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8 officials plead not guilty to looting funds from Calif. city

At least $1.2m taken for personal use, audit alleges

By John Rogers
Associated Press / October 22, 2010

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LOS ANGELES — Eight current and former officials pleaded not guilty yesterday to looting millions of dollars from the blue-collar California city of Bell.

Los Angeles Superior Court Judge Hilleri G. Merritt ordered them to return to court Dec. 8 for a preliminary hearing. None of the eight — including the mayor, vice mayor, and ousted city manager — spoke in court except to say “yes’’ when Merritt asked whether they were agreeable to the hearing date. Their lawyers entered the not guilty pleas.

An additional hearing was scheduled for today for one of the defendants, Councilman George Mirabal, so his lawyer could discuss pretrial motions. A scheduling conflict kept Mirabal’s chief lawyer from appearing in court with him yesterday.

Only two of the defendants, Mirabal and former councilman Victor Bello, are still in custody.

An audit released this week found that officials took at least $1.2 million intended for affordable housing and street repairs and used it to pay themselves huge salaries and other generous perks.

“Public money dedicated to increasing affordable housing and maintaining local roads [was] instead used as a self-indulgent slush fund to pay for excessive salaries, perks, and other unlawful expenses,’’ said state Controller John Chiang, who on Wednesday released audits of Bell’s Redevelopment Agency funds and its state gas tax funds.

Among those Chiang said received tens of thousands of dollars in salary and perks was ousted city manager Robert Rizzo, who is charged with 53 counts of looting the city, where 1 in 6 people live in poverty.

Chiang’s office launched an audit of Bell’s books three months ago, after the Los Angeles Times disclosed that several officials were getting exorbitant salaries. Last month, Chiang reported that Bell officials mismanaged more than $50 million in bond money and levied millions of dollars in illegal taxes. He has demanded Bell reimburse property owners $2.9 million.

On Wednesday, he said Bell must reimburse its gas tax fund $521,086 or the state may withhold future payments.

Pedro Carrillo, interim city manager, requested the state audit in July. Bell officials did not immediately return calls seeking comment after Chiang’s latest findings were released. Chiang released the report one day after the Los Angeles County Board of Supervisors directed its auditor-controller to review Bell’s finances to determine whether the city can provide services.

According to the latest state audit, $66,100 from Bell’s low- and moderate-income housing fund was used to pay Rizzo, who had a combined annual salary and benefits package of about $1.5 million.

Another $24,856 from the fund went to Lourdes Garcia, Bell’s director of administrative services, according to the audit. Garcia, who has not been charged with a crime, had an annual salary of $422,707, according to documents posted on Bell’s website. City officials say she has since taken a 61 percent pay cut.

Rizzo received an additional $171,444 from another city redevelopment account, according to the audit. Garcia received $38,117 from that account and Angela Spaccia, ousted assistant city manager, got $27,066, according to auditors.

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