Alfonso Aguilar, executive director of Fiesta DC, can only remember one time when Ted Loza was humble.

Loza, the chief of staff to Ward 1 Councilmember Jim Graham arrested today on bribery charges, had called on Aguilar for a big favor. He wanted the man to give his wife a job.

More than a year ago, Aguilar says, he met with Loza and another board member at Millie & Al’s, an Adams Morgan dive bar, to discuss Loza’s wife’s employment prospects at the organization, which organizes a yearly Latino festival in Mount Pleasant among other events.

At the meeting, Loza asked Aguilar to consider his wife for an administrative job. “My wife is looking for a job,” Aguilar recalls Loza telling him. “Do you have something?”

Aguilar was indeed thinking about hiring an additional staffer. But he felt uncomfortable hiring Loza’s wife, Ligia X. Munoz, he says. The problem: Loza served on Fiesta DC’s board.

Aguilar says that he told Loza that hiring Munoz would present at least the appearance of a conflict of interest. Loza, he says, agreed.

But Loza pressed the matter, and Aguilar agreed to the hire if the full board of directors would approved. Loza went before the board and talked up his wife’s job skills.

The board, Aguilar says, assented but stipulated that Loza could not vote on any matters regarding the budget or finances. Board Chair Rodrigo B. Leiva confirms that the board approved the hire. Aguilar adds that he had considered two or three other applicants before hiring Munoz.

Aguilar says Munoz has worked for Fiesta DC for roughly 19 months. This year she received a salary of $40,000. “She’s great,” Aguilar says. “She’s a very honest person. She works very hard….Everybody loves her: the staff, the board, the clients.”

In seeking to have Munoz hired, Loza could well have been engaging in a classic political quid-pro-quo: He had become, at that point, a conduit for much of Fiesta DC’s funding.

Prior to 2007, Aguilar says, his organization had mainly funded itself through competitive grants. But in the last two years, the group has received a total of $300,000 in D.C. Council earmarks—-the same funding source embraced by Ward 8 Councilmember Marion Barry to fund dubious nonprofits he controlled.

Aguilar says he never lobbied anyone for the noncompetitive money, at least some of which was funneled through Graham’s public works committee. “It’s a mystery,” he explains, when asked how Fiesta DC received the funds, which now account for almost half the group’s revenue.

Actually, it wasn’t much of a mystery: “Ted was saying, ‘You know, I think I can get more money,'” Aguilar says. “He was using his position, his knowledge of the city government. He knows how D.C. works. He has access.”

And once those earmarks came through, Aguilar says Loza didn’t let anyone forget it. Loza, he says, had a habit of making demands and demanding credit for the group’s work. “I think he needed to feel that he has power,” Aguilar explains.

A little more than a month ago, two federal agents showed up at Fiesta DC’s office. Aguilar would not say what the agents discussed but that the meeting lasted roughly 15 minutes.

After the meeting, the board asked for Loza’s resignation.

Today, federal agents arrested Loza at his Columbia Heights home after being indicted for accepting a bribe in connection with taxicab legislation. A search warrant presented at his office indicates that authorities are seeking documents connected to Fiesta DC.

Graham, in an interview today, said he “categorically” denies any quid-pro-quo or wielding any influence in Munoz’s employment there.

“It’s actually sad, especially for the city and the Latino community,” Aguilar says. “In many ways, if we talk about a Latino leader, he’s the guy. He was the most powerful guy, there’s no question about it.”

Aguilar says that Loza was thinking about running for a D.C. Council seat in the future.

Additional reporting by Mike DeBonis