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Why Did Corrupt Real Estate Developer Arman Gabay Get Favorable Treatment?

LA WATCHDOG - On Thursday, December 15, Arman Gabay, a Beverly Hills real estate developer, was “sentenced to 48 months in federal prison for offering to buy a million-dollar home for a Los Angeles County public official in exchange for the official’s assistance securing a $45 million county lease” for his Hawthorne Mall property. He was also fined $1,149,000.  

Gabay appears to have cut a very favorable deal.  

Arrested in May of 2018, he eventually agreed to plead guilty four years later to one count of bribery, a crime punishable by up to ten years in federal prison.  While the U.S. Attorney’s Office recommended a sentence of nine years in prison and three years of supervised release, Gabay escaped with only four years in prison, most likely at a Club Fed, a minimum security facility.  

The fine of $1.1 million is chump change for Gabay.  He, along with family members, are reputed to control some very valuable real estate in Southern California.  This includes the Bedford Triangle located in the Beverly Hills Golden Triangle, across the street from Neiman Marcus and Saks Fifth Avenue. The estimated value is more than $50 million.  

He also lives in a 9,800 square foot mansion valued at $9 million according to Zillow. 

The sentencing memo discussed other “play-to-play” schemes involving Gabay.  These included working with a lobbyist to arrange for a public official to secure Section 108 housing vouchers for a proposed apartment project in Calexico.  He was also working with a high level public official to arrange for favorable tax treatment for a third party individual, most likely for a real estate property.  In both cases, money would be contributed to the campaign war chests of the corrupt politicians and other friendly officials.   

Gabay was also a very active contributor to our elected officials, expecting favorable treatment in return.  Beneficiaries included numerous City officials, including, but not limited to, Eric Garcetti, Antonio Villaraigosa, and Jose Huizar.  City Council President Herb Wesson also received campaign contributions that may explain why Wesson supported, in the face of considerable pushback, Gabay’s controversial development of District Square, a seven acre property at Crenshaw and Slauson in South LA that has been vacant for over a decade. 

While Gabay may have received a lighter sentence and a lower fine than warranted, he is still going away for four years. And hopefully, he will name other corrupt politicians.  And for good measure, the City and the County should also adopt policies that they will not do business with Gabay or any affiliated entity.    

And thanks to the U.S. Attorney’s Office and the FBI and its wire taps for exposing this “pay-to-play” corruption.  

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate.  He can be reached at:  [email protected].)