SHORELINE, Wash. -- A local politician, prostitutes, and a new twist on Strippergate.

KIRO Team 7 Investigators unravel the secret criminal case file against Shoreline City Councilman John Chang.

Investigative Reporter Chris Halsne asks hard questions regarding Chang's arrest and alleged behavior.

Councilman John Chang is running for re-election in November. You can tell by the campaign signs posted in front of the hotel he owns on Highway 99.

This is also the place, Seattle vice detectives tell KIRO Team 7 Investigators, where Chang was allegedly involved in prostitution and dealing in stolen goods.

This politician wants his constituents to know, despite being the subject of a police investigation, he has not been charged with a crime.

Chang characterizes the investigation as “most definitely, it was a misunderstanding.”

Detectives don't think so. They heavily recommended earlier this year the King County Prosecutor charge Shoreline Councilman John Chang with permitting prostitution, patronizing a prostitute, and attempted possession of stolen property.

Seattle police spokesperson Sean Whitcomb says, “We believe, through probable cause, that this person did this. We wouldn't have put in all this effort had we not believed that.”

Under the Washington Open Records Act, KIRO Team 7 Investigators acquired a 162-page investigative report. Some details of Chang’s alleged behavior are blacked out. Others are too graphic to share. In simple terms, a convicted prostitute told police Chang "forgave" $418 in room rent in return for her services over a two-month span.

That’s something Chang denies in a conversation with Investigative Reporter Chris Halsne.

Chris: She picked you out of a line up. Gave a sworn affidavit to police that that occurred.
Chang: I didn't even know that.
Chris: It's in here (the police report).
Chang: She came back here and called me and apologized.
Chris: For what?
Chang: For causing all this trouble for me.

POLICE FILES Portion Of Police Documents In Chang Case [pdf document]

The police files also show that an undercover vice detective swears he exchanged stolen DVD recorders with Chang in return for wiping a rent debt off the books.

Chang responded to that by saying “This was politically motivated and I am innocent and we need to move on.”

When KIRO Team 7 Investigators pressed for specifics, Chang says Seattle police really wanted to question him regarding Frank Colacurcio, the strip club king facing charges of making illegal campaign contributions to Seattle city council members.

Chang told Halsne, “I don’t know Colacurcio. Never met him. I never said ‘hi’ to him or shook his hand or talked to him. I don't have any association or affiliation with him. None whatsoever.”

King County prosecutors can't talk about the ongoing Stippergate case, but did agree to tell us why they declined to formally charge Chang on prostitution-related and attempted possession of stolen property charges.

Spokesperson Dan Satterberg says, “I think we learned a lot about the motel that was being run there, but in the end, there was not a specific incident that we felt sufficiently confident in that we could prove to a jury that was a criminal act. Certainly there was a lot of smoke, but was there any fire?"

We've discovered the real trouble with this case was the vice-squad's "confidential informant" and witness. He is Richard Emery, according to police records, a "small time pimp" and thief who allegedly ran hookers out of Councilman Chang's Quest Inn.

Chang admits he knows Emery as a customer at his hotel, but also says, “You’re going to trust somebody with a long history over me? Is that the way the system works? I'm very disappointed if that's the way it works.”

Chang says he's in this mess because he let Emery stay at his hotel for several months out of "compassion" for Emery's young son.

KIRO Team 7 Investigative Reporter Chris Halsne asked Chang, “He also had these girls with him. You didn't suspect they were prostitutes?

Chang responded, “Um. I'm going to be honest with you. I did suspect them, but because of this little kid, I couldn't kick them out.”

Some police detective believe Chang escaped charges because he's an elected politician. Chang believes he was targeted for the same reason.

King County prosecutor spokesperson Dan Satterberg says Chang's job means nothing to that office. “It's of no importance to us who wants to run for public officer, unless there's allegation that this person is corrupt or corruptible in which case it becomes a priority to try to vet that allegation. “

Chang told KIRO Team 7 Investigators he doesn't think he'll ever be charged with a crime regarding this case, but he's going to have to deal with it on the campaign trail. He does have an opponent for his position on the Shoreline City Council in the November election.