ANOTHER CAPITAL SCANDAL . . . EXCEPT THIS ONE'S ABOUT CABS, NOT CONGRESS

First a little history. . .

Sam Smith - For many decades, DC had a taxi fare system based on zones rather than meters. This system made it virtually impossible for large corporations to take over the taxi industry as they had no way of knowing how much an individual driver was truly making. Thus the big outfits avoided the city.

DC's taxi industry flourished, reaching 8,000 cabs by 1994, more cabs than any other city in America. If all of DC’s cabs had been owned by one company, the firm would have been the city’s largest private employer. A study I did in the 1990s found that if DC had as few cabs per capita as Paris or London, the fleet would drop more than 90%. While DC had one cab for every 75 citizens, New York City had only one for every 600.

DC's cab system was thus in violation of an almost iron law of non-competition in the taxi industry that dated back at least to 1636, when the owners of Thames water taxis got King Charles I to restrict the number of horse-drawn hacks to 50 in order to cut down on the land-borne competition. And as recently as 1962, Chicago Mayor Richard Daley guaranteed 80% of any new cab permits to one of his buddies.

While the zone system was great for lower income residents - ranging from newly arrived blacks in the segregated city of the 1950s to a string of immigrant groups, (most recently including a strong Ethiopian element) - whites and the Washington Post didn't like it. They argued, among other things, that the zone system made it too easy to cheat the passengers. In fact, if there is one universal of the global cab industry it is that cabdrivers cheat, reflecting little more than that cabbies tend to be extraordinarily knowledgeable natives who do a lot of business with extraordinary ignorant visitors. A 1990s study by US News & World Report found, in fact, that DC was no worse than most of the major cities it looked at. While the USN&WR study found overcharges of about 5 bucks on an DC airport run, it also reported that in New York one should ask a taxi dispatcher for the best route to your destination: "A driver who takes the Belt Parkway from JFK to midtown, for example, can add $20 to a $25 to $30 fare." The reporters were overcharged $5 bucks for a similar run in Chicago, cheated by limo drivers in San Francisco, reported occasional $20 overcharges in Boston, and so forth. Even the DC cab commission's own study found that passengers were overcharged only 17% of the time, while being undercharged 10% of the time. This in a city where you needed to be conned by a factor of 50% to even equal cab rates in many other places.

And to some, there was a more important problem: the zoned fares kept powerful corporate interests from taking over the system. A Department of Justice study in the 1990s found that 87 percent of some 100 cities with taxi service restricted entry in some way. Around the same time, Chip Mellor of the Institute for Justice noted that Denver had routinely turned down every application for a new taxicab company from 1947 on. Chicago and LA were closed.

A few years ago, the city did away with the zone system. Less noted, it held back on examinations for new taxi licenses.

At the time, your editor (then still in Washington and a long-time advocate of the zones) argued that this was the launch of a scheme to take over the city's taxi system by a few big corporations. The Washington Post thought it was all great. But even I never expected that the story would take such a colorfully corrupt turn . . .

And now the rest of the story

DCist - Federal authorities have arrested 27 people so far in a massive bribery case tied to the D.C. taxicab industry. Two indictments released today accuse a total of 39 individuals of conspiring to bribe city officials in order to obtain fraudulent taxi licenses between 2007 and 2009.

The documents reveal that D.C. Taxicab Commission Chairman Leon Swain was the man who first alerted federal authorities to the conspiracy, and the Post reports that Swain was working undercover for the FBI on the case as recently as last month.

First word of the investigation broke last week, when Ted Loza, chief of staff to Ward 1 D.C. Council member Jim Graham, was arrested and charged with accepting $1,500 in cash and other gifts from taxicab lobbyist Abdulaziz Kamus. Kamus's name does not appear in today's indictments, and it's been previously reported that he was cooperating with the FBI as an informant.

The payments involved on the taxicab commission's end appear to be much larger: first $14,000 in cash, then $8,000, and even a shopping bag filled with $59,880, plus numerous smaller payments of around $3,000, all totaling up to ultimately hundreds of thousands of dollars.

Loose Lips, Washington City Paper - Loza's collar points to other, more mundane forms of corruption involving the council earmark process. LL was first to report that Fiesta DC, recipient of $300,000 in council-directed funds, employed Loza's wife. Many questions remain to be answered: For one, how could Loza get bought so cheap? For the favor granted, $1,500 was a pittance. Also, Graham insists he had no knowledge of Loza's activities, nay, never even talked about taxi legislation with him. That is not easy to believe. . .

Loza is said to have accepted, including 'trips. . . to Ethiopia and free limo rides to airports and other destinations in the D.C. area.' . . . Although the accusations against Loza are fairly recent, law enforcement sources said agents have been conducting a corruption investigation for at least a year. . .

Question is, who are the feds really targeting? Is it [Councilmember] Graham, or is it a taxicab operative? In his lede Examiner piece, Michael Neibauer seems to think it's the latter: 'Multiple sources familiar with the ongoing investigation told The Examiner that Graham's staff had been meeting through the summer with an official from Medallion Financial, a New York company that loans money to cabbies for medallions. A top law enforcement official said the company was linked to the bribery probe.' . . .

Washington Post - In 2007, the D.C. government ended the city's system of calculating fares by zone and adopted one that uses electronic meters. The indictment says that many in the industry believed the new system would lead to more regulation, "including stringent limitations on the total number of taxicabs licensed to do business." By July of last year, the District enacted a moratorium on the issuance of licenses to operate multi-cab taxi companies.

In apparent anticipation of the moratorium, Syume, Leghese and Ghirmazion conspired to bribe Swain to obtain "numerous" cab company licenses, the indictment says. The men were hoping to sell some of the licenses and hold onto others, which they believed would become more valuable, the indictment alleges.

In court papers, federal authorities accused Loza of taking $1,500 in cash, free trips and limousine rides from Abdulaziz Kamus, an advocate of the Ethiopian taxi community, in exchange for trying to influence taxi legislation.

Kamus was working as an informant for authorities, according to sources. He became known to federal agents when Swain reported that Kamus had tried to bribe him, the sources have said.

Kamus apparently flipped after being approached by federal agents. He has declined to comment. . .

DC Watch - While working for Jim Graham, top aide Ted Loza was adjudicated as domestic batterer and allegedly forced a woman to have an abortion, which Graham initially paid for. . . There's other Graham news! He's dropped his taxicab medallion legislation, and he explains to WaPo that it has 'nothing to do' with the fact that his most trusted aide was apprehended last week in a bribery sting. . .

Mike DeBonis and Jason Cherkis, Washington City Paper - Last Thursday, Ward 1 Councilmember Jim Graham stood in the corner of his office and spoke about his closest aide, arrested hours earlier for allegedly taking $1,500 in bribes to influence taxicab legislation. Only a thin wall separated Graham from a pack of federal agents, combing Ted Loza's office for evidence of corruption in the taxi industry. "I am deeply troubled at the indictment of Teddy Loza," Graham said, calling him "someone I have grown to trust and have confidence in."

That doesn't even begin to cover it. During his nine years in the council office, Loza forged a political and personal bond with his boss unique among Graham staffers past or present-one that plowed through all the barriers separating office life from personal life. Says one former staffer, "Some of us did call him 'Siamese Twin,' because it was like they were attached at the hip." Another ex-staffer calls Loza and Graham "inseparable in the professional sense."

Chumminess with the boss was a hard get in the confines of Graham's office, which resembles something of a municipal factory floor. The Ward 1 councilmember wields a taskmaster's approach to human resources, demanding long hours and absolute loyalty. Some ex-employees, many of them scattered around the District bureaucracy, have taken to calling themselves "SOJs"-survivors of Jim.

"If you are an employee, you are treated like a servant. There's no such thing as comp time," says one of the staffers. "Any time was Jim's time. It didn't matter. If you would be a few minutes late to the office, it's like you committed a cardinal sin.". . .

n Loza's hands, the chief of staff position encompassed a fair bit of junket planning for the councilmember. Ward 1 is easily the city's most diverse, with large populations of Latinos, Africans, and African-Americans, among others-a melting pot that doubled as a great pretext for overseas trips during council breaks. First came a 2001 mission to El Salvador, shortly after an earthquake in the country that's home to a hefty share of Ward 1'ers. Soon after, Loza would represent Graham on a humanitarian trip to Cuba. In 2004, Loza accompanied Graham on a journey to Ethiopia paid for by local Ethiopian business leaders. More trips to Central America and South America followed-most recently, a summer jaunt to Ecuador, Loza's homeland.

The transcontinental travel changed Loza from a dutiful, deferential emissary to a Graham goon, a more arrogant, self-assured enforcer of the councilmember's will, according to several sources. And Graham became more protective of Loza, defending him against criticism in neighborhood or office disputes. . .

Graham, early on in Loza's tenure, loaned him a small amount, $1,140, from his constituent services fund . . . And in 2002, Graham co-signed on a loan to help Loza and his companion Ligia X. Munoz buy a $202,000 condo in a Columbia Heights apartment building. And the bond went beyond financial assistance. Recently, Graham has shepherded Loza's application for citizenship though the federal bureaucracy, making calls to officials on his behalf.

As the years ticked by, Graham and Loza continued to redefine their relationship, not always in the most savory ways. In December 2005, while on a holiday junket to El Salvador, Loza had sex with a 26-year-old woman there. After Loza returned to Washington, the woman learned she was pregnant and informed Loza, who, according to court documents, arranged for her to come to D.C. on a tourist visa.

After she arrived, Loza pressured the woman to abort the baby, according to court records. Part of Loza's coercion, the woman would later testify, was physical. "On one occasion, after the parties had driven to get [the woman] a burrito, [she] reiterated that she did not want an abortion," a judge wrote. "[Loza] became upset and pushed the defendant out of the car. She was not injured. The car door was open, she said."

Loza's behavior was troubling enough that the woman's sister contacted his boss to help intervene. Graham's reply to that entreaty: "Does this conduct involve his professional responsibilities o his behavior on personal issues? Bests Jim."

The e-mail suggests that Graham had no interest in wading into this one. He didn't succeed: By the end of the month, the woman had had the abortion, more than five months into the pregnancy.

Graham put the $3,200 late-term abortion onto his personal credit card, according to a receipt included in court records. . .

The abortion didn't work wonders for Loza's relationship with the woman. According to a document filed by the woman's lawyer, "within two weeks of the abortion Mr. Loza began sexually abusing her and assaulting her (often during sex)." (The woman, through her sister, declined to comment.)

When the woman told Loza that she was pregnant again, in March 2007, Loza "reacted violently" and "hit [the woman] on the head with the sole of a leather shoe, the type he wears to work," according to a judge's finding. Loza then "pushed her against the wall" while the woman crouched down to protect her unborn child from the beating.

Loza began what the woman's lawyer would call a "relentless campaign to terminate the pregnancy." But this time she refused to do it.

The baby was born in October 2007. Two months later, on Dec. 10, Loza again abused the woman, after she tossed into the garbage some old shoes belonging to another woman Loza had fathered a child with. Loza, according to court documents, "berated" the woman, saying "that she was stupid and that she should not touch anything belonging to the mother of his other children." Scared of what Loza might do, she took the baby and left the apartment. It was after 1 a.m., and it was raining outside.

Court records outline what happened next: A passerby hailed a cab to drive her to the police station. There, police told her to go back to Loza's place to work things out. She did, spending the night on the couch with the baby. In the morning, Loza "called her stupid" and "said that she has only caused problems since she has been here and that she should not do anything because he could hurt her a lot." He then pushed the woman "very hard" and invited her to fight him. She didn't.

That day, she left Loza's apartment, filed for a restraining order, and never returned. She went to live with her sister and struggled to make ends meet.

Whereas most Salvadoran immigrants come to the U.S. in order to send money back home, the woman was relying on her own mother sending money from El Salvador, says the woman's sister.

For months afterward, Loza denied paternity and refused to pay child support. Then, while simultaneously denying he was father of the child in one court proceeding, he filed another court action demanding sole custody. (These court proceedings yielded the details for the history of Loza's stormy relationship with his companion.) In March 2008, a judge ordered Loza to pay $878 per month in child support. . .

Loza's lawyer retorted that the woman was leading a "double lifestyle" on the Internet. As proof of this duplicity, a court filing included a printout of the woman's MySpace page, including photos of the woman in a swimsuit, and the blockbuster allegation that of her 360 online friends, "252 or 66% are males." As for the custody issue, Loza's essential position was that the woman's immigration status was in flux and she could be sent to El Salvador. About a year ago, the woman was granted a four-year 'T' visa-a type of visa reserved for victims of human trafficking.

Earlier this year, Superior Court Judge Jerry S. Byrd tossed the custody case out of court, finding that Loza had abused the mother on at least two occasions and that he "has shown little or no interest in the minor child.". . .

Not only does Loza have the $878 per month obligation to care for this youngest child, but he has three other children by two mothers. A search of court records in Virginia and the District did not turn up any further child support obligations. There are other signs of financial stress: City records indicate that Loza owes more than $13,000 in property taxes on his Columbia Heights condo.. . .

Loza has had run-ins with the law in matters not involving his familial obligations. He was arrested on an assault charge in Virginia in 1999, prior to joining Graham's staff. . .

Loza's legal and personal issues in recent years go some way toward explaining why, when allegedly accepting an envelope stuffed with $500 in cash, he told his alleged briber, "You know I need it. That's why I take it, you know."