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Breaking News: Officials Cancel China Trip, React to Allegations of Impropriety

Arcadia Mayor Wuo- Photo by Terry Miller

Arcadia Mayor Wuo- Photo by Terry Miller

Arcadia City Council Withdraws Plan for Controversial China & Taiwan ROC Trip
Divisive Donations from Real Estate Interests Cited

By Joe Taglieri

Arcadia City Council members and staff officials will not be going to China and Taiwan next month, Mayor John Wuo told Arcadia Weekly in an interview Wednesday.

“In light of what’s happening in our community and reports in [Arcadia Weekly] and the Pasadena Star-News, I feel like we need to bring the community together rather than have these issues be a concern of the residents,” Wuo said. “We don’t have to go to China, we all thought it was a good idea but evidently the community doesn’t feel that way, and we respect that. So I think it’s best for our residents and for our city that we cancel the trip.”
On Sunday the Pasadena daily published a story that featured government transparency advocates who questioned the ethics of the city’s acceptance of three $10,000 donations from Chinese donors.

Officials said the $30,000 — which Wuo and City Manager Dominic Lazzaretto said would be returned to the donors — would be used to cover travel expenses for a delegation that would have Mayor John Wuo and his wife, Council Member Sho Tay and his wife, Council Member Tom Beck, City Manager Dominic Lazzaretto, City Attorney Stephen Deitsch, Fire Chief Kurt Norwood, Public Works Services Director Tom Tait, Recreation and Community Services Director Sara Somogyi as well as the mayor’s brother and sister-in-law George and Sandy Wuo.

One of the donors is a prolific real estate developer in Arcadia, which aroused suspicion among a significant number of Arcadia residents.
In an interview Tuesday, Jie Li said his company Perfect Brothers Development Corp. — reportedly based in Rowland Heights though documents from Arcadia’s planning department indicate Li works out of the office of Treeline Realty in Temple City — has done about 30 high-priced residential projects in Arcadia over the last four years.

After announcing officials’ tentative plans for the trip to the Far East at the last public council meeting Feb. 17, Lazzaretto said officials were unaware “of any past business with the city or any proposed business with the city for Perfect Brothers.”

While Perfect Brothers may not appear regularly on city documents pertaining to proposed real estate developments, numerous limited liability corporations tied to Li are a common sight at Arcadia’s Community Development Department.

Li explained that because each individual development project usually has a unique team of investors, he creates an LLC in the interest of sound accounting.”I have a lot of investors,” he said. “Each property is different investors.”

Lazzaretto noted that this is common in the real estate business: “You may have a person who’s the president of a corporation, but they tend to do funding from various sources for every project. So they set up a separate company so they can keep track of who the investors are in a particular project. When it comes time for tax season, when it comes time for disbursing the revenues at the end of a project they can keep all the columns straight.”

Wuo said he and Li have been friends for a long time, and that he told the developer about plans for the city’s China trip.

“We have dinner once in a while and I told him that we are planning a trip to China, and he said ‘Well, let me know if I can help.’ So I said ‘Yeah, sure.'”

Li recalled that Wuo asked him to donate several months ago for the trip and said he didn’t know if his business would benefit as a result of his $10,000 donation.

Wuo also acknowledged that the city’s trip to the Far East was originally his idea.

“Because of my connections and because I speak both languages, if the city staff [went] there it would be better if we could make the proper arrangements and they would be able to see the persons we need to see,” he said.

On the first two contributors who donated in January and Lazzaretto identified as Sichuan Arrow Recovery Tech Co. and Companhia de Comercial Dingyuan Limitada, Wuo said the companies’ executives are also friends of his who travel frequently between China and residences in Bradbury and West Covina.
According to Lazzaretto’s Feb. 17 staff report, “one or more owners of each firm may have interests in real estate and development companies in the San Gabriel Valley that may operate in the City of Arcadia.”

Wuo said he didn’t know if either contributor had Arcadia real estate interests and surmised that the city manager “may be covering in case they have some.”

Lazzaretto said, “Mayor Wuo has not indicated the names of those companies, and he only told me in passing there may be [real estate interests in Arcadia], he didn’t say there is.”

In response to adverse attention the city’s lack of donor vetting has drawn, Lazzaretto defended the city’s hands-off approach to questioning the motives of what he described as philanthropic contributors.

“The money is coming to the city, the money is not coming to an individual council member,” said Lazzaretto. “The money is not coming for any encumbered purpose. They’re not saying ‘You shall take this money and use it for the following things.’

“It’s understandable when people don’t have all the information they assume that there are nefarious circumstances, but we get donations from Westfield all time,” he added. “Nobody asks us if there’s undue influence there.”

Lazzaretto provided a few examples of recent donations that were not questioned with the same vigor as the China trip’s donors:
“A year or so ago we completed the museum education center,” he said. “That came with a little over half a million dollars worth of donations. We didn’t vet a single one of those donations. The major donor of that provided hundreds of thousands of dollars, it’s a Chinese corporation, we didn’t look into it. It’s not our past practice to vet people who want to give money to the city and allow us to do what we want with it.”

The city manager also emphasized officials’ intentions to be transparent throughout the trip-planning process.

“I know in my core that Mayor Wuo from the second he asked about this trip and suggested we might look into it, the very first thing he said was we need to get the city attorney involved, we need to do this right, we need to be above-board, we need to make sure that it’s done the right way,” said Lazzaretto. “We don’t want to do it like some cities do it where there’s a lot of questions afterwards, which is why we went to the [California Fair Political Practices Commission] before we knew any of the details of the trip.

“We asked them based on a bunch of different ways how we might set this [trip] up, ‘would this be legal, would that be legal, would the other thing be legal,'” Lazzaretto continued. “That’s why we went to the city attorney and had them look at the case law and all of that. What’s important for the public to know is [Wuo] was the guy who said from the get-go, let us make sure we do this right. I don’t want to do this if there’s any questions about people’s motives.”

Reacting to allegations from community members of apparent conflict of interest when it comes to real estate deals due to Wuo’s commercial real estate broker license, Wuo said he hasn’t worked in real estate since 2000 and called charges that he profits from Arcadia real estate “unfounded.”

Both Wuo and Lazzaretto noted apparent “prejudice” in the scrutiny placed on the donations from Chinese companies, claiming American firms that donate large sums to the city are never this heavily scrutinized.

“I don’t want to paint a picture that because Chinese people donate, that’s a bad thing, and Westfield Santa Anita Park donates is a good thing,” the mayor said. “That’s … making a decision based on race, and that’s wrong.”

Wuo added that he hopes “everybody keeps an open mind [without] pointing fingers, not making accusations which are not true. If they have any questions, they can ask.”

February 25, 2015

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