Leland Yee - release photo

California Sen. Leland Yee leaves the federal courthouse in San Francisco after posting bail. He is accused of political corruption and gun trafficking.Ben Margot/AP

The sun was shining on a brisk January day when Leland Yee took a seat at an undisclosed San Francisco coffee shop. Across from him sat a Cosa Nostra crime boss.

For more than two years, the California state senator had been engaged in a frantic quest for campaign cash. Over a steakhouse dinner the previous spring, he’d begun taking envelopes of cash – a risky move for the normally cautious politician. Now he was looking at a much bigger deal, one that could put his financial obstacles behind him in one stroke.

The mobster, who claimed to hail from New Jersey, wanted millions of dollars worth of smuggled firearms: automatic weapons, “shoulder-fired” missiles. Yee, 65, a career politician whose square, earnest face was a fixture in Chinatown, and who was perennially seen stumping for stricter gun control laws in Sacramento, said he was confident he could help. For a fee, the Democrat indicated he could connect the mobster with a high-end arms dealer with contacts in Russia, the Ukraine, “Muslim countries.”

“Do I think we can make some money? I think we can make some money,” Yee said. But the transaction was not for the “faint of heart,” he warned: The last time Yee had dealt with an arms dealer, they were in the Philippines, and Yee was surrounded by bodyguards with machine guns.

In truth, the coffee shop tete-a-tete was a trap. The mob boss sitting across the table from Yee was actually an undercover FBI agent wired with a recording device, according to documents filed this week in U.S. District Court in San Francisco, part of an elaborate sting that snared the politician.

It also was a defining moment in a five-year-long FBI investigation that began with an unsolved homicide in Chinatown. The detour into a complex political tale of influence peddling and desperate lunges for campaign and personal cash surprised even the veteran agents.

The probe was carried out by 14 undercover FBI operatives – colorful characters worming their way into Yee’s life: the mobster, an Atlanta developer, a tech industry consultant looking for state contracts, a medical marijuana entrepreneur.

Turning points of their investigation included a whispered conversation in a karaoke bar, an envelope of cash passed at a popular steakhouse and promises of political patronage made at a state cafeteria, court records show. The investigation ping-ponged from the dingy back alleys behind the tchotchke-choked streets of Chinatown to the rarified environs of the city’s renowned restaurants.

Leland Yee - New Asia photo

The owner of the New Asia restaurant in San Francisco’s Chinatown was indicted in the case that involves Raymond “Shrimp Boy” Chow and state Sen. Leland Yee.Sarah Rice for CIR

And it ended this week with an indictment that accused 26 people of racketeering, bribery, even soliciting murder for hire. Among them were reputed Chinatown gangster Raymond “Shrimp Boy” Chow and his aides, accused of using a Chinatown benevolent association as a front for their crime family; Keith Jackson, a former president of the San Francisco school board, who is accused of working as Yee’s political bag man; and the most prominent of them all: Yee, a liberal lawmaker running for California secretary of state on a platform of political reform also known, the FBI said, as “Uncle Leland.”

The case has roiled the political scene in San Francisco, which Yee has represented through one elective office or another for 28 years. In a city with its share of scandals, this one stood out.

It also shook the California state Capitol, where Yee is the third senator to be charged with a felony during this legislative session – and the only lawmaker in state history to be accused of conspiring with international arms dealers in a quest to raise campaign cash.

Yee, freed on bail after being arrested at his home Wednesday, will plead not guilty, according to his lawyer.

The government’s case describes a man on a collision course of political ambition and financial stress. Even as Yee mounted an expensive statewide race for secretary of state, he was laboring to pay off $70,000 in debt left from his failed 2011 campaign for San Francisco mayor.

In a detailed 137-page affidavit, the government said Yee was aided in his crimes by Jackson, who is accused of serving as the senator’s liaison to underworld figures, promising them political favors in exchange for campaign contributions.

Yee emigrated from China’s Guangdong province as a toddler, grew up in San Francisco and earned a doctorate in child psychology. His political career began in 1986, first on the San Francisco school board, then the city’s board of supervisors, the state Assembly and, in 2006, the Senate.

Over the years, he burnished an image of a good-government advocate, crusading for gun control, government transparency and campaign finance reform. In 2012, he was named a Clean Money Champion by the California Clean Money Action Fund. His penchant for biting, no-B.S. quotes made him a media darling. Less than a week before his arrest, he was honored by the Society of Professional Journalists for confronting the governor and his own party on behalf of open public records.

Yet Yee also had a reputation for pushing some ethical boundaries.

While on the school board, he was caught registering his children under a fake address so they could be enrolled in better public schools. On a Hawaii vacation, he was arrested for shoplifting suntan lotion. Twice, San Francisco police stopped him on suspicion of soliciting prostitutes in the city’s Mission District. In each case, he denied wrongdoing. 

Yee met Jackson, now 49, while they served together on the school board nearly 20 years ago. An African American man with an engaging smile, Jackson grew up in the old North Beach housing projects near Fisherman’s Wharf and later worked as a bank teller. He became politically active, building ties in both the gay and black communities, and in 1994 was elected to the school board on a reform slate.

Jackson worked to rename a school for Rosa Parks, and he hosted the civil rights pioneer at the ensuing ceremony.

He had ethical issues of his own. Jackson once had a job pursuing deadbeat dads as an investigator for the district attorney’s office, but the San Francisco Chronicle learned in 1997 that he was $5,000 in arrears on his own child support payments. He left the school board before his first term ended.

In the years that followed, Jackson worked as director of the city’s Black Chamber of Commerce, then became a political consultant. One big client was Lennar Urban, the giant homebuilding firm that is redeveloping the old Hunters Point Naval Shipyard in the heart of the city’s largest African American community. Other clients have included the San Francisco 49ers and Yee.

Jackson also consulted for Chinatown’s Chee Kung Tong, a benevolent association sometimes called the Chinese Freemasons. That put him in close contact with Raymond Chow, the compact, muscular man who served as the organization’s “dragon head,” or leader.

Leland Yee - Hop Sing Tong photo

The Hop Sing Tong, a Chinese fraternal organization, is located on Waverly Place in San Francisco’s Chinatown. Accused racketeer Raymond “Shrimp Boy Chow” once boasted he “owned” the Hop Sing Boys criminal gang.Sarah Rice for CIR

Chow said his mother named him “Shrimp Boy” to ward off evil spirits. By his own account, he became a Chinatown gangster soon after he emigrated from Hong Kong as a 16-year-old. At 17, according to an interview he gave to SF Weekly, he was present at the infamous 1977 Golden Dragon massacre – a wild predawn gang shootout in a Chinatown restaurant that left five dead and a dozen wounded – but escaped unhurt.

He became leader of the Hop Sing Boys, a violent Chinatown gang that was involved in extortion, loan sharking, arson and heroin dealing, as well as multiple shootings, court records show. “I owned the gang,” he bragged to one prosecutor.

After pleading guilty to federal racketeering charges in 2000, Chow became a government witness to reduce his 23-year prison sentence. Paroled three years later, Chow publicly declared he had reformed and said he was devoting himself to good works – campaigning for a new community college campus in Chinatown and working for the Chee Kung Tong, where he assumed control in 2006 after the unsolved killing of his predecessor, Allen Leung.

Chow’s tale of personal redemption struck a chord with liberal politicians, and he has been photographed with or publicly honored by many, including U.S. Sen. Dianne Feinstein, Lt. Gov. Gavin Newsom, San Francisco Mayor Ed Lee and Yee.

But after Leung’s fatal shooting, the FBI targeted Chow in a racketeering investigation, court records show. Investigators were building a case that the reformed gangster actually was involved in money laundering and selling heisted liquor, cigarettes and other stolen goods.

In May 2011, according to the FBI affidavit, Chow introduced Jackson to a new acquaintance involved in gambling, bookmaking and sports betting, who was trying to move into marijuana cultivation on the West Coast. That man was the undercover FBI agent posing as a boss of Cosa Nostra – another name for the Mafia in Sicily, Italy.

Jackson had stumbled into the FBI’s probe of organized crime and corruption in San Francisco’s Chinatown. And through Jackson, Yee appeared in the agents’ sights as well.

But the affidavit clearly shows the undercover agents didn’t immediately pivot their gangland Chinatown investigation toward Yee, who at the time was running for San Francisco mayor against Ed Lee, the man holding the job,  and several other candidates. That shift was a product of Jackson’s dogged pursuit of campaign cash. He would not take no for an answer.

Jackson was Yee’s chief fundraiser. He immediately began hitting up the undercover agent for money, according to the affidavit.

The pretend mob boss demurred.

Jackson insisted.

The mobster tried to keep blowing him off.

Finally, the agent steered Jackson to another undercover agent, this one posing as a developer from Atlanta. The FBI set up a ruse designed to test whether Yee could be lured into soliciting political bribes. They concocted a story that the developer needed political juice to expand his operations into California. Could Yee help?

A series of stings outlined in the affidavit seemed to answer with a resounding yes.

Yee offered to chaperone mob-influenced public health legislation in exchange for cash. And later he went even further, so far that if the sting were a television show, it would have jumped the shark: The Democratic senator proffered himself as the linchpin of an international gun-running conspiracy involving Muslim terrorists in the Philippines.

On Sept. 22, 2011, the agent posing as the Atlanta developer met Yee at a fundraising event in San Francisco and wrote him a $500 check – the maximum donation allowed under city law. Yee followed up with a voicemail, transcribed in the court filing: he “appreciate[d] the conversation and then hopefully, um, you know, there are things that uh, we can do to be of help uh, to you, and uh, but anyway just wanted to reach out and say thank you very, very much.”

Two days later, Yee called the developer twice. The first time, he said he wanted to discuss affordable housing development, particularly once he became mayor. In the second call, Yee said he couldn’t talk policy on the same call in which he asked for money. And then he asked the developer to raise $10,000 for his campaign.

The agent obliged. He got 10 undercover operatives to write $500 checks to Yee’s campaign. Then the agent wrote a $5,000 check – 10 times the legal limit. When Yee asked for even more money, the developer balked. He needed to know he’d get something in return.

Leland Yee - Mayoral campaign 2011 photo

State Sen. Leland Yee, center, campaigns in San Francisco’s Sunset District during the 2011 mayor’s race. After he lost, the FBI says Yee tried to broker illegal arms deals to repay ,000 in campaign debt.Adithya Sambamurthy/CIR

Yee assured him that once he was mayor, that would be no problem. “We control $6.8 billion, man, shit,” he reportedly said, referring to the city’s annual budget.

Yee never gained control of that budget. He placed fifth in the mayor’s race. California’s term limit law also meant he soon would be pushed out of his state Senate seat. To avoid a skidding halt to his quarter-century political career, he decided to run for secretary of state. For that, and for his campaign debts, he needed money badly.

That need bound him even more closely to the undercover agents, who in turn set an ever-larger trap.

In the affidavit, they are identified only by letters and numbers worthy of PayPal passwords. But the web they wove to catch Yee was intricate and precise.

The one posing as an Atlanta developer persuaded Yee to call a state health department official – actually another FBI agent – about a computer contract, the affidavit says. Yee agreed to help steer the contract to a software consulting company called Well Tech – supposedly a client of the developer. It actually was an FBI front run by an agent who used the alias Sonja Schmidt.

Yee and Jackson met with the developer Sept. 4, 2012, at the cafeteria in the California state building on Golden Gate Avenue in San Francisco, just across from the gold-domed City Hall. Yee complained about financial pressure.

“We’re 32 out now. $32,000 out from paying off the debt. … So if you could do another $10,000, that would be good,” Yee is quoted as saying.

The developer responded that Well Tech needed help with the state contract.

After receiving another $10,000 check from one of the undercover agents, Yee followed up with a letter of introduction for Schmidt on his Senate letterhead recommending her purported software firm, the affidavit says.

In January 2013, Yee’s quest for cash led him to San Francisco’s Waterbar, a stylish seafood restaurant offering $110 iced shellfish platters in the shadow of the Bay Bridge. It was there that Yee for the first time met the agent pretending to be a Cosa Nostra boss. By then, the agent had so thoroughly infiltrated Chow’s Chee Kung Tong organization that he was working there as a consultant.

Leland Yee - Chinese free masons photo

Raymond “Shrimp Boy” Chow served as the “dragon head,” or leader, of the Chee Kung Tong benevolent association, located on Spofford Street in San Francisco’s Chinatown.Sarah Rice for CIR

The agent told Yee that he needed a favor: a proclamation from Yee praising Chee Kung Tong.

Yee reportedly expressed concern about Chow’s criminal past: “He’s still hot stuff. So we just gotta be careful, man.” But he delivered the proclamation anyway and eventually received a $5,000 check from an agent in return.

Last March, Yee went to a Starbucks at the Marriott Marquis near the San Francisco Museum of Modern Art. An undercover FBI agent pretending to be a business associate of the Atlanta developer was there with yet another agent, this one posing as an Arizona businessman who styled himself as the “Anheuser-Busch of medical marijuana.”

This agent said he wanted to expand his medical marijuana businesses into California. He urged another kickback scheme: In exchange for a payoff, Yee would usher legislation to favor well-financed marijuana producers by requiring dispensaries to employ physicians.

Two months later, on May 17, the deal was sealed over dinner at Alexander’s Steakhouse near AT&T Park, where the Giants play baseball. It is a white-tablecloth establishment, where only six entrees on the extensive menu are identified as “not beef” and a 2-pound Wagyu ribeye costs $350. There, Yee would take cash from an FBI agent directly for the first time.

At first, Yee seemed to refuse the offer – $10,000 to reach out to another senator carrying a marijuana dispensary bill. He was not interested in money, the affidavit says, but instead wanted his friends to benefit from his work.

The agent posing as the marijuana distributor handed Yee an envelope containing $5,000 anyway. He also gave Yee a written proposal for legislation requiring that a doctor be available for consultations at medical marijuana clinics.

“Is there a check?” Yee reportedly asked.

“I don’t do checks,” the agent replied.

Yee later arranged for the agent to meet with another unidentified lawmaker on the issue, the affidavit says, but Yee didn’t sponsor any legislation. (Two bills pending in the Legislature at that time touched on professionalizing medical dispensaries – one by Santa Ana Sen. Lou Correa, another by San Francisco Assemblyman Tom Ammiano and Senate President Pro Tem Darrell Steinberg. All three have denied any role in the Yee matter.)

Perhaps empowered by the series of successful multithousand-dollar transactions, Yee upped the ante – and in the process dug himself a far deeper hole with the FBI.

In August, according to the government’s account, Jackson told the agent posing as a mobster that Yee had a contact in the international arms trade. This kind of connection, subsequent conversations would show, could be worth $100,000 – or more – to the senator.

This new Yee enterprise emerged even as the senator was pushing gun control in Sacramento, the latest of his unsuccessful attempts to strengthen California’s assault-weapon ban. In interviews, Yee frequently talked about soldiering on despite vehement criticism – even death threats – from the gun lobby.

“This is not an easy issue,” Yee told KPIX-TV in 2012. “But I am a father, and I want our communities to be safe, and God forbid if one of these weapons fell into the wrong hands.”

Yet Yee would not only offer, but insist on being the conduit between the supposed mobster and automatic weapons equivalent to military M16 rifles, the government maintains.

It all began with a suggestion planted by the FBI. While having dinner with Jackson at Roy’s restaurant in December, a Hawaiian fusion spot on Mission Street downtown known for its macadamia-crusted mahi-mahi, the mobster said he wanted guns. He needed security, he said, for illegal marijuana plantations he hoped to establish in Northern California.

The agent handed Jackson a white envelope containing $1,000. This, he declared, should motivate Yee to set up a meeting between the agent and the international arms dealer Yee had been promising to produce.

Leland Yee - Roy's photo

Political consultant Keith Jackson, accused of soliciting bribes on behalf of state Sen. Leland Yee, allegedly discussed a murder-for-hire plot at Roy’s restaurant in San Francisco with an undercover FBI agent.Sarah Rice for CIR

Jackson assured the agent that the trafficker had access to cargo containers full of weapons.

Then the conversation shifted to something far more sinister. The agent said he wanted one of his associates killed – and Jackson offered to connect him with a willing hit man.

Also at the dinner was Jackson’s 28-year-old son, Brandon, who works for his father’s consulting firm. Although he has no criminal record, Brandon Jackson expressed interest in carrying out the murder himself, the government says. He said he had a contact at the state Department of Motor Vehicles who could provide a photo of the intended target. Brandon Jackson said he would gather intelligence and study the target’s daily routine. His enthusiasm that evening helped him earn a slot in the 26-person indictment.

That dinner came a month before Yee met the Cosa Nostra agent at the San Francisco coffee shop and warned him that gun dealing was serious business. 

As Jackson listened at the coffee shop this past January, Yee explained that the arms dealer was cautious about choosing business partners but “has things you guys want,” according to the affidavit. The arms dealer, Yee added, sourced his weapons from places as far flung as Russia and the Ukraine but also had contacts in Boston and Southern California.

“I know what he could do,” Yee said. “I have seen what he has done in the past on other products, and this guy has the relationships.”

The mobster pointed out that a few weeks before, he had given Yee $5,000 for his secretary of state campaign.

It was time to return the favor.

“Do I think we can make some money?” Yee said. “I think we can make some money. Do I think we can get the goods? I think we can get the goods.”

Yee told the mobster that their relationship was superbly beneficial. He said that once he became secretary of state, he wanted the mob boss and Jackson to keep all the money they might make from the gun transactions. He didn’t “want to go to jail,” Yee said.

The agent told Yee that he would pay the senator and Jackson hundreds of thousands of dollars for helping with the arms deal. As a measure of thanks, Yee told the mobster that once he became secretary of state, he would make sure the mobster could travel to Russia with an official state delegation.

About a month after that meeting, in late February, Yee again met with Jackson and the undercover agent. The lawmaker wanted to urge caution.

A state senator from Southern California, Ron Calderon of Montebello, had been indicted the day before on public corruption charges. Yee made it clear, the affidavit says, that he viewed Calderon’s indictment as a cautionary tale – not about staying clean, but about involving too many people in a crime.

The agent did not back down; in fact, he turned up the heat. He wanted to buy an entire container of weapons – $2 million for the first shipment. He wanted firearms that were mobile, light and powerful.

Yee told the agent his stance on the weapons deal was “agnostic.”

“People want to get whatever they want to get,” he said. “Do I care? No, I don’t care. People need certain things.”

Yee emphasized that the weapons trafficker would deal with the agent only under one condition: Yee had to be involved. He advised starting off doing small deals. He attributed his long career in public office, he told the man, to being careful and cautious.

And yet, Yee confided that he was unhappy with his life.

“There is a part of me that wants to be like you,” he reportedly said. “You know how I’m going to be like you? Just be a free agent out there.” Perhaps he would go hide out in the Philippines, he said.

A few weeks later, on March 5, Jackson told the undercover agent that the intended arms dealer was tied up with world affairs. Instead, the agent would deal with a weapons trafficker in the Philippines. Their U.S. point of contact for the deal would be Dr. Wilson Lim, a Daly City dentist who lives in Hillsborough and has donated $3,500 to Yee’s Senate campaigns, according to secretary of state records.

Leland Yee - FBI raid photo

Federal agents carry evidence from the Chee Kung Tong benevolent association in San Francisco’s Chinatown. Raymond “Shrimp Boy” Chow, the association’s leader, is accused of racketeering in a case that involves state Sen. Leland Yee.Eric Risberg/AP

Yee described Lim – also named in the government indictment – as originally from Mindanao, a region in the southern Philippines. Muslim rebels there, Yee said, had no problem “kidnapping individuals, killing individuals and extorting them for ransom.” It was that region, Yee reportedly added, where he once was surrounded by guards with automatic rifles while visiting at the invitation of the Mindanao government.

Lim, he added, had a relative who would be their Philippines connection to a man who previously sold guns to individuals from Florida. Those unnamed individuals picked up the weapons in Cagayan de Oro, Mindanao’s largest seaport. The FBI agent posing as a mobster agreed to follow the same playbook, shipping the weapons from there to the Port of Newark, N.J., then on to Sicily and North Africa.

When the agent met with Lim, Yee and Jackson the following week, the affidavit says Lim asked the agent to put together a list of desired weapons. That list would take a circuitous route to the arms dealer: The agent would give it to Jackson, who would turn it over to Lim, who would pass it on to his nephew in the Philippines after the November election.

The agent met again with Yee and Jackson a few days later. The agent gave the list of weapons he wanted to Yee, who said he would photocopy it and give it to Lim.

Twelve days after receiving the list, Yee was arrested at his San Francisco home, ushered handcuffed into an unmarked car. The gun lobby was quick to label him a hypocrite. Steinberg, the state Senate president who has remained circumspect about the other two indicted members of his house, stepped to the microphones to issue a terse demand of Yee: “Leave. Don’t burden your colleagues and this great institution. Leave.”

Wearing a blue windbreaker and a stern expression, Yee left the court that afternoon, having relinquished his passport and a bond to cover half a million dollars in bail – more than 10 times what all his interactions with the FBI had netted.

Within less than 24 hours, he announced his withdrawal from the secretary of state race. And by week’s end, he was barred from the Senate. Steinberg led the vote and afterward told reporters that while Sacramento politicians go through extensive ethics training, “I know of no ethics class that teaches about the illegality or the danger of gunrunning or other such sordid activities.”

This story was edited by Amy Pyle and copy edited by Nikki Frick and Christine Lee.

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Erica Perez is an investigative reporter focusing on higher education for The Center for Investigative Reporting. She came from the Milwaukee Journal Sentinel, where she covered the University of Wisconsin system, the Wisconsin Technical College system and private colleges. A California native, Erica previously covered K-12 education for the Orange County Register. Before earning her master’s degree in journalism, she taught high school English for two years. Erica graduated from Stanford University and the University of Southern California’s Annenberg School for Communication.

Matt Smith is a reporter for Reveal, covering religion. Smith's two-decade career in journalism began at The Sacramento Union in California. He went on to positions at newspapers in Albuquerque, New Mexico; Twin Falls, Idaho; Fairfield, California; and Newport News, Virginia. Between 1994 and 1997, Smith covered Latin America as a reporter in Dow Jones & Co.'s Mexico City bureau. For 14 years, he was a lead columnist at Village Voice Media in San Francisco. He came to Reveal from The Bay Citizen. Smith holds a master's degree from the Columbia University Graduate School of Journalism and a bachelor’s degree in political science from Reed College in Portland, Oregon. Before his career in journalism, Smith was a professional bicycle racer. He is based in Reveal's Emeryville, California, office.

Lance Williams is a former senior reporter for Reveal, focusing on money and politics. He has twice won journalism’s George Polk Award – for medical reporting while at The Center for Investigative Reporting, and for coverage of the BALCO sports steroid scandal while at the San Francisco Chronicle. With partner Mark Fainaru-Wada, Williams wrote the national bestseller “Game of Shadows: Barry Bonds, BALCO, and the Steroids Scandal that Rocked Professional Sports.” In 2006, the reporting duo was held in contempt of court and threatened with 18 months in federal prison for refusing to testify about their confidential sources on the BALCO investigation. The subpoenas were later withdrawn. Williams’ reporting also has been honored with the White House Correspondents’ Association’s Edgar A. Poe Award; the Gerald Loeb Award for financial reporting; and the Scripps Howard Foundation’s Award for Distinguished Service to the First Amendment. He graduated from Brown University and UC Berkeley. He also worked at the San Francisco Examiner, the Oakland Tribune and the Daily Review in Hayward, California.