California is awash in cannabis cash, which some use to bribe public officials
SACRAMENTO - Sheriff Jon Lopey was startled when a stranger offered him $1 million if he would keep deputies away from certain illegal cannabis farms in Siskiyou County.
Lopey called in the FBI, and, later, deliveries of envelopes stuffed with thousands of dollars in cash were recorded by cameras and microphones hidden on the sheriff’s cluttered, wooden desk. Two people were later indicted by a federal grand jury on charges of attempting to bribe the elected sheriff.
“I was surprised and offended that a citizen would believe a law enforcement administrator would compromise his ethics and morals by accepting money,” said Lopey, whose rural county abuts the Oregon border and outlaws outdoor marijuana farms.
In the more than two years since California voters approved the licensed growing and sale of recreational marijuana, the state has had a half-dozen government corruption cases as black-market operators try to game the system, through bribery and other means. The cases are tarnishing an already troubled introduction of the state permitting of marijuana businesses as provided for when voters approved Proposition 64 in November 2016.
Opponents of the initiative say the cases confirm their campaign arguments that legalization wouldn’t end the black market and the criminal behavior it has unleashed.
“We knew this was going to be an issue. The money is so great that the temptation is always there,” said William Lowe, a leader of the group Americans Against Legalizing Marijuana.
California is awash in cannabis cash from inside and out of the state, partly because marijuana remains an illegal drug under federal law, so banks won’t accept cash from the businesses. The state’s black market for cannabis was estimated to be worth $3.7 billion last year - more than four times the size of the legal market, according to the firm New Frontier Data.
Proposition 64, approved in 2016, allowed the state to license businesses to grow and sell marijuana but required the companies to get approval from the cities and counties, most of which have outlawed marijuana operations. Experts say local resistance explains why many of the corruption allegations center on illegal attempts to buy help from city and county officials.
“There is no doubt in my mind that the multibillion-dollar nature of the marijuana industry is corrupting public officials,” said Lopey, a 41-year veteran of law enforcement who began his full-time career as a California Highway Patrol officer stationed in East Los Angeles.
Proposition 64 also outlawed the transportation of cannabis out of the state, which was an issue in the Siskiyou County indictments against Chi Yang and his sister, Gaosheng Laitinen.
Yang allegedly approached the sheriff in his county office in Yreka in the summer of 2017, and initially suggested the $1 million could go to a foundation headed by Lopey.
At one of the subsequent meetings where Lopey was handed the envelopes of cash, Laitinen allegedly sought assurances about what their payments would buy: “Are we talking about protection from being raided?” she asked the sheriff, according to a DEA agent’s affidavit attached to the criminal charging document.
The two allegedly paid Lopey $10,500, including four $500 cash bonuses, before they were arrested, according to court records.
That case is one of several that have involved cannabis sellers and growers allegedly bribing or trying to bribe government officials, or public officials acting illegally to get rich from marijuana.
Last year, Jermaine Wright, then the mayor pro tem of Adelanto, was charged with agreeing to accept a bribe to fast-track a marijuana business. Wright’s trial is scheduled for August. In May, FBI agents served search warrants at the home of Rich Kerr, who was mayor of Adelanto at the time. City Hall and a marijuana retailer were also served with warrants.