Envelopes stuffed with cash: South El Monte mayor admits to taking bribes from a city contractor

The mayor of South El Monte has agreed to plead guilty to a federal corruption charge, admitting that he accepted at least $45,000 in bribes from a city contractor in a scheme so entrenched that he would call if his payments were late.

Luis Aguinaga, 48, admitted that starting in 2005, he regularly accepted bribes of at least $500, with cash payments left in a bathroom in City Hall or in the passenger pocket of a car, according to the U.S. attorney’s office.

The contractor handed over the bundles of cash about twice a month until 2012, when the FBI caught Aguinaga accepting money at a South El Monte hotel bathroom.

The prosecution of Aguinaga, who was elected to the City Council in 2003 and also serves on the board of a local water agency, suggested deeper graft in the San Gabriel Valley city, with the mayor acknowledging he forwarded payments to another public official.

Neither the contractor nor the other official were identified.

“Mr. Aguinaga abdicated his civic duty when he made decisions for the city based on bribes he demanded, instead of for the good of the people he was elected to serve,” said Deirdre Fike, the assistant director in charge of the FBI’s field office in Los Angeles. “The FBI will not tolerate corruption by city officials, nor should the residents of South El Monte.”

Reached by telephone Thursday evening, Aguinaga said he had “no comment” on the plea agreement, which he signed Monday. Aguinaga referred questions to his attorney, who did not respond to a request for comment.

The bribery scheme involved an unidentified vendor who provided construction and engineering services to the city, prosecutors said. If the contractor did not quickly hand over the cash after being paid by the city, Aguinaga would follow up, federal prosecutors said. The payments later increased to $1,000.

At times, the mayor accepted larger sums, but he would split the payoff with another public official, according to court papers. On July 12, 2012, Aguinaga received an envelope with $2,000; he pocketed about half for himself and gave the rest of the cash to the unidentified public official, prosecutors said.

Federal agents monitored at least one rendezvous: a September 2012 meeting at the Ramada Inn in South El Monte, according to the plea agreement.

At the meeting, Aguinaga “was nervous” because of a federal crackdown on graft in nearby Cudahy.

Officials in Cudahy had been charged earlier that year with accepting bribes from a man who wanted to open a medical marijuana dispensary, one of many corruption probes that had ensnared officials in the small blue-collar cities in southeast Los Angeles County.

At the Ramada next to the Pomona Freeway, Aguinaga typed out a message of caution on his phone: “Don’t talk” or “Don’t say anything,” according to the plea agreement.

Once inside a bathroom at the hotel, the contractor put an envelope with $2,000 cash near the sink. Aguinaga helped himself to at least $1,000, according to court papers. The rest of the money went to the other city official, according to the plea agreement.

“This long-running corruption scheme compromised the effective governance of South El Monte,” U.S. Atty. Eileen M. Decker said.

Aguinaga, who is scheduled to appear in federal court on Aug. 10 for an arraignment, remains free. The count to which he agreed to enter a guilty plea carries a maximum penalty of 10 years in federal prison.

In the city of 20,000 people, the news of the mayor’s misconduct stunned residents, Mayor Pro Tem Gloria Olmos said. She called on Aguinaga to step down, saying, “Any party that is guilty should resign.

“There’s a lot of angry people,” Olmos said. “They’re hurt, betrayed.”

An outside auditor recently criticized South El Monte for its ineffective oversight of two contractors that have worked with the city for more than a decade. None of the two vendors’ contracts were subjected to a competitive bidding process, and three contracts were signed off on by the city manager without approval by the City Council, according to the report by Los Angeles-based Singer Lewak LLP.

Some contracts were tweaked without approval of the council, increasing the revenue for a vendor by tens of thousands of dollars. One contractor admitted to submitting fraudulent billing reports in order to maximize the money allowed by its agreement, according to the report.

Olmos, who has served on the council for less than a year, said the city is adopting policies to prevent future accounting issues.

“Our city is getting cleaned up, and we’ll move forward,” she said. “The leadership will not all fall.”

matt.hamilton@latimes.com

For more breaking Southern California news, follow me on Twitter: @MattHjourno

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UPDATES:

9:33 p.m.: This article was updated with additional details and comments from the Mayor Pro Tem of South El Monte.

6:30 p.m.: This article was updated with Aguinaga declining to comment on his case.

This article was originally published at 5:30 p.m.