Sen. Kevin de León, D- Los Angeles, said in a statement that he will "cooperate fully" in the investigation.

Sen. De Leon to testify as California Capitol probe expands

Published: Saturday, Jun. 8, 2013 - 12:00 am | Page 1A
Last Modified: Monday, Jun. 10, 2013 - 8:09 am

Three days after the FBI searched a state senator's offices, another Democratic lawmaker said Friday he has received a federal subpoena and will testify before a Los Angeles grand jury in July.

Sen. Kevin de León of Los Angeles pledged in a statement that he would "cooperate fully," and a spokesman for Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he anticipated others in the Capitol will be drawn into the investigation as it proceeds.

"There's an expectation, consistent with standard procedure in an investigation, that law enforcement would want to speak with as many people as possible," Rhys Williams, a spokesman for Steinberg, wrote in an email to The Bee. "The institution will cooperate fully."

Williams said Steinberg had not received a subpoena. Other senators contacted by The Bee declined to return calls or referred reporters to the U.S. attorney's office in Los Angeles. Thom Mrozek, a spokesman for the office, declined to comment.

A spokesman for Assembly Speaker John A. Pérez said he believed no Assembly members have been contacted.

"We've had no contact with the feds, the speaker has not been subpoenaed, and as far as we know nobody else in the Assembly has been, either," spokesman John Vigna said.

Federal officials have yet to release any details about their motivation for searching the offices of Sen. Ron Calderon, D-Montebello, on Tuesday evening.

Greg Hayes, a spokesman for De León, said of the subpoena that "we assume it's related" to the raid. De León chief of staff Dan Reeves said in response to questions that the senator was not a target of the investigation.

"We've been advised that he is not," Reeves said.

Rumors have whirled through the Capitol since FBI agents entered two of Calderon's offices, the first time federal agents have raided a state lawmaker's Capitol office in decades. Calderon has not appeared at the Capitol since last week.

The Bee reported Friday that the FBI had recently raided at least two California medical businesses with connections to Calderon and his brother, former Assemblyman Tom Calderon.

In April, federal agents executed sealed search warrants at Pacific Hospital of Long Beach and Industrial Pharmacy Management in Newport Beach.

Both businesses are listed as clients of Tom Calderon on a disclosure statement he filed during his unsuccessful run for Assembly last year. Both are owned by Michael D. Drobot, a major campaign donor. He and his businesses have contributed to Ron Calderon and Tom Calderon's political campaigns.

Drobot's health care companies specialize in treating patients going through the state workers' compensation system, which directs injured workers to specific surgery centers for care.

Tom Calderon picked up the surgery center clients after serving four years in the state Assembly that concluded in 2002. While in office, Tom Calderon wrote a bill that allowed such centers to charge unlimited fees.

Last year De León carried an end-of-session bill that made major changes to the workers' compensation system. Senate Bill 863 set out to reduce the cost of the insurance plans for employers, while increasing the benefits paid to injured workers. It was backed by major employers and labor unions.

Savings would be realized, advocates for the bill said, by setting new fee schedules for many aspects of treatment – from the amount paid for copying medical files to the amount paid for performing surgeries. They said the changes were needed to limit how much service providers could bill to insurers.

Medical and legal professionals whose business depends on billing the workers' comp insurance system vociferously opposed the bill. Many of them flooded the Capitol last summer to testify against it, and some organized a worker protest on the lawn outside.

Some of the companies Tom Calderon represents as a consultant stood to lose money from De León's bill. With its new fee schedules, the bill removed their ability to charge extra for performing certain types of surgery. Calderon represents some medical clinics that perform surgery on workers' comp patients, as well as a company that makes medical hardware used in spinal fusion surgeries and other procedures.

SB 863 passed in the final days of session and was signed by Gov. Jerry Brown. Sen. Ron Calderon and another of his brothers, Assemblyman Charles Calderon, were among a small number of legislators who voted against it.

It wasn't the first time De León carried a bill concerning payments for procedures covered by workers' comp.

In 2011, he introduced a bill that did not advance far but would have been friendly to surgery centers treating workers' comp patients.

Senate Bill 896 would have allowed surgery centers to be paid up to two times the government-defined rate for spinal surgery involving implanting medical hardware.

Call Laurel Rosenhall, Bee Capitol Bureau, (916) 321-1083. Follow her on Twitter @laurelrosenhall.

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