Calif. AG ramps up probe of small city corruption

AP News
Posted: Oct 21, 2010 7:12 PM
Calif. AG ramps up probe of small city corruption

Corruption investigations in the modest, blue-collar neighborhoods ringing Los Angeles grew Thursday as state Attorney General Jerry Brown subpoenaed Vernon officials to testify about evidence showing several people paid themselves huge salaries to run a town of about 100 people.

At the same time, Brown went to court to demand that the scandal-ridden city of Bell be placed under a monitor until residents can elect a new City Council next year.

The twin announcements came on the same day eight current and former officials of Bell, including the mayor and vice mayor, were arraigned on charges of bilking taxpayers out of about $5.5 million. All of them pleaded not guilty.

One of the eight, former City Manager Robert Rizzo, had a salary and compensation package of $1.5 million when numerous perks like vacation, insurance and other benefits were added to his $787,637 salary. Four of the City Council's five members were paying themselves salaries of about $100,000 a year for leading the working-class town of about 40,000.

In issuing his subpoena for Vernon, Brown demanded that officials knowledgeable about municipal salaries appear in his office Nov. 10 to testify about evidence showing Vernon's former city administrator and deputy city attorney, Eric T. Fresch, was paid $1.65 million in 2008 and that a handful of other officials received salaries ranging from $570,000 to $800,000 a year.

Brown's office said the evidence he uncovered through a California Public Records Act request also showed former Vernon City Administrator Bruce Malkenhorst Sr., who retired in 2005, draws an annual pension of $500,000 annually.

The city's current administrator, Mark C. Whitworth, issued a brief statement that said in part, "Vernon has fully cooperated with the attorney general's investigation and we will continue to do so."

Last month, Brown sued eight current and former Bell officials for fraud, civil conspiracy, waste of public funds and breach of fiduciary duty. The lawsuit, separate from Thursday's criminal action, demands that they repay any excessive salaries or benefits they received.

Brown said Thursday that if the Vernon investigation turns up evidence of illegal payments he'll sue to get that money back as well.

"Wherever there's an excessive salary or an excessive pension, we want to not only stop it but we want all the money back," he said in a phone interview with The Associated Press.

He added that his office is looking into the issue of excessive municipal salaries in cities all over California.

"There are plenty of them, I can tell you that," Brown said. Although he didn't name any others, he said he believes the state may eventually have to adopt standards safeguarding small cities where excessive compensation can be easily hidden from the local populace.

Vernon, an industrial town on the edge of Los Angeles, is made up mainly of factories and warehouses with a few modest homes and apartments sandwiched between them.

Bell, just a couple miles away, consists of modest homes occupied by a largely Latino population that includes many Spanish-speaking immigrants. One in six Bell residents lives in poverty.

Three of the four Bell council members facing criminal charges are the target of a recall, and the fourth has resigned. The earliest a recall election could occur, however, is next year.

"We think we need somebody in there to keep a watch on things and report to the public," Brown said, adding he went to court after Bell officials appeared to be dragging their feet on his request for a monitor. A hearing is scheduled for Nov. 17.

Bell's interim city attorney, Jamie Casso, said officials want to cooperate with Brown but they believe only the City Council itself has the authority to enter into an agreement appointing a monitor. The council was unable to hold its last regularly scheduled meeting earlier this month because one member was in jail and unable to make bail, another had resigned and two others facing criminal charges didn't show up.

Meanwhile, one of Vernon's former city administrators, Donal O'Callaghan, pleaded not guilty Monday to felony conflict of interest charges that involved hiring his wife for different jobs, including one that paid $40 an hour to fill out time cards for employees of a private company that provided services for the city's power plant.

Brown's office said Vernon paid O'Callaghan a salary of $785,000 last year.

O'Callaghan's attorney has said there was nothing improper or hidden about the hiring of the former administrator's wife.