biz (Governor Jerry Brown’s Office of Business & Economic Development) to increase business incentives in order to attract big arena events to California.
Questions: Given how much money John Carvelli has spent with Platinum Advisors LLC on lobbying and contributions to various political campaigns, has he ever met or talked with Leland Yee or Keith Jackson?
- How many times have Carvelli & Yee talked in the past?
- Would John Carvelli or Tim Lynch be comfortable enough picking up the phone and talking to Yee or Jackson about lobbying affairs in Sacramento?
When John Carvelli was appointed to the Athletic Commission in May of 2013, SB309 had not been passed by the Legislature. Eventually, SB309 was signed by the Governor in mid-September of 2013. There was a four month window between the time Carvelli was appointed by Governor Jerry Brown to CSAC to when the Governor signed SB309 to extend the life of the Athletic Commission for two years. Carvelli would obviously have a great interest in keeping the Athletic Commission alive since he had just been appointed.
Questions: If Andy Foster was approached by Leland Yee or Keith Jackson for solicitations of cash & connections in exchange for a vote on SB309, would he contact Tim Lynch or John Carvelli and give them a heads up? If so, what would their response have been?
In the short time that Carvelli has been on the Athletic Commission board, he created his own subcommittee on attracting large events and also found himself entangled in a “litigation sub committee” with Martha Shen-Urquidez. In addition, recent meeting minutes published on the Athletic Commission web site demonstrate Carvelli’s advice & influence regarding Athletic Commission budgetary matters. In the latest Fiscal Year, the Athletic Commission (on paper) broke even on revenues & expenditures.
The future of Andy Foster and the California State Athletic Commission
When the appointments of Chairman John Frierson, Dr. VanBuren Ross Lemons, and Dr. Christopher Giza expire at the end of 2014, John Carvelli will be in the pole position to take over as Chairman of the CSAC board. There will be four seats open for new appointments.
Question: Given the Federal indictment alleging extortion of individuals trying to keep the Athletic Commission alive, will Governor Jerry Brown’s office double-down and stack the Athletic Commission board with fresh appointees?
- Or will Consumer Affairs attempt to shut the Athletic Commission down in order to temporarily move regulatory matters in-house with no public transparency?
The next Athletic Commission meeting is on Monday, August 11th in Los Angeles. It is highly unlikely that we will see any public comment in regards to the Federal indictment against Leland Yee & Shrimp Boy.
Privately, however, who knows what is being said behind closed doors amongst athletic commission members and the lawyers at Consumer Affair.
Exit Questions: If Andy Foster is somehow named in the Federal probe, either as a target for extortion or in another capacity, will Consumer Affairs and the Athletic Commission board members rally around him?
- Or will the Athletic Commission board members see him as a political liability and cite Government Code Section 11126(a)(1) to hold a closed session to terminate his employment as Executive Officer?
- If DCA applies pressure on Andy to resign or the Athletic Commission decides to have a vote on terminating his role as Executive Officer, will Andy put up a fight to save his job or will he walk away quietly?