Corrupt Calif city dodges shutdown with reforms

AP News
Posted: Nov 10, 2011 6:00 PM
Corrupt Calif city dodges shutdown with reforms

It was a landslide vote _ if there can be such a thing in a city where only 52 ballots were cast.

The results sent a message that the 100 residents of the scandal-plagued city of Vernon overwhelmingly support reform measures aimed at ending years of corruption that saw the convictions of three top officials, including a councilman who was living in a mansion in nearby Los Angeles and a former city manager who routinely billed the city for golf outings, massages and a personal trainer.

The vote came after state legislators _ embarrassed by the six- and seven-figure salaries paid to officials to run the tiny town where almost everybody lives dirt cheap in city owned housing _ had threatened to take the unprecedented step of shutting down city government if things didn't change.

Now they plan to take a wait-and-see attitude as the city tries to take its first baby steps to dig itself out of the mess.

"I think the important thing to note is that given the decades-long pattern of corruption that has existed in that city, we have to be careful when everyone says they have fully reformed," said John Vigna, press deputy for Assembly Speaker John Perez, who introduced the measure to take away Vernon's cityhood. "Several steps still have to be taken to rebuild a sense of trust."

The 82-year-old mayor of the city tucked into the Southern California sprawl was more optimistic.

"We're very happy with the way the vote went, it went the way we wanted, and I'm sure it's going to help the city with things in the future," Mayor Hilario Gonzalez, who had steadfastly refused to speak to the media for months, said this week during a brief interview on the front porch of his home.

Seventy percent of the city's 74 registered voters cast ballots Tuesday on the reform measures for the 5.2 square-mile warren of warehouses, factories and railroad spurs where 55,000 people go to work each day doing everything from butchering hogs to making designer jeans.

In the end, 43 people voted to limit City Council members to two, five-year terms after some had served as long as five decades. Other measures, including making it easier to fire the city manager, were passed unanimously.

Around town, everyone from loading-dock workers to residents and elected officials hailed the vote as signaling a new day for a city that came within a handful of votes last summer of being shut down.

Things actually began to change two years ago as top officials were arrested for investigation of misappropriating public funds, voter fraud and conflict of interest.

At the same time, word surfaced in the media that a handful of people had essentially run Vernon for decades, serving on the City Council for decades, rarely facing re-election challenges and paying the city's top administrators huge salaries. One former city manager received $1.6 million in 2008.

Council members, meanwhile, lived in city-owned houses and apartments that rented for between $120 and $360 a month, while median rents in adjacent cities were hundreds of dollars higher.

Members of the Legislature told Vernon to clean up its act or be wiped off the map by a disincorporation measure that appeared headed for approval until a key supporter, state Sen. Kevin De Leon, proposed giving Vernon a last chance to change.

De Leon said at the time he feared that shutting down City Hall and handing over operations to Los Angeles County might prompt some of Vernon's 1,800 businesses to leave, taking their share of the city's $334 million annual tax base with them.

Some companies did indeed threaten to hit the road, acknowledging that even though Vernon has had its corruption problems, it has kept taxes low, provided excellent police and fire protection and kept electricity rates low with its own power plant.

"A lot of cities and states are courting business these days. If they don't have an advantage in being here they'll just leave," said Ari Manor, who manages La Villa Basque restaurant in the center of town.

The 51-year-old restaurant, with classic 1960s kitschy decor that gives it the look of a Frank Sinatra movie, is a popular gathering spot with the city's movers and shakers.

It's owned by Leonis Malburg, grandson of one of Vernon's founders and a member of the City Council for more than 50 years until he resigned in 2009, shortly before being convicted of voter fraud.

While serving on the council, prosecutors said, Malburg lived in a mansion in a wealthy section of Los Angeles, not the modest condo next door to his restaurant that he listed as his official address.

Earlier this year, former Vernon City Manager Bruce Malkenhorst pleaded guilty to misappropriating public funds. Prosecutors said that between 2000 and 2005, he billed the city thousands of dollars for golf outings, massages, a personal trainer and a home security system.

Donal O'Callaghan, another former city manager, was convicted last month of conflict of interest in a case that involved arranging a job for his wife with a Vernon business.

Still other corruption investigations are under way, said Dave Demerjian, head of the Los Angeles County district attorney's public integrity office. He declined to elaborate.

The City Council itself has initiated a number of reforms since the corruption scandal broke. It cut members' salaries from $56,000 to $25,000 a year; drastically reduced the salaries of top officials; and created a commission to look into building more housing.

It also proposed selling city-owned homes, which officials recently acknowledged were maintained at a huge loss over the years. The residences, scattered around town, are mainly rented to city officials, their friends and relatives.

Mayor Gonzales recently announced plans to retire after 37 years on the City Council. Another seat will also be up for election next year.

Among those considering running is Mike Ybarra, a retired engineer and lifelong resident.

Ybarra, whose family has lived in Vernon since the 1890s and who owns one of the last private homes, said he was delighted to see the reforms pass and anxious to implement more changes in a city he loves.

"The city is changing and I'd like to be part of the change," he said. "And hopefully this time they'll be more than two people running for the two seats."