Rave Corruption Case at Coliseum Involves Questionable Email D.A. Calls 'Smoking Gun'
The case against two of the nation's biggest rave promoters, who have become entangled in the L.A. Coliseum corruption scandal, relies on emails between the party organizers and a public employee, Coliseum events manager Todd DeStefano.
One of those emails, which a main prosecutor told us is a "smoking gun," has a 1999 time stamp on it. But the case against the two only alleges improprieties since 2008.
Prosecutor Max Huntsman argues that the email in question, in which Coliseum events manager Todd DeStefano says " ... rent will only be $25,000" for an upcoming Go Ventures rave, contains a bad time stamp of Jan. 14, 1999.
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Indeed, the party in question, Together As One, was usually held on New Year's Eve each year at the Coliseum's sister venue, the Sports Arena.
The case against Go Ventures' Reza Gerami and Insomniac's Pasquale Rotella essentially alleges that, in exchange for low rent and easy going at the public venues, the promoters would knowingly pour hundreds of thousands of dollars into side businesses controlled by DeStefano.
The two promoters were hit with charges that included conspiracy, embezzlement and bribery for paying DeStefano nearly $1.8 million since 2008 that didn't end up in the Coliseum/Sports Arena's hands.
At the heart of the District Attorney's prosecution, according to one document, was the rave promoters goal ...
... to continue to hold the events they promoted at the Coliseum through contracts that DeStefano negotiated to the benefit of the promoters, thereby saving them significant sums of money, and to the detriment ofthe Coliseum which lost revenue by the reduced costs as well as the payments diverted to DeStefano's personal business accounts. Rotella and Gerami paid DeStefano to directly lobby for them to save them at least $1 million by virtue of his position as a Coliseum insider who affected the contract for their events and the amount of rent paid to the Coliseum.
It's a strange argument on a couple fronts, however:
The "smoking gun" email, with a 1999 date printed on it, describes low rent that was given to promoters and others who rented the venues dating back to at least 2004, according to what Gerami's attorney, Stefan Sacks, told the Weekly.
Raves have been held at the venues since ... 1999. Todd DeStefano has been an events manager there in some form since ... 1998.
We were told that some big events at the venues paid no rent at all because they brought in some much business for the Coliseum/Sports Arena in terms of concessions and parking, which the venues keep.
So what, then would be the advantage in playing DeStefano on the side -- hundreds of thousands in fees not required by other concert promoters at the venues -- if the rent was already low?
One argument, seen above, was that they were paying in order to "continue to hold the events" there, as if raves were endangered.
The electronic dance music festivals, however, were not in jeopardy by anyone's estimation until the summer of 2010, when a 15-year-old girl who had attended Rotella's Electric Daisy Carnival died of an ecstasy overdose and leaders started questioning why raves were being held on public property.
It's true that Rotella's people then started lobbying heavily (and unsuccessfully) to allow the parties to continue, but that doesn't explain why such alleged side payments would be made in the two years previous.
Sacks, Gerami's attorney, told us this:
The District Attorney's theory of this case is that suddenly a new deal is set up where the Coliseum is only getting a flat fee ... The payments to DeStefano were to get that flat rate deal and that somehow the Coliseum was losing money because of that.
In reality, the payment structure for use of the grounds and the venues, since 2004, had been a flat rate deal long before Todd had been involved. In fact the first people to get that deal were actually Goldenvoice [the local concert promoters who put on Coachella].
What ended up happening was that when Reza found out Goldenvoice got a flat rate deal for use of the Sports Arena, he wanted the same deal. That became the standard deal -- the $25,000 deal.
He said for some events, such as a Bruce Springsteen concert, the venues "were just waiving fees completely."
The lawyer continues, addressing the "smoking gun" email:
That email is the email they bring up as their strongest piece of evidence against Reza. I don't have a lot of confidence in the email in general as to when it was sent and who the recipient was. There's some technical glitches there. There's also some typos that look like glitches.
Besides that, here's the crux of Gerami's defense: Those payments to DeStefano's own side companies were for his off-site help promoting the parties. Sacks:
What was going on was that DeStefano was providing services regarding the events' expansion to Exposition Park on state land above and beyond his role as assistant general manager [at the Coliseum/Sports Arena]. He's a very charasmatic individual. He has a real eye for promotion.
Sacks says "part of the confusion" for the promoters, as well, was that DeStefano was helping to manage Coliseum events as a private contractor when the rave promoters first met him. (A Coliseum official told the Weekly that DeStefano has been on-board as a public employee since 1998).
2008, when all that extra cash started going to DeStefeno, Sacks says, is when the raves started expanding outside the purview of the Coliseum and into parking lots and public land not run by the Coliseum Commission. The parties, including 2004's Independance by Go Ventures, were adding second and third stages and more.
Prosecutor Huntsman, for his part, says a $60,000 wire transfer from Gerami to DeStefano in 2010 corresponds with the alleged side deal set forth in the "1999" email, which he says is from 2010:
I'd call it a smoking gun. But if you took it away, the case wouldn't fall down. You'd still have the other documents I attached to my filing last week on the issue. I'd say they show pretty clearly what the defendants were up to. But that's for a jury to decide.
I have heard that at least one of the promoters was paying DeStefano for longer than we have evidence of. I was told it was only a couple of years, though.
D.A.'s spokeswoman Jane Robison says of the "1999" email:
Our investigators and prosecutors found that DeStefano's computer had a system clock that was off at some points.
A lobbyist and spokeswoman for Rotella said his attorney, Gary Jay Kaufman, would decline to speak on this or any other matter while the case is being litigated.
The pair of promoters has pleaded not guilty and is awaiting trial.
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