Authorities: Corruption ran deep, long in S. Calif city where more than $50 million mismanaged

Prosecutors say corruption ran deep in Calif. city

LOS ANGELES — Eight current and former officials of the city of Bell appeared in shackles before judges Wednesday in a corruption case prosecutors said was so ingrained in the blue-collar suburb that almost anyone who could have blown the whistle was benefiting from it.

Former city manager Robert Rizzo was accused of being at the center of the scandal that went unchecked for years while he allegedly lent city money to himself, his assistant, city council members, members of the police force and an array of city workers that included a recreation attendant who borrowed $1,500.

“The loans, which are the basis of these charges, were not publicly approved and the crimes were committed by persons who would otherwise have been responsible for reporting such conduct,” according to a felony complaint charging the suspects with misappropriation of public funds and other charges.

Rizzo also was singled out in a state controller’s audit that said city officials mismanaged more than $50 million in bond money, levied illegal taxes and paid exorbitant salaries to leaders.

Rizzo was being paid nearly $800,000 a year when he resigned earlier this year and had total control of city funds, the audit stated.

“Our audit found the city had almost no accounting controls, no checks or balances, and the general fund was run like a petty cash drawer,” state Controller John Chiang said in a statement. “The city’s purse-strings were tied to only one individual, resulting in a perfect breeding ground for fraudulent, wasteful spending.”

The findings were “shocking and detail actions that are reprehensible beyond words,” said Bell interim city manager Pedro Carrillo, who requested the state audit in July.

He called the audit an invaluable tool to correct the problems and to establish reforms to prevent more abuse in the city where one in six residents live in poverty.

All eight defendants made their first court appearances on Wednesday but gained little in their appeals to have high bail amounts slashed. Rizzo’s bail was reduced to $2 million, down from the $3.2 million prosecutors had requested, but far more than the $100,000 his attorney had sought.

“The notice of the charges in this case allege very serious criminal activity,” Superior Court Judge Michael E. Pastor said, adding it was not unreasonable to assume Rizzo and the others might flee if high bail amounts weren’t required.

Deputy District Attorney Jennifer Lentz Snyder, who argued for keeping the bail amounts high, said all eight officials face lengthy prison terms if convicted of all charges. Rizzo faces the longest sentence, 58 years, and former assistant city manager Angela Spaccia the shortest, 10 years.

The loans and other allegations came to light after the Los Angeles Times revealed in July that Rizzo and other city officials were making huge salaries. The resulting scandal triggered nationwide outrage, turning the suburb of 40,000 people into a poster child for government abuse.

Also charged in the corruption probe were Mayor Oscar Hernandez; Vice Mayor Teresa Jacobo; council members George Mirabal and Luis Artiga and former council members Victor Bello and George Cole.

All eight, wearing jail jumpsuits and shackled at the waist, appeared before Superior Court Judge Hilleri G. Merritt, who continued their arraignments until Oct. 21 at the request of their attorneys. The group appeared somber except for Spaccia, who occasionally smiled as she looked out at a packed courtroom where her adult son was sitting.

Artiga, Jacobo and Cole were given permission to post bail immediately after prosecutors agreed with defense attorneys that the assets they planned to use had not been looted from the city. Artiga and Jacobo were released from jail Wednesday night after posting bond of $120,000 and $260,000, respectively.

Four others then went to Pastor’s courtroom to argue for reduced bail. The judge reduced the amounts slightly for three of them. Mirabal did not challenge his bail amount.

Among other things, the state audit also found:

—The city levied more than $5.6 million in improper sewer, property and business license taxes.

—Exorbitant salaries were approved for city leaders without required performance reviews. In the past year alone, the city spent more than $5.8 million on compensation for the mayor, City Council members and six top administrators.

—Rizzo used more than $93,000 to repay two personal loans and approved $1.5 million in loans to other city workers even though no city ordinance permitted it.

—The city paid $10.4 million to two development firms owned by a contractor who also was the city’s director of planning services.

—The city made a $4.8 million land purchase from a former mayor without documenting how the land would be used. No work has been done on the property, which contains a vacant store.

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Associated Press Writer John Antczak in Los Angeles contributed to this report.