California City Officials Arrested in Salary Probe

Eight current and former officials in the Southern California city of Bell were arrested in an investigation of high salaries that the leaders of the Los Angeles suburb are accused of paying themselves.

“We are alleging they used the tax dollars from the hard- working citizens of Bell as their own piggy bank, which they looted at will,” Los Angeles County District Attorney Steve Cooley said today at a news conference.

Former City Manager Robert Rizzo, 56, is charged with a total of 53 counts of misappropriating public funds and conflict of interest. Rizzo, who was paid about $800,000 a year, is accused of writing his own employment contracts that were never approved by the city council. The eight suspects, including the city’s mayor, misappropriated $5.5 million, Cooley said.

It’s not a crime in California to get paid an “excessive” salary, Cooley said. The manner in which the defendants obtained the pay, including for purportedly attending meetings that never took place, is what makes it a crime, the prosecutor said.

“This is not an arrest necessary to accomplish a law enforcement goal of bringing charges,” Rizzo’s attorney, James Spertus, said in a phone interview before the news conference. “This is an arrest done for political reasons because I have offered to facilitate Mr. Rizzo’s first appearance if it ever became necessary.”

Spertus didn’t immediately return a call to his office after the charges were disclosed.

Mayor, Council Members

Bruleo Lopez, 52, a machine operator and 36-year Bell resident, said he was delighted with the news.

“I like it,” Lopez said, adding that he has had to pay $4,000 to get his and his son’s cars out of impoundment for parking tickets in the past year in what he said was a scheme Rizzo concocted to raise money for the city.

“They raised my taxes, they took our cars,” Lopez said. “I’m working 16 hours a day so Rizzo can have a horse farm? He didn’t even live here.”

Those arrested today included Pier’angela Spaccia, Bell’s former assistant city manager; Mayor Oscar Hernandez; Vice Mayor Teresa Jacobo; council members George Mirabal and Luis Artiga; and former members George Cole and Victor Bello.

Law enforcement officials used a battering ram at the home of Hernandez because he was slow to open the door, Cooley said at the news conferences.

Arraignment, Bail

All eight are scheduled to be arraigned tomorrow in downtown Los Angeles. The district attorney’s office couldn’t provide names of their attorneys. Cooley said he’ll ask that Rizzo’s bail be set at $3.2 million.

Bell, located about 10 miles (16 kilometers) southeast of Los Angeles, has a largely Latino population of 38,000. The city’s latest annual report listed per-capita income at $24,800 in 2008. Statewide, the figure was almost $42,700 that year, Bloomberg data show.

The city’s municipal elections are nonpartisan.

California Attorney General Jerry Brown sued Rizzo and seven other officials on Sept. 15, accusing them of wasting public funds, negligence, fraud, conflict of interest and breach fiduciary duty.

California is asking the court for a return of compensation paid to the officials “in excess of what was reasonable and appropriate, an amount to be proven at trial,” according to the complaint. The state also wants a declaration from the defendants that such pay won’t count toward future pension benefits.

Randy Adams, Bell’s former police chief, is a defendant in the lawsuit and wasn’t arrested today. Artiga wasn’t named as a defendant in the lawsuit when it was filed.

Base Salary

Rizzo was the city’s chief administrative officer from 1993 until July and earned a base salary of $787,500 in 2010, according to the suit.

Council members provided Rizzo with 107 days of vacation and 36 days of sick leave in 2008, Brown’s office said in the suit. They allowed him to convert vacation and sick leave into additional pay of $360,000 in 2009, bringing his total compensation for the year to more than $1.1 million, according to the filing.

“Mr. Rizzo’s compensation was approved by the city council and contracts were countersigned by the city attorney,” Spertus said when the lawsuit was filed. “Mr. Rizzo did nothing secretive, and did everything in the open and above board. It’s just very difficult for me to understand why people would accuse Mr. Rizzo of wrongdoing when he operated so transparently.”

The criminal case is People v. Rizzo, BA376026, Los Angeles County Superior Court.

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net; Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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