Mayor of Pico Rivera and consultant charged in scheme to launder campaign contributions

The mayor of Pico Rivera and a consultant have been charged with illegally reimbursing donors who funded the campaign of a candidate for a Montebello school board seat, according to court documents made public Tuesday.

Gustavo Vidal Camacho, mayor of Pico Rivera and a city councilman since 2009, and Luis Diaz Rojas, chief executive of a consulting company for school construction projects, surrendered to authorities and made their initial appearances in Los Angeles Superior Court on Tuesday, said Greg Risling, a spokesman for the Los Angeles County district attorney.

Both men are charged in a conspiracy to conceal the source of campaign contributions to Joanna Flores, a board member of the Montebello Unified School District.

Between December 2015 and April 2016, Camacho and Rojas directed family members, employees of Rojas’ company and an unidentified “political ally” to contribute to Flores’ campaign, whom Rojas then reimbursed, Deputy Dist. Atty. Alan Yochelson alleged in a complaint. Flores was not charged.

Camacho and Rojas will be arraigned in October, at which time they will enter a plea, Risling said.

Camacho said he was “completely surprised” by the charges. He and his lawyer, he said in a statement, were still “trying to get our arms around the facts and the allegations in order to respond.” He vowed to not let the charges “distract” from his duties as mayor.

Rojas too said he was surprised at the case, but declined to address it until he and his lawyer “dissect and better understand the allegations.” Three days after this article was published, Rojas said in a letter to The Times: “As a well-respected business owner with a stellar reputation for overseeing and executing quality bond program and construction management work, I vehemently dispute the assertions.”

Rojas said the district attorney’s case “appears to mimic” an earlier investigation by the Fair Political Practices Commission with which he and Camacho, the Pico Rivera mayor, “thoroughly, fully and openly cooperated.”

Flores didn’t respond to messages seeking comment.

Rojas’ company, Del Terra Construction, figured prominently in a whistleblower suit filed by two former executives of the Montebello Unified School District, Susanna Contreras Smith and Cleve Pell. A Los Angeles County jury awarded the two $3.7 million in August 2018.

Smith, the district’s former superintendent, and Pell, its erstwhile chief financial officer, alleged that Rojas’ company was awarded multimillion dollar contracts by his former employee, Ruben Rojas, who left Del Terra and became the school district’s chief business officer. Three days after this article was published, Luis Rojas disputed the account in the whistleblower suit and said Ruben Rojas never worked for his company.

In February 2015, the Montebello school district signed a $2-million contract with Evergreen Energy Solutions, of which Luis Rojas is president, and a Georgia company to install LED lighting in Bell Gardens High School, Montebello Intermediate School and Montebello Gardens Elementary School. A copy of the contract was filed in court, appended to a lawsuit the school district filed against Rojas’ company.

Six months later, according to the lawsuit, the district learned that workers had disturbed asbestos fibers in several buildings, then spread the contaminants to other schools. The district was forced to spend more than $3.5 million in a “massive cleanup,” the lawsuit said. In his post-publication letter to The Times, Rojas said district employees, not his company, were responsible for the asbestos contamination.

On Aug. 18, 2016, the same day that attorneys representing the district filed suit against Rojas’ company, the school board — including Flores, the board member to whom, in county prosecutors’ telling, Rojas’ laundered campaign contributions flowed — voted unanimously to award his company, Del Terra, a lucrative management contract, school board meeting minutes show.

Del Terra’s contract, according to the meeting minutes, was “not to exceed” 4.5% of all funds raised by a series of bond measures, including one that brought in $300 million. Lawyers for the fired whistleblowers valued Del Terra’s contract at $13.5 million, at least.

After this article was published, Rojas said the school district’s attorneys sued his company “without the knowledge or approval” of the school board. “Once the school board realized their own employees were culpable for exposing innocent workers to asbestos, the district dropped their lawsuit,” he said.

State Auditor Elaine Howle, whose office examined the district’s finances and published its findings in November 2017, said the district “failed to ensure that its employees did not have conflicts of interest when they approved expenditures and contracts related to the bond funds.”